If you’re new to freelancing and keen to secure work, it can be easy to overlook practices that seem cumbersome, time-consuming and needless. Practices like putting formal contracts in place to clarify responsibility, establish deadlines and generally protect the parties involved.
You might worry that insisting on a contract will make you appear uptight or untrustworthy but, generally speaking, it’s those that are wary of contracts that should be mistrusted. If you don’t set the goalposts in cement then who’s to say that someone won’t move them halfway through the game?
Even worse, if you think you’re setting out with a verbal agreement that’s later superseded by another, you may find yourself subject to the terms of a contract you’ve never seen.
But Aren’t Contracts Expensive?
“You have to speculate to accumulate” – It’s a sentiment that you’ll have heard a thousand times before but it’s not always true.
Proper contracts can save you money: They ensure that you’re paid on time by laying down ground rules for payment terms, turnaround times and liability. Sure, once there was a time that you’d have had to go and see a lawyer and pay them to draw up contracts for you and any new clients and this would have meant (a not insignificant amount of) speculation.
Modern services offer common contract templates that cover all kinds of products and services, and these can be easily tailored to your business. They can offer contracts for everything from internships to loan agreements and non-disclosure agreements to web design contracts.
Contracts to Consider
There are a few common contracts you might want to consider when putting agreements with new clients in place:
The Payment Agreement
As a freelancer, some unscrupulous clients may exploit their knowledge of the fact that you’ve no accounts department to chase them for payment. However, their legal department will ensure they’re wary of breaching a legally binding contract.
Payment agreements detail payment terms between involved parties and specify payment amounts, payment schedules and who the responsible parties are. Don’t leave the office without one.
The Memorandum of Understanding
This is a simple agreement that covers the terms of an agreement between two parties, clearly outlining the tasks, objectives and expectations of all those involved. This document isn’t so formal and is more an agreement that the parties involved will work together and remain committed to mutual goals.
The Nondisclosure Agreement
Often, this will protect the client more than it does you. If your client expects you to undertake work specific to their intellectual property (e.g. code) then it’s to be expected that they’ll want guarantees that you’re not going to be the leak that gives the upper-hand to their competitor, who you might also be working for! There are a few different types of NDA templates, but the ultimate objective is to maintain secrecy.
The Pay-Off
Ensuring you protect yourself and your interests from the very beginning will help to ensure the longevity of your company.
Now’s the time to start as you mean to go on.
By John Pearson
John is a serial entrepreneur and writer who is passionate about helping small businesses launch and grow. His work has been featured in Huffington Post, Entrepreneur, and Forbes.
