Business Agreements: Legal Requirements for Coaches

Written By Valerie Del Grosso

Life Coach Agreement:  Legal Requirements for Life Coaches

Setting up your coaching business means figuring out your legal requirements.

How to become a coach (legally)

Most states in the United States do not have a license for coaches and few regulations. But no regulations does not translate into no rules. In fact, there are many best practices that can help a coach build a business they can rely upon, and that clients love to trust.

Agreements and Contracts for Coaching Business

If you plan to hold your clients accountable to their dreams, charge for your services, hold one-on-one coaching calls, and respond to a chargeback (if you ever face one), there are a handful of documents you must have in place as a coach:

Life Coach Agreement Form

A life coach will use a different contract than a business coach. Life coaches often have individuals, rather than businesses, as their customers. Individuals in the United States and other countries have more legal rights than businesses. Therefore, it is very important that the individual understands what she is purchasing from the coach.

A life coach agreement will explain the price, the billing frequency (pay in full or installments), the number of sessions purchased, the refund policy, the way to schedule or reschedule calls, the law of the location governing the agreement, among other information. The contract will explain that the coach is not making promises regarding outcomes, which are usually subject to many variables, most of which are outside the control of the coach.

A client agreement can protect you in the event of a chargeback or lawsuit and can help prevent “scope creep,” in which the client seeks more services than what was originally agreed. It can also ensure that the coach can collect from the client, in the case that a client stops paying or decides to quit halfway through the program.

Did you know that the International Coaching Federation includes having a coaching client agreement in place as one of the core competencies of a coach? It makes sense; your client agreement creates transparency and defined expectations for everyone in the coaching relationship.

Business Coaching Contract Template

Business coaching agreements have fewer legal protections for the client, who is presumed to be a business that is at least as sophisticated as the coach. Still, the contract will explain the price, billing frequency, a number of sessions purchased, the refund policy, call scheduling policies, governing law, and other details about the services.

Sample Coaching Contract

If you are looking for a sample coaching contract, you can download the group coaching program here to get an idea of what a coaching contract looks like.

One on one coaching agreement

The main difference between one-on-one coaching and group coaching programs, like masterminds, courses, and live events, is the level of interaction between the coach and the student.

In one-on-one, the level of confidentiality is higher, as well as the amount of interaction between the coach and student. In fact, scheduling (and rescheduling) is a big issue. Your coaching agreement and business policies should state how calls are scheduled, whether they are recorded, how soon in advance they can be rescheduled, by when all of the calls must be completed, and whether the calls are forfeited if not used by a specific point in time.

In group coaching, on the other hand, the level of confidentiality is lower because the coach cannot control where the information presented to the group goes. Further, group settings typically provide only one opportunity to show up live to a call, with a replay, but the student is not able to reschedule calls.

Charging for Coaching Services

With the exception of brand new coaches offering free sessions for practice, for certification hours, or to beta test a new program, most coaches do charge for their services.

At first, coaches may charge for one-off sessions by the hour, or in small packages of 6 sessions, for example. Thereafter, as coaches gain experience and credibility, they may raise their rates based on the value provided, rather than trading time for money (i.e., time spent).However the coach is charging for services, there are a few legal protections to take. First, the client should be provided the refund policy before the card is charged. If the card is charged over the phone, a payment script that is followed every time, and preferably recorded, is key. You can download my free coaching payment script inside The Coach’s Legal Library, my free legal membership site for coaches.

If the client will pay on a recurring basis, a credit card authorization form is required. This way, you can avoid writing down payment information, which violates card-issuer practices and could result in loss of your merchant account. Safeguarding client payment information is critical.

Credit Card Authorization for Coaches

Many coaches sell high ticket coaching packages over the phone. When the cardholder is not present, a credit card authorization form is a must. You can take payment over the phone with verbal authorization, and then send the credit card authorization form to authorize that charge, later recurring charges, if any, and again to update payment information if the client’s card expires or needs to be changed for a different reason.

~Valerie Del Grosso

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