Most freelancers may recall at least one instance in which they were not paid for their labor and wished they had a formal freelancer contract. Perhaps a client ran out of finances even though the job was completed, or more hours were added to a project, resulting in unpaid work.
Therefore, it’s usually a good idea to have a written contract with your clients as a freelancer. A well-written contract offers freelancers and customers the protection and security they require. A freelancer contract can aid in the development of client trust, the establishment of clear expectations, and the improvement of project outcomes and client satisfaction. You should consider developing a contract for your freelancing employment if you don’t already have one.
What is the Definition of a Freelancer Contract?
A freelancing contract is an agreement between you and your customer(s) that details all you and your client need to understand about the project. It is, in particular, a legal document that can be utilized in court if necessary.
Contracts can be of two types, verbal and written. Verbal contracts are mostly formed on the basis of trust and in good faith. We always recommend going for a written agreement, as they are legally enforceable. It serves as evidence in case any unforeseen unfortunate incidents arise in the future.
Why Do Freelancers Requires A Contract?
It is a mistake to begin a freelance employment relationship without a contract. A freelancer contract is in both your and your client’s best interests, and there are numerous advantages to having one.
A contract is an agreement between two or more parties that is legally binding. Contracts enable you to specify exactly what you’re doing, how much it’s valuable, and who is responsible for what. It helps you to clear the terms and conditions of the project.
Here are a few of the many benefits of having a freelancing contract:
- Reduces the likelihood of arguments or misunderstandings, and specifies how to deal with them if they do occur.
- Payment, time, and deliverables are all acknowledged and agreed upon in advance by all parties.
- The contract’s terms are legally binding on the parties.
- A contract can safeguard both the contractor and the other party.
Common Problems That Freelancers Encounter When They Don’t Have A Contract
If you’re a freelancer or self-employed person, you probably already know how important it is to have a contract. Many people, however, claim that they do not require one because they have never had an issue.
Ironically, most freelancers don’t consider establishing a contract until they have a problem.
Regardless of your previous experiences, freelancers can encounter a variety of challenges if they don’t have a contract, including:
- Boundless projects and scope creep
- There is no means to enforce what was agreed upon
- Liability and additional legal ramifications
- Protracted and pointless legal battles
We strongly advise every freelancer to sign a contract. The freelancer contract is the first of the templates we’ve included in our list of the most crucial templates for freelancers.
Advantages of Freelancer Contracts
- Manage expectations – once signed, this written agreement spells out exactly what the freelancer and the customer can expect in terms of pricing and quality.
- Serve as a point of reference if there are any conflicts – arguments will inevitably emerge, but a contract gives a reference point for both the freelancer and the customer.
- Hold both the freelancer and the client to a set of standards – the contract should state how the client should respond to updates and reviews.
- Be mutually advantageous — everyone benefits from a freelancer contract, which improves the working relationship.
- Build trust with the client and ensure that freelance services are adequately reimbursed.
- Make a professional impression while saving time.
10 Things to Think About When Writing a Freelancer Contract
1. Work and service descriptions
Establishing a project scope inside the freelancer contract is critical for establishing work expectations throughout the project. Effective freelancer contracts spell out exactly what you’ll do for the client and when you’ll do it. The more exact and detailed brief you provide, the better. Many freelancers suffer from scope creep, which occurs when the quantity of work on a project grows without a change in budget or remuneration.
The following are some specific items to include in the project scope:
- Date of commencement
- Service’s scope
- Dates for the deadline and the end of the contract
- Payment schedule and rate
2. Terms of payment
You have fulfilled a critical element of the freelance contract if you have performed all of the duties mentioned in the contract’s description of work and services. There’s nothing more frustrating than completing a project and not receiving immediate payment for the work you’ve done. As a result, it’s critical to establish specific terms of payment in your freelance agreement. This section of the contract can include more information than just your hourly or fixed-project rate. When adding payment conditions to your freelancer contract, consider the following questions:
- Is the contract going to be paid on an hourly or fixed price basis?
- Is there a limit to the number of hours that can be billed?
- When are you going to get paid? At the time of delivery, 30 days later, and at specified milestones?
- Will you be given a deposit for a part of the total fee?
- Will your client be charged a late fee if they don’t pay on time?
- Who bears the financial and material costs of the project?
3. End-product ownership and licensing rights (copyrights)
This provision is frequently included by freelancers to establish who owns the work. As the customer is paying you to do the work, they will almost always demand the work contract to guarantee them complete rights and ownership over all aspects of the project deliverables. If you give the client ownership rights, they can do whatever they want with your work and utilize it any way they want.
If you maintain ownership of any aspects of the job, such as proprietary software you produced, you’ll need to specify the client’s rights and terms of usage. Depending on the type of labour and business, customary standards for end product ownership rights and licenses may vary. For example, whereas independent photographers are more likely to license an image, freelance writers frequently hand up complete rights to their clients.
