9 expert tips on freelance contracts
A legally binding contract clearly states the payment terms and obligations. A mutual understanding of expectations benefits everyone, as it helps avoid costly misunderstandings once the project has begun. It is also essential that the agreement in a freelance contract is legally binding and enforceable since the two parties involved are extending their services beyond employment agreements that may be governed by labor law.
What is a freelance contract?
Freelance contracts are documents that detail the expectations of an employer-employee relationship. The contract spells out the project’s scope, schedule, milestone dates, payment terms, and more. As a freelancer, you should have a contract in place for every job you accept. This makes your agreement legally binding and also protects both parties from any misunderstandings or unexpected problems down the road.
A freelance contract defines how much the freelancer will be paid, what they will get in exchange for their pay, and any possible consequences if any of the parties fail to perform to their requirements.
Which sections should a freelance contract include?
A freelance contract is an agreement made between a potential client and a freelancer. It can vary on a per-project basis, but it usually includes three major components that both parties should sign.
Include the following information in the contract:
- Names, contact information, and dates
- Your role and responsibilities
- Payment information
- Confidential information
- Independent contractor terms
- Limitation of liability
- Termination terms and Indemnity
9 tips to writing your own freelance contract
Be specific and thorough
First impressions are everything, even in a freelance contract. To nail this impression, you must write a solid assurance from the get-go. Being thorough in freelance agreements is essential. Ambiguity in contracts may lead to not only frustration but also red tape problems when working with clients. That’s why we suggest avoiding vague verbiage and offering exact numbers and other data where possible.
Define payment details
Perhaps the most important thing to cover in your freelance contract is payment. When you get the job, you have to be clear about your rate and the terms of how and when you’ll get your money. Typically, most freelancers charge a monthly or weekly retainer fee, with an additional per-hour charge for work completed beyond that.
Write the scope of work in details
The SOW is the most crucial part of any contract. Without the SOW, it is tough for one party to determine if the other party has been satisfactorily performing the work. The SOW also allows parties to understand what work will be provided over a specified period. For example, many freelances and ad-hoc agreements can be vague about what may be provided at any given time. By clearly stating the work that needs to be performed, the agreement becomes more apparent for both parties.
Define project timelines
Setting up clear-cut project timelines helps avoid arguments and will define the scope of work you’re supposed to be doing. Defining the project timelines and milestones in a contract is vital. It helps limit potential disputes between freelancers and clients, which can save both time and frustration. If you write vague job descriptions, your client might be confused about what they can expect from you.
Write a termination clause to secure your rights
The early termination clause is a mechanism that permits the contract to terminate prematurely if the client fails to meet a particular obligation or requirement. In this way, either party can terminate the agreement by giving the other party sufficient written notice of the intent to terminate.
Late payment terms
It seems like a no-brainer that late payment terms are a part of all freelance contracts. But, most of the time, they aren’t included in contracts. The freelancer is paid monthly or weekly for work done on an hourly basis. In this case, late payment fees are simply compensation for lost time.
If a client doesn’t pay you on time, the late payment fee becomes an additional income line. This makes it possible to avoid a cash crunch and keep working on your business without the pressure of debt or a requirement to find a new job.
Include retainers section
A retainer agreement is simply a contract, usually over several months or a year, that guarantees a freelancer will get paid a specific rate for a pre-set number of hours or projects per month. It’s a brilliant way to reduce some of the anxiety and stress that comes with freelance life as you know exactly how much you’re going to earn each month.
It’s always a good idea to ask for a deposit in order to secure a significant job. It is in your interest to include insurance costs in the projects that you bid for, along with an upfront deposit (which protects you against late payment). This will then prevent any nasty surprises if the client changes the specifications of the project once you have started.
Learn more about intellectual property rights
A freelancer contract may also stipulate that the client will own the copyright of any work you’ve created for them, as that will then be included in your invoice. If this is the case and you wish to sell the work later, you will need to inform your client and include this information in your contract.
FAQ about freelance contracts
Do freelancers need contracts?
A freelance contract makes it clear what your responsibilities are and what your client expects from you. Having one opens the door to quality control and helps protect against misunderstandings. It’s also suitable for backing up your income in case of a dispute with a client. So yes, freelancer, you need a freelance contract!
When do freelancers need contracts?
A freelance contract sets clear expectations between the two parties for a specific project over a set time. Freelance contracts help employers and freelancers avoid conflicts that may lead to litigation. They set clear guidelines for when a project should start, how many revisions are allowed, what is expected for the work, and who owns the copyright of the contents produced by the freelancer. That’s why before starting a freelance job, you need to make freelance contracts. Yes, for every gig and freelance job.
What is a short-term freelance contract?
If you are doing short-term gigs, you can make a short-term freelance contract. If you are working with the same client on a regular monthly retainer and dedicating most of your time to a specific project, you should make long-term contracts.
Short-term projects are suited to small tasks or one-off projects. Short-term contracts are suited to people who want to create a niche for themselves in a specific industry but do not wish to offer their services full time for a particular client.
How do you write a simple contract?
You should follow a set format so that your agreements are easy to understand and enforce. The wording should spell out all the terms with no chance for misinterpretation.
How do I terminate a freelance contract?
You will want to make sure that you are complying with the contract. The easiest way to do this is to stick with the contract’s guidelines and requirements to terminate the contract. You should write down that you are ending the contract as of such a date… make sure that you can support why you’re ending it as well. A rejection in terms of support works well, but keep it short and polite. You don’t want to badmouth your contractor or cause drama, so keep it clean and professional. Here are the simple steps you can take when terminating your freelance contract:
- Control and carefully read your contract.
- Provide enough notice period.
- Give an apparent reason.
- Define an end date.
- Keep your relationship professional and on good terms.
Is a handwritten freelance contract legally binding?
The short answer is yes. A handwritten freelance contract may seem cumbersome, archaic, and impersonal than a written contract on a computer or tablet. However, this type of written freelance contract can be legally binding if the document details specific clauses of the contract and both parties sign off that they agree to the terms of the contract.
Remember, with Ruul you can generate legally compliant freelance contracts using readymade samples for service and non-disclosure agreements for free.
Every freelancer knows why invoicing is important and central to their business: Not only will it save you a lot of time, but it will also make sure that you get timely payments, which can save you... read more.
Not knowing how to create an efficient work space at home is a common problem freelancers face. Here are some useful tips on how to set up the ideal home office!... read more.