on landing two potential customers.
The first thing to say is yes, you do need to enter into a contract with these people, but it need not be as complicated as you might think.
A commercial contract is simply an agreement between two parties, usually for one party to sell something, and the other to buy something. Once entered into, the agreement has the force of law behind it, so it's as well to make sure that you can meet your commitments before you go ahead. When you're providing a service - as you are when you design a site - It's often quite difficult to understand exactly what your customer's expectations are, and for this reason you need to dot some I's and cross some T's.
A good way to start is to have a meeting with your prospective client, and discuss his/her requirements. During the meeting you can make suggestions, and take notes, and that should give you both a lot more information - the client gets an idea of what to expect, and you get an idea of what's expected.
Then go away and draw up a 'family tree' representation of the site architecture. Put the home page at the top, and add the child pages (as they're called) underneath, with lines connecting the pages that will be linked - it's easier to do than to describe. Send this plan of the site to the client with your quotation. That way you make sure you're both singing from the same hymn sheet when it comes to how many pages/sections are included.
Now you need to prepare a list of the terms and conditions that will apply to the contract, and this is where a lot of people run into difficulties. Broadly speaking it's absolutely essential that the client understands two things - when you will require payment(s) and how many opportunities for change there'll be. It's that second point that causes the trouble.
Some clients think that once their new site is online they can make repeated requests for changes at no cost, and you can become trapped in a time consuming exercise if you're not careful. For this reason you need to specify the number of times the client can have a tweaking session. What I do is show the client the site right from the start, so he/she/they can see it at all stages of its development, and make comments. It's much easier to incorporate changes in this way, and I usually say that there will be three opportunities to request changes PRIOR to publishing the site on its own server space. I make it clear that once the site is live online there can be no further free modifications - any more at that stage and they must be paid for.
Make it clear from the outset if you want to have on account payments. Most clients are quite happy to do this, provided they can see that there's been some progress. Included in the clause about payments you must make it clear when the final payment is due - I usually ask for this within 14 days of publishing the site.
Add a clause about copyright. Say that copyright in the site design and any content created by you in the form of text and/or images is vested in you until the final payment is received. In this way you protect yourself from the possibility that your client waits for the new site to go live, and then doesn't pay. If the copyright stays with you the client has no control over your design and content, and as a last resort you can take the site offline, or remove all your copyrighted content.
Make it clear that if the client is to provide you with text and image content for the site you must have it by a specified time - many site designers sit tearing their hair out while waiting for the client to produce the goods, and in the meantime nobody's earning money.
There are other conditions that you might want to include, but those are the main requirements, and it's important that you refer to them when you submit your quotation for the work. In your quotation letter/email include the sentence "your acceptance of this quotation implies acceptance of the attached terms and conditions of contract"
Then, when the client formally accepts your quotation a contract will exist between you. The acceptance doesn't have to be in writing, and the client doesn't have to sign anything - a verbal acceptance is equally binding. If you so get a verbal acceptance it's a good idea to confirm it in writing. An email is fine, and should be along the lines "Further to today's (yesterday's) telephone conversation, thank you for your verbal acceptance of our/my quotation".