This clause could also refer to putting the project on display in your portfolio. It’s critical to seek permission before including any client work in your portfolio, and securing that permission at the outset of the project helps make that conversation easier.
The law of copyright is complicated and specific. To construct your copyright clause and analyze your complete contract, you may wish to consult an attorney.
4. Termination and terms
If the partnership isn’t working out, including a termination provision or right to terminate in the contract creates a method for ending the freelance contract. Throughout the contract, either party may notice that things aren’t going as planned owing to a lack of communication, missing deadlines, or other factors. You can describe the reasons for termination as well as the costs or penalties connected with terminating the contract early in this section.
Even if you have a clear deadline and contract end date, freelancers typically feel this piece to be essential to include. It becomes even more important for ongoing work since it allows both parties to plan for the loss of money or work product if the contract is cancelled.
5. Interactions with competitors
It’s critical to emphasize to clients the uniqueness of your services as a freelancer. It’s possible that your client would not want you to work with them while also assisting the competitors. Your expertise in working with a client in the same industry but in a different geographic service area, on the other hand, could be considered a plus.
It’s advisable to spell out your policy for serving clients that may have services or business areas that overlap. Here are some questions to think about while writing your freelance contract’s competitive engagements section.
Will you do any business or engage in any activity that competes with the client’s business or service?
- How will overlapping clients’ conflicts of interest be disclosed?
- Is the geographic restriction for clients only applicable to the same sort of business?
- What is the duration of exclusivity? Is it possible for you to work for a competitor when your freelance contract is finished?
A non-solicitation or non-compete clause could be an extension of the restrictions imposed by your work with competitors. You should speak with an attorney to see if agreeing to such a condition is right for you and your company.
6. Confidentiality, non-disclosure, and the right to reveal
It is critical to add a clause covering mutual non-disclosure of any secret information to safeguard both parties. You may obtain information about your client’s business as a freelancer that must be kept secret and confidential. Client lists, corporate plans, proprietary methods, secret recipes, financial information, and other types of information could be included.
The client will want you to keep any confidential information to yourself. This clause may stand alone, or a separate and more extensive non-disclosure agreement may be required (NDA). NDAs are legally enforceable contracts that establish a confidential partnership and spell out how confidential material will not be shared with competitors or others.
7. Modifications and revisions
Work that is creative might be subjective. This clause specifies how many (if any) revisions the project will receive. This can safeguard a freelancer’s time against scope creep, which occurs when clients request multiple rounds of time-consuming modifications and changes.
You can define the fee you’ll charge for further edits or revisions in this area of the contract. To ensure that all parties are on the same page concerning changes to the project deliverables, it may be important to specify what constitutes a “round,” “edit,” or “revision.”
8. There is an indemnity clause in the contract.
Who is to blame if something goes wrong? Both parties will seek payment if the other side breaches the contract in this regrettable event. Indemnification, sometimes known as a keep harmless provision, is a clause that allows one party to shift potential expenses or responsibility to another in the event of specific events.
The fundamental benefit of an indemnification clause is that it can shield the indemnified party against losses or third-party claims arising from the contract or the contract’s activity or deliverables. Both parties may agree to reimburse the other for losses incurred by the indemnifying party’s violation of the contract in a mutual indemnity agreement.
9. Clauses of general application
A general clause is used to cover any extra elements that are introduced to the contract. Legal disclaimers, safeguards, and other remarks can be included in this area.
An arbitration provision is one example of a clause that can be included in a contract. Arbitration is an out-of-court dispute resolution method in which a neutral third party makes the final decision.
Although the majority of freelance assignments are successful, problems and disputes can occur from time to time.
10. Signatures from parties
All parties must agree to a legal contract in order for it to be valid. The most usual and straightforward way to establish this is to have both parties sign the freelancer contract. So, before beginning your next project, be sure that both you and the client have signed the document.
While both parties want a favourable conclusion from their transactions, having a solid contract that explains the terms of your contract with your customer is one of the greatest methods to defend your business in the event of a dispute. A freelance contract is an important aspect of starting and sustaining a company. You risk losing your clients’ trust and business if you don’t have it.
Moreover, an eye for detail is required when reviewing a freelancer contract. Make sure that the agreements set are mutual, considering the expectations of both the parties and focusing on future outcomes. A contract is pivoted on four main components.
A freelancer contract is a way to protect your interest. Along with being the safety net, it also defines the functioning of the business. This legal document ensures that you receive the guaranteed money for the work you deliver and the client receives the work of expected and the promised quality.
Start your freelancing career with Refrens and get expert advice on what to provide the client in a freelancer contract!