Creating a freelance contract can seem daunting at first, but it’s an important part of developing a successful freelance business. Whether you’re putting together your first freelance contract or you’re looking to improve an existing one, this article will guide you through the process. You’ll learn:
- Why freelancers need contracts
- What your freelance contract should include
- What to do if a client breaks your contract
Why Should Freelancers Have a Contract?
A contract is one of the best tools a freelancer has for ensuring projects go smoothly. A contract lays out expectations for both parties and eliminates confusion that can lead to dissatisfied clients, unpaid invoices, or even legal trouble. You can avoid these issues and protect yourself and your client with a well-written contract.
How Does a Freelance Contract Protect You?
- Ensures you’re paid in full and on time.A contract ensures your client understands your rate and is legally bound to pay it according to the stated terms.
- Prevents scope creep. “Scope creep” refers to client requests that fall outside the negotiated project parameters. A contract protects you from this by defining the scope of work before the project begins.
- Manages client expectations. Mismatched expectations are one of the top reasons freelance projects go off the rails. A contract lays out all expectations, from payment terms to the relationship between the two parties, so there is less risk of misunderstandings and disappointment.
- Enforces project negotiations. A signed contract protects your interests because it’s a legally enforceable document. Without this, nothing you discussed with your client in terms of project scope, deliverables, deadlines, or payment is enforceable.
How Does a Freelance Contract Protect Your Client?
- Protects confidential information. Your client will feel more confident working with you when you have a contract in place to protect their valuable intellectual property and other confidential company information.
- Transfers ownership rights to them. A contract ensures that, once payment is made, your client has full rights to the work you created.
- Locks in your rate. A freelance contract protects your client from changes in your rate during the course of the project.
- Ensures their deadline is met. Clients have their own deadlines they have to meet, so it’s important that the freelancer completes work in a timely manner. A contract eases a client’s worry over late work by holding the contractor to a specific due date.
What Should a Freelance Contract Include?
Every freelancer’s business looks different, so there’s no all-purpose contract that will fit every need. However, there are common concerns across all freelance industries such as timely payments, project deadlines, and scope of work. Below, we’ll cover some of these common areas that you should consider including in your freelance contract.
Scope of Work
This is a section of your contract that you will modify with every new project you take on. A scope-of-work clause lays out the details and boundaries of the work you’ll be doing for the client. It can include the maximum word count for an article, the number of revisions included in the rate, assets your client must provide, and more.
Be clear about what you will be handing over to the client when you’ve completed your work. Think about your deliverables in terms of a service and a format. Here are a few examples to illustrate what we mean:
- A quarterly progress report on company investments in PDF format
- A Word document with a 12-month plan for marketing initiatives
- A WordPress website with three pages (About Us, Resources, Shop)
Identifying the work you will deliver as well as the format you’ll deliver it in makes it clear when you’ve fulfilled your project duties.
Rates and Billing Schedule
This section of your contract should state your rate for the project, the turnaround time for invoices, and acceptable payment methods. Will you accept checks? Do you need invoices to be paid upon receipt? Think about what will work best for your business.
Relationship of Parties
Clients sometimes misunderstand a freelancer’s role in the company and will try to treat you as an employee. Not only is this the opposite of what you want for your freelance career, it’s also illegal. The IRS clearly defines how contractors differ from employees, and it takes the distinction seriously.
In this section, include language that identifies you as a contractor and not an employee. This means:
- You’re not entitled to common employee benefits such as sick leave, vacation time, or health insurance.
- You decide your own schedule and location. A client can’t require you to work from their office or to work specific days or hours.
- You are free to accept work from other clients.
- You choose the projects you take on.
Confidentiality is a big concern for many clients. In the course of your work for a client, you may be privy to confidential information. If you’re working on an innovative new app for a tech startup, you can do serious damage to their competitive advantage if you share this information with another client. Including a confidentiality clause in your contract will give your client peace of mind and confidence in your professionalism.
Feedback and Revisions
Client feedback and revision requests are a normal part of any project, and they help you fine tune your work to ensure you have happy clients. It’s important that you lay out guidelines for how you need to receive feedback and edits.
Everyone has a preferred method of feedback, whether that’s talking over edits on a call or reviewing comments in a Google doc. You can tailor this section to your preferences, but be sure to include a statement about consolidated feedback and edits. There are often multiple stakeholders within a company that will review your work. If you don’t state that edits must be consolidated, you may end up with contradictory edits that prevent you from making the necessary changes.
It’s also important to include information about revisions in this section. How many revisions does your rate include? What is the price for additional rounds of revisions? Be sure to define what you mean by “revision,” otherwise you may find yourself in an abyss of endless edits.
Ownership Rights and Portfolio Use
Freelancers own the rights to the work they produce until the client pays in full for that work. Once payment is received, the rights automatically transfer to your client. Your contract should clearly state that your client will own the rights to your work only after you’ve received full payment.
While you’ll be transferring over ownership of your work, you may want to include a clause about displaying work in your portfolio. For many freelancers, a portfolio is essential to gaining the trust of potential clients, so you want to be able to showcase your experience.
Your freelance contract should include an exit strategy. Sometimes budgets change, the company decides to pursue a different direction, or you realize you’re not a good fit for a client. When that happens, it’s essential to have clearly defined parameters for termination.
Do you need seven days’ written notice? Will payment be due immediately upon the project’s termination? Can either party terminate the contract with or without cause? The answers to these questions will depend on how you want to run your freelance business.
What To Do if a Client Breaches Your Freelance Contract
No matter how perfect your contract is, there’s no way to guarantee that a client won’t breach it. It’s easy to get overwhelmed in this situation, but you have the facts and the law on your side. Remember that your contract is a legally binding document that your client agreed to, and you have every right to enforce it.
Here’s what to do if you find yourself dealing with a breach of contract:
- Stop taking phone calls and require written communications (email is fine). You want to have everything in writing so the client can’t claim ignorance of the issue. Written communications will also help you maintain a level head and avoid reactive behaviors such as yelling at your client.
- A breach of contract is a breach of trust, so emotions may be running high. No matter how aggrieved you feel, keep your communications professional and dispassionately present the facts of the matter. Rather than, “You never pay on time and have no respect for my time or skills” it would be better to say, “Feedback was not provided in the format outlined in the contract, and invoice #98 was paid 21 days late.”
- If the breach is an outstanding invoice, send a demand letter. It should state the facts surrounding the unpaid invoice (amount, original due date, what the invoice is for) as well as the date this must be resolved to avoid legal action.
- If all else fails, hire a lawyer to help you enforce your contract. Often, a letter from a lawyer is enough to impel clients to remedy the contract breach.
A contract is an important part of any freelance business. The tips covered in this article will help you put together a comprehensive freelance contract that will protect both you and your client. Once you have your contract laid out, consider seeking out a lawyer to review it and ensure there are no unintended loopholes or ambiguities that may cause issues.