Wondering what to include in your contract as a freelancer? With remote work quickly becoming the “new normal”, more and more people are considering starting a freelance business. The appeal is strong – it’s literally in the name – you’re free! Free to be your own boss, free to choose your own projects, and free to set your hours. Before you get too excited though, it’s a whole new world when it comes to the legalities and contracts. If all those terms & conditions we never read (oops!) have taught us anything, it’s that the online space is changing all the time. Having a carefully created contract with numerous clauses is essential to protecting yourself as a freelancer.
Here at Legally Set, we understand that this can feel very daunting, especially if you’re just starting out. Even though we highly recommend taking a look at some of our contract templates, we have made a list of clauses to consider to get you started. You don’t want the law to be a “you don’t know what you don’t know” kind of situation. Ignorance is never bliss in the courtroom. To get you started, here are 10 tips on what you need to consider and include when drafting a freelancer contract:
1.) The Boring Stuff
AKA, the contract. The legalities are tedious (we should probably title this section “The REALLY boring stuff”) but they are the whole point. Things like your name, the company’s name, the titles that you’re using for the purpose of the contract – get them right. It’s important to address things like: Who at the company is allowed to make changes? Who at the company is allowed to approve the final product? Who is going to sign the check? It’s mind-numbing, but it’s also the most critical part of the contract.
2.) The Exciting Stuff – the MONEY.
Or specifically the money. You want to make sure you’re getting paid what’s due to you, and you are charging appropriately for your work. It’s not enough to just say “X amount of money for the completion of Y.” You should include your specific rates, the amount of time and work it’s going to take, and a final estimate. It’s important that it be just an estimate, and not a guarantee of the final price, or you could end up underpaid for the amount of work the client ends up requiring. Discuss project change orders or protocol for when you’re nearing the estimated hours allotted but there is still more work to be done. How do approvals for overages work?
If it’s a longer project, consider setting payment milestones for your work.
Finally, be sure to include in this clause the method of payment. Make this clause a roadmap for how you want the payment part of this relationship to unfold.
3.) What materials you need from your client (and timelines!)
You’re not pulling this project out of thin air and handing it to the client completely finished, even though we all wish that was the case. You likely need information and materials to get started, and if there are multiple steps to a project, you’re probably going to need approval at every step to ensure that the final project is what your client wants. If you’re on a deadline, and the client isn’t getting back to you, you need the contract to say that those kind of delays aren’t your responsibility and that your deadline will shift for every day of their delay. Clearly spell out roles, responsibilities and timelines.
4.)… And Another Thing! Watch Out for Scope Creep!
The last thing you need is for a project to slowly (or suddenly) morph into a bigger and bigger one. Especially if you’re still getting paid the same amount for it. Make sure your contract includes a limit on the number of hours, revisions, and extra labor that might go beyond the original estimate. Whether you want this clause to allow you to refuse additional work after this point, or start charging an increased rate is up to you. Just make sure you’re covered!
5.) Don’t Forget to Mention Revisions
Actually, revise that last point. Revisions shouldn’t just be mentioned as a way to prevent scope creep, they should really have their own entire clause. Some people are never satisfied, and some people (as harsh as it sounds) are just trying to squeeze extra work out of you. Having a clear limit on revisions will take care of both. This doesn’t mean you can’t help your clients if they need more revisions, you just need to make it clear upfront what the cost will be.
6.) Payment Dates in your Contract
Your contract should cover what happens if a client is late in paying you. In an ideal world, this would never happen, but if this were an ideal world we wouldn’t need contracts.
Using payment milestones can go a long way in preventing this, so you should include specific due dates for any payment you are owed. You need to make sure that your contract clearly establishes your right to charge late fees (and how much they’ll be). Make sure you give yourself the right to pause your performance of the work if payments are significantly overdue.
7.) Add in a Separation Clause
What happens if it’s not working out? Your contract should include a clause (or clauses) that outline what the steps and penalties are if the contract needs to be broken and the project abandoned by either party. This clause should cover how much notice is necessary, what money needs to still be paid or refunded, and the situations where you will not continue the contracted work – as a start!
8.) Keep the Free in Freelancer
The whole reason you started this business is to be your own boss. Feel the wind in your hair, march to the beat of your own drum, and all the other things all the motivational posters say. Make sure you make it clear that you are free in your contract (okay – maybe leave out the stuff about hair and drums). Your contract should clearly state that you are independently contracted and you have no obligations beyond providing the work described. Your schedule is precious and it is your own – keep it that way.
9.) Usage and Copyright Rules in Freelancer Contracts
Who owns the work when all is said and done? There’s going to be a lot of content changing hands throughout this process, but in the end, most of it is going to be back with the client. That doesn’t necessarily mean they own it though.
This is probably the most complicated clause in your contract: who owns the finished product. If the client owns it (which they often will), consider if you want stipulations about your name being attached to it. Protect yourself in case the company goes in a direction you’re not comfortable with down the line. Or, maybe having your name attached is going to bring more business. In that case, you may want to keep some of the credit on the finished product.
If you retain ownership of the finished product, be sure to include any usage rules there might be. Whether you want to use the finished project as part of your portfolio or promotional materials should also be established in this clause.
10.) What to include in your contract in case you get sued…
It’s the absolute worst-case scenario: you end up in court. Maybe you’re suing them, maybe they’re suing you. The important thing is that it’s not your fault.
Even if your contract is solid and you did everything right, just having to go to court is punishment enough. Be sure to include a clause that establishes the jurisdiction (state or federal) of the contract. Where will any court hearings take place? Establishing the jurisdiction keeps you close to home. It also makes sure you’re familiar with the legal obligations in the city, state, or county where the trial may be taking place.
In summary, there are many moving pieces that dictate what to include in your contract.
Having a well written contract is the key to any successful client relationship. It’s truly what will allow you to keep doing what you love for as long as you want. And isn’t that the dream, after all? To get started, consider hiring an attorney or if you don’t have the budget, purchase attorney-drafted contract templates that you can tailor to each project. At Legally Set, we have tried to think of everything so you don’t have to. Happy freelancing!