Freelance Contracts: How to create client contracts the right way (and a contract creation tool to help you)
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Freelancing can be a risky business.
Much of the relationship between you and your client will come down to trust. But one practical way you can make things crystal clear up-front is signing a robust freelance contract.
Having a contract in place is not an absolute guarantee that there will be no disputes down the line, but it is a useful way of setting out key terms so that both parties have a clear understanding of the job in hand and an incentive not to misbehave.
Contracts come in various shapes and sizes, from agile two-page contracts to 15-page tomes with all the legal bells and whistles attached.
If you are on a freelance job for a large client, the client may produce their standard contract for you to sign.
Smaller clients will often ask you to produce your own contract or simply rely on trust.
Either way, you should ensure that you enter into a contract each time that protects your rights, reduces risk and helps you keep your sanity.
Here are a few key clauses that you could include in a contract and some tips on how to get them right in negotiations:
Scope of work
It is really important for both freelancer and client to be as clear as possible about the job in question.
This can help prevent ‘scope creep’, which is that familiar experience of clients asking you to go beyond what was asked of you without extra payment.
Perhaps more importantly, it helps to build a positive working relationship.
The scope of work will be included either in the contract or in a separate scope of work appended to it.
Deadlines and deliverables
Be upfront about the timeline.
Is there a final deadline to work to?
Will you need any revisions – if so, how many?
What are the deliverables and when are they due?
One particularly effective way of structuring your work is through a milestone-based system.
Think about setting out what the key stages in the job are likely to be and list actionable goals and the dates by which you hope to achieve those goals.
The more concrete you can be here, the better.
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Nature of role
Clients are often careful to ensure that the relationship they have with you is one of client and freelancer, rather than employer and employee.
This is for a very good reason.
The law around what constitutes a relationship of employment are complex but, if it turns out that you are actually in practice an employee, there can be adverse financial implications for the client (e.g. they need to pay national insurance contributions).
As a result, there will usually be some wording in a contract to try to cover the client.
Freelancers sometimes worry about this, but it is a fairly standard inclusion.
One question that your clients should be thinking about is ‘who owns what?’.
In most cases, the client will insist on owning all intellectual property in assets created under the contract.
That essentially means that they will be the legal owner of the logo, code, marketing plan or whatever you produce on the job.
This is understandable.
However, it is useful to ensure in the contract that you can at least show any assets/artwork created in your own portfolio for marketing purposes.
Sometimes, you may want to own the intellectual property jointly.
This can be complex and may require legal advice to get right.
Payments are fertile territory for disputes, with freelancers often being paid late or not at all.
Generally, payments are structured on a fixed fee or a day rate basis.
Fixed fees are typically structured as 50% up front and 50% on completion of the job, but can also be structured according to milestones as per the above.
Think about what you will charge if the client goes over and above the scope of work or the number of days they asked you to work.
Make sure also that you are clear in the contract about exactly when you will be billing, when you expect to be paid and what the penalties will be for late payment.
What happens if the client does not like what you have produced?
What happens if the client pays you late?
Many freelancer contracts are disputed in one way or another although very few get to court.
If you have the foresight to include an alternative dispute resolution procedure, you can save yourself a headache down the line.
You could, for example, contract that any disputes should go to an independent third party mediator, rather than having to go to Court and incurring the expense of legal representation.
Clients often make a big thing about confidentiality, sometimes understandably.
Often they will ask you to sign a confidentiality (or non-disclosure) agreement.
If they do not have an NDA for you to sign but ask for confidentiality provisions in the freelance contract, you need to be careful to ensure that what they are asking for is reasonable.
One thing in particular to avoid is ‘non-compete’ clauses.
These are paragraphs that will try to restrict you from working for the client’s competitors.
There is some doubt as to whether these clauses are enforceable under English law, but either way you should push back on anything like this that could lead to you not being able to work with other clients (and earn money!).
Terminating the freelance contract
One question that should be on your mind when drafting a contract is ‘what happens if things don’t work out?’.
Imagine, for example, if you were on a three-month contract for a fixed fee of £3k.
If after month two, the client decided to terminate (end) the contract, you would presumably want to be paid something.
Make sure in the contract that you are compensated in some way if this happens.
A common method is to be paid for time worked – so in the example you would get £2,000.
Both freelancers and clients should want some ability to terminate the contract.
It is important to ensure that you make clients give you some notice of this. Freelancing is hard enough without suddenly having your cashflow turned off.
Contracts may seem like yet another piece of admin to do, but they can really help you out when things get tough.
Producing your own contract can also boost trust between you and your clients, which could in turn lead to repeat business or referrals.
Talk to a lawyer if you need to but there is a wealth of resources out there to help you with contracts and save you some cash.
One tool I find really useful is Juro, which offers freelance contracts and e-signing. Juro is free to use and creates simple-yet-robust contracts, which are nicely designed and cover the main points.
Clients seem to like the e-signing too!
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