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Sell Like a Ribel

Life Coach Agreement: Legal Requirements for Life Coaches

Most coaches begin with a one-on-one coaching business model. This allows a new coach to get her feet wet, speaking and helping individuals directly. Also, a newer coach can replace her 9-to-5 income with fewer clients, because one-on-one coaching clients typically pay higher prices than those who join group coaching programs.

For example, many new coaches I know offer 90 days of coaching, with 12, 90-minute coaching sessions, for $1,500. They can get three to four clients to replace their 9-to-5 income, and can use the rest of their time to build a larger audience to gain new clients.

With solid experience coaching one-on-one, the coach will learn the hopes, pains, fears, frustrations, and what it takes to overcome these challenges, so that she can incorporate this information into group programs, books, or more intensive, higher end one-on-one coaching.

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 half way 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, 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. If you need a life coaching client agreement template or a business coaching contract, click here.

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.

Disclaimer for Coaches

Coaches help hold clients accountable to their goals and dreams. In doing so, painful or difficult situations may arise for the client. The coach will guide the client through those issues as part of their job. Sometimes clients may not be as enthusiastic about these difficulties as they are about the idea of success!

Therefore, coaches should have a disclaimer on their websites and with their client agreements. A disclaimer is a statement that clarifies the rights and obligations of the parties in the coaching relationship.

A disclaimer is not a way to undermine or contradict the promised outcome. Therefore it is important not to over-promise on sales pages, in sales conversations, or in your contract. Coaching is about accountability to goals, not the goal itself.

Disclaimers are important for three types of coaching situations:

For coaching that seeks to improve earnings, the coach’s disclaimer should address that he or she is not a financial expert, giving securities or investment advice, or a tax professional, and that undertaking business strategies with the guidance of the coach is not a substitute for this professional expertise.

For health and wellness coaching, the coach’s disclaimer should explain that he or she is not a physician, registered dietician, or other medical professional, and coaching should not be used as a substitute for medical attention, or to diagnose or cure any medical condition.

For coaching around mental health and mindset, the coach should have a disclaimer that explains he or she is not a mental health professional and that coaching is not a substitute for therapy, medication, or other medical interventions.

For coaches who do hold professional licenses in any of these areas, a deeper conversation concerning the coach’s duties is necessary with a local lawyer because licensees have higher responsibilities.

Privacy policy template for coaches

The privacy policy is a legal requirement in most countries. It explains to a website visitor how the website is collecting information, what services are being used to capture that data, how the information is being used, and the process for removing oneself from the database.

When setting up shopping carts and working with a developer to build a website, a coach may be asked to upload his or her privacy policy. Also, your CRM software (email autoresponder) may request a copy.

It is not a good idea to copy a privacy policy from somewhere else, just to “check the box.” Instead, your privacy policy should reflect the way you actually do business, with the exact services you use, the way you actually use the data, and how to reach you to remove information from your database. Copying someone else’s privacy policy will not accomplish the purpose for the privacy policy.

If you want a privacy policy template specifically for coaches, sign up for The Coach’s Legal Library. The welcome email sequence includes a template, in the email titled, “Legal Document for Legally Doubling Your Prices.”

Website Documents for Coaches

In addition to the privacy policy and disclaimer, coaches also need a Terms and Conditions document on their website. This is different from a Terms of Purchase, which details refund policies and other items related to the sale of a downloadable or self-paced product.

Terms and Conditions specify how a visitor may use your website, and critically, how they may and may not use your content, images, and program and product names.

The Terms and Conditions on a website are a contract with website visitors, who may not yet be your customers. Terms and Conditions are not fool proof, but they do provide more protection than having none at all.

Normally, protecting your content and names is the job of copyright and trademark law, but those are expensive and time-consuming to enforce. Instead, contract law is easier and cheaper to enforce, so having terms and conditions which address that a visitor is not allowed to use your name, images, and content, is a simple to implement legal protection for your valuable intellectual property.

Refund policy for coaches

Coaches can work with clients all over the world, which means that they are typically paid using the client’s credit card on a secure payment gateway. This also means that most disputes between a coach and a client will be resolved by a credit card processor, through a “chargeback” process.

The credit card processors are not attorneys, judges, or court systems. Instead, they are financial professionals who are looking for the best answer to the dispute. The goal, then, is to have a crystal clear refund policy so that it is easy for the credit card processor to find in your favor.

Failing to have a written refund policy, or having a vague policy like “Refunds on a case by case basis,” will not help you. Further, providing dozens of messages, emails, and other communications between you and your client so that the credit card processor can see what you agreed to is not helpful.

A clean, easily accessible client agreement and written refund policy go a long way in protecting your earnings.

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.