Freelancing jobs are more common than ever, especially in 2020. It allows the workers the flexibility to set their own hours while doing the work that they’re passionate about. It can also be beneficial to companies looking to hire gig workers like graphic designers and content creators.
However, freelancing also comes with some potential pitfalls. It’s important that you’re on the same page as your “employer” before starting any job. Not only do you want to make sure you deliver exactly what they want, but you also want to make sure you get paid the right amount and on time.
It’s great to get a verbal freelance agreement, but if you really want to protect yourself, you’ll need a contract that outlines your terms of service. Here is an overview of good contractual practices that can help protect freelancers.
What is a freelance contract?
A freelance contract is a legal document that serves as an agreement between a freelancer and an “employer,” here referred to as a client. It defines what each party can expect from the other. Unlike full employees, companies don’t typically hire freelancers indefinitely. Freelancers are often hired to complete specific projects.
A binding freelance contract will lay out a number of enforceable agreements, such as project type, length, time schedules, and pay rate. Contracts like these are intended to protect both the client and the freelancer alike.
When do you need a freelancer contract?
As a freelancer, you should have a contract in place any time you perform a job for a client, whether on a particular project over a set period. Whether the contract is drafted on the freelancer or the client’s end, be sure to read it carefully before you sign. You may end up negotiating terms with the other party, which is normal. Just be sure that you have a contract agreed upon and signed before you start any work.
The exception to the contract rule is if you’re hired through a temp agency. Temp workers don’t need contracts because they’re usually hired to fill a company position for a short time rather than work on a specific project.
What should be in a freelance contract?
Firstly, if you are unfamiliar with contract drafting or feel uncomfortable doing so, please seek the advice of an attorney before forming any legal relationships. Otherwise, you may be unaware of certain clauses or items that will put you at a significant disadvantage.
If you are creating your contract, there are several elements you want to include. Having these terms in your contracts can help protect you from late payments, nonpayments, and more. Here are a few essential things every contract should have:
- Introduction statement
- Payment terms
- Deliverables and due dates
- Scope of the project
- Copyright information
- Contract cancellation
Your introduction statement states your name and your client’s name and introduces your roles. It also gives a summary of everything you’ll be going over in your contract. Try to keep this brief. You’ll have the rest of your contract to elaborate. Introduce yourself as the freelancer or contractor and introduce your customer as the client.
Spell out how you want to get paid, your payment schedule, and what payment method you prefer. Be as specific as possible. Your client should know when you require payment, your project or hourly rate for their project, and how they should pay you.
For example, you might choose to be paid $1,000 on a Net 30 basis (payment is due within 30 days of delivery) by PayPal direct deposit or credit card. If you’re working with someone from another country, you might even have to discuss currency and any exchange rates.
Deliverables and Due Dates
This details what work you will complete for the client, and when the work is due. For example, if you’re a freelance headshot photographer, there are several ways you can deliver images to a customer. Will you provide a digital download of a client’s photos using a service like Dropbox, a flash drive with their pictures loaded onto it, or physical prints of their images?
Your due date should give you a reasonable time frame for finishing a project. Take into consideration everything you’ll need to do to complete a task. As a headshot photographer, you’d have to include time for things like downloading, editing, and sending a client’s images.
Scope of the Project
While most of the clients you work with will be respectful, some may try to squeeze free work out of you. Even if they don’t do it purposely, a customer with unreasonable expectations can waste your time and effort.
Imagine that you’re writing blog posts for a technology website. You’ve written a 1,500-word SEO article that fits your client’s requests exactly. However, right after you finish, the client asks you to make it 3,000 words instead without extra payment. This is called scope creep, and it occurs when a client adds more work to a task than you previously agreed on.
If your contract doesn’t state that the scope of work is 1,500 words, you might have to do two times the amount of work you planned on. No one wants to do extra work without extra compensation.
If you freelance long enough, you’ll eventually have a client cancel on you. If you don’t have contract terms that discuss your cancellation policies, you might not get paid for the hard work you’ve already done.
Outline things like penalty fees and time limits in your termination clause. These terms protect you from working for free. If a client doesn’t pay for a huge freelance project that they decided to cancel halfway into its completion, it can be disastrous for your income.
For instance, if you’re a freelance software developer, you might be charged with completely updating a company’s website. Midway through your project, the company gets bought out by another business and decides it’ll scrap their own website and just feature their products on the new company’s site. If you have a term in your contract that a client must pay you for the work you’ve already done, you won’t have to worry about getting paid.
Your freelance contract won’t be legally binding unless both you and your client sign the document. Once signed, everyone should know what to expect, saving headaches and trouble down the line.
This can also help raise any red flags if the client gives you a hard time about signing the written agreement. You’ll get an idea of how difficult the client might be and can decide to take your services or products elsewhere.
Other Issues To Be Aware Of
If you are a freelancer whose craft is creative in nature (writing, drawing, digital media, etc.), you may run into intellectual property issues. The general rule is that when you create any kind of intellectual property, you own the copyright. However, when you sell your work, you will sell the copyright to it as well. For example, if you’re writing content for a website, you might want to keep the copyright for your material or feature the piece in your portfolio to get more jobs. If you want to keep these rights, it HAS to be in the contract.
Some companies may have you sign things like nondisclosure agreements (NDAs) before working for them that could keep you from sharing your work. Be sure to carefully read any contracts that a business wants you to sign before actually doing so.
Get more with contracts for your freelance business
Freelancing can be liberating, but there’s a lot of potential risks to doing it. You don’t have the same protections that full-time employees do. So, it’s essential to design contracts that protect you from working for free. You may even want to use a freelance contract template or seek legal advice to ensure your contract is as thorough as possible.
Good freelancing contracts will help you form friendly and respectful working relationships with your clients and make you appear more professional. Having a written contractor agreement for the terms of your service with each client will ensure you’re treated and paid fairly.
Are you starting a freelance business and still learning the ins and outs, including freelance contracts? ZenBusiness can help. We offer numerous resources that will make starting and growing your business quicker and easier. We’ll help you fret less about paperwork so that you can put your energy toward freelancing.