Seven contract clauses every freelancer needs

Freelance work can be daunting. On top of managing your own workload and finances, you need to be prepared for “worst case” scenarios. Unfortunately, many freelance contractors get to work without first equipping themselves for when things go wrong. Whether you are a software engineer, graphic designer, app developer, consultant, copywriter, storyboarder or something in between, one of the first things to consider is a good contract.

A lot of freelance work is about project delivery and managing expectations. Your expectations should be reflected in a contract that enables you to get working quickly, avoid some hard conversations, and ultimately preserve your business-to-client relationships and your professional reputation. For example, when you discover that your client likes to call you at 9pm, or doesn’t intend to meet payment deadlines, it is helpful to have addressed these topics proactively in a binding agreement.

Presenting a balanced contract to your client will have the added benefit of creating trust between you. Far from appearing demanding or confrontational by requesting that your contract be signed before beginning work, a contract sends a message of mutual respect and professionalism. It also helps to ensure that both parties are on the same page about what you will do and how you will do it.

If you are beginning to think about what your contract ought to cover, or if your client has presented you a contract and you are not sure whether to sign, we are here to help.

Here are some components which we regularly see and advise on:

1. Intellectual Property Rights

We consider this a top priority, and so should you. Remember, IP can be defined broadly to include your creative works, branding, software code, and confidential business information that gives you a competitive edge, such as formulas, processes and designs – generally anything related to the deliverables of the contract. What ownership are you hoping to retain? For example, what components will you need to use in future projects? How and when will ownership of the work pass to the client? And what if they haven’t paid you in full? Or what if the project is terminated before completion? Does there need to be any restrictions on how the client can use the work in the future?

Pro tip The copyright in certain work (like a photograph, drawing, plan, computer program, or film) belongs to the client who commissioned the work. If you want to instead retain your copyright, you will need to contract out of this default rule.

2. Scope of work and timeline

The exact scope of work should be outlined as far as possible before the project begins. This should include a detailed description of the services or deliverables, and key milestones and deadlines. Getting this in writing avoids “scope creep” or later discovering that you and the client have different expectations.

3. Payment terms

This should include a clear payment schedule (up front deposit, milestone payments, final payment) and what happens if payments are not made on time. A business reasonably requires payment in order to continue working, and therefore the consequences in the event of non-payment should be specified. Don’t forget to consider how you will be compensated if the project is terminated before completion.

Pro tip Remember that including payment terms (like the payment of default interest or compensation for your debt recovery costs) only on your invoices is not enough – those terms should be included upfront in your contract.

4. Revisions

No project is complete without changes of plan. Anticipating changes with a detailed schedule for revisions and amendments will save you from some uncomfortable conversations later. You should consider the number of revisions included (if any), the process for requesting changes, the process for accepting changes, and additional fees to be paid for extra revisions or scope changes.

5. Warranties and liability

Naturally, you will have your own expectations for the quality and performance of the project. What warranties (assurances) are you willing to provide to your client about the project? This is about striking a balance between supplying quality work and not making yourself available to improve the work until the end of time. Placing limits on your liability to the client will protect you from bottomless legal (and financial) responsibility.

6. Contact information

It’s important to specify how and where both parties can be reached for project-related communications. This should include your contact hours, as freelance workers are often juggling multiple contracts and are sometimes treated as being “on call”. If you value a specific working schedule (and/or life balance), this should be reflected in the contract.

Pro tip If you choose to work Monday – Thursday only, including that in your definition of “Business Days” in the contract can protect you when the client asks why you are not responding on your designated days off.

7. Confidentiality

A confidentiality clause is crucial for protecting both freelancer and client. The contract should clearly define what sensitive information is being shared in the course of the project and what non-disclosure or non-use obligations will apply. As a freelancer, you need to be very sure about what confidential information you are receiving, what your obligations to protect and not disclose that information are, and how long those confidentiality obligations will last. Don’t forget to think about what commercially sensitive information you are sharing with the client – that needs to be protected too.

A contract is personal to you and should reflect your expectations for yourself and your client. Customising the contract based on the particular needs of your industry can ensure that the important aspects are covered, and that the agreement is enforceable. If you need advice on how to protect yourself and what you do, come and talk to us.

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