In negotiating a contract for SEO work you need to consider service rates, start and finish dates, ethics, copyrights, hosting,  purchase of account, anonymity, noncompetes, duration of time, and guarantees. Make sure you carefully review the contract for the above details.  You have to trust your SEO provider, but you want to cover your bases in the event of unforseen changes to your relationship.

When your company has selected an SEO firm to do search marketing and site optimization work, you will need to negotiate a contract for said services.   Here are some negotiation guidelines:

Service Rates 

SEO costs are directly related to the effort put in, so make sure to ask for an estimate of total number of hours to be worked,m do your own math, and confirm that the per hour rate is reasonable.  

Start and Finish Dates

Make sure you confirm the projected start date for your SEO work as well as the estimated finish date, since SEO firms can get pretty busy.  Keep in mind that project end dates may change, often as a result of client-side delays.

Code of Ethics

There are those who practice ethical SEO and those who practice unethical SEO, the latter group employing various measures disapproved by the search engines and severely damaging to a company's reputation (i.e. cloaking, invisible text, deliberate duplication).  Confirm that your SEO firm adheres to a code of ethics; more reputable SEO experts may even post a code of ethics document on their websites (i.e. see bruceclay.com/web_ethics.com or check out our own website - yesupseo.com).

Copyright and Hosting Issues

Any content and pages developed for your site by the SEO firm should be owned by your company; check the copywright terms in your contract fine print to confirm this.  Some firms operate on a pay-for-performance basis, which means that there may be extra fees involved if they host your pages on their servers.

Purchase of account

The SEO industry is currently fraught with acquisitions and mergers, so find out what happends to ownership of your account if your provider firm is sold.   You can add a clause in your contract which allows for a changed ownership review period, so that you can switch firms without penalty if you are not satisfied with the new ownership after a set period of time (i.e. three months).

Anonymity

Like ad agencies and law firms, SEO providers can promise anonymity to their clilents, especially when the client is a major and respected industry player who expects to realize a market advantage with optimization.  Be prepared to pay extra, since it is usually not provided for free.

Noncompetes

Unlike ad agencies and PR companies, SEO firms often work for one or more direct competitors at the same time.  It is not a big issue currently, because in the world of search the results achieved often depend on factors such as client size and resources.  A competitior with a well-optimized 500-page site will achieve greater engine rankings than your company, for example, if your site is considerably smaller.  Once again,

be prepared to pay extra for each competitor you name in a noncompete clause.

Duration of time

SEO firms incur various expenses related to a new account, often associated with learning about the company, so they tend to amortize their Return On Investment (ROI) by getting the new client to commit for a set period (i.e. three months to one year).  Make sure you are comfortable with this time period, and that any out-clause penalties are not too heavy.

Guarantees

How many times have you heard that there are absolutely no guarantees in SEO?   Be very leery of companies which guarantee or promise high search engine rankings for your site.  Be even more leery if they guarantee those results across hundreds of engines, since apart from a few particular niche engines there are really only a handful that count.  Remember to examine the exact wording of any engine rankings promises made in the contract.

Be leery of SEO firms promising top rankings for a specific number of keywords, and better ascertain who is choosing them. Do not be impressed if your company name, URL name, and/or trademarked product name are among those keywords. Watch out for guarantees that are for paid search only and not for organic search.  Always remember that providers should never guarantee concrete SEO results still an inexact science and is influenced by several factors, some of which are beyond their control. Honest SEO companies will any promises other than to be committed to working hard and intelligently to provide you quality search marketing and site optimization services.