If you are getting started in freelancing, you must know that establishing a freelance contract is key before you begin work.
However, it’s surprising to note that only 28% of freelancers use them.
Well, 54% of freelancers say clients take their sweet time to fulfill a payment request. And then there are cases of publishers changing terms without warning.
If you are a freelancer operating without a contract, you risk being caught in either scenario or even worse.
Here are the benefits of writing a freelance contract:
1. Avoids costly omission
Omissions provide room for potential traps. For example, if you have a way how you hand revision, delivery of work, or receiving payment, you may use a contract to define that to a client.
Without a contract, the client will use what seems fit, which may neither protect your interest nor your time.
2. Eliminates misunderstanding
Relationships aren’t perfect. If a misunderstanding erupts and you have a contract, you can refer to the agreement to clarify any dispute.
Add a clause in your contract that states: “only what we agree upon in the contract forms the agreement between you and the client.” This ensures that the client introduces nothing that was discussed on phone yet not in the contract.
3. Avoids being stiffed
This is probably the number one reason to have a contract. Research shows that 44% of freelancers have been cheated by a client. You don’t want to be one of them.
Using a freelance contract protects you from non-payments as clients know that failure to settle a payment will result in lawsuits or public shame.
4. Sets the terms and conditions early
60% of freelancers believe they aren’t taken seriously by the community or clients leaving them exposed to mistreatment or being taken advantage of.
To avoid mistreatment, lay down your terms and conditions. That includes how work will be delivered. What happens if the client doesn’t pay or probably isn’t satisfied with the work?
Set the boundaries and expectations upfront and get everyone involved to take your work seriously.
6 essentials to include in your freelance contract
Knowing the benefits of a freelance contract is the first step to getting started in freelancing. The second is finding out what makes up a good contract.
Here are the essentials to include in your contract.
1. Scope of work
Freelancers without a proper contract risk finding themselves in scope creep. This is when, during, or after completing a project, the client introduces additional work to the project outside the agreed terms.
Be specific about what the project is all about and what you as the freelancer should do. Prepare also a way out when things are out of scope. That is, if you may want to renegotiate, reset deadlines, or refuse work when things have gone overboard.
Scope of work may require you to look into:
- Chapter length: if you are ghostwriting a book, be clear on the length of each section to stop the client from returning with demands of increasing the length of the book or a chapter.
- Media creation: some freelance projects like ebooks and white papers require high-quality media that accompany the text.
Ask who is responsible for the images and pictures or designing book covers. Sometimes it is you or not. Sometimes the client is comfortable with free images and pictures.
Nonetheless, don’t assume and find if you will create the media that accompanies the text.
- Edits/revisions: How many rounds of edits should you conform to? State openly the number of revisions a copy should go through.
Usually, two to three rounds are enough, but if you don’t spell, you may find yourself in an endless cycle of revisions and rewrites and this can be exhaustive and time-consuming.
2. Sharing your process
There are certain freelance projects, especially in design or programming, where the client may require you to fill them in on the project’s process, milestone, or deliverable.
State clearly in your contract what you will share or not. Avoid giving out the secret to your success or proprietary methods you use to accomplish a task, else risk finding your methods or tactics being used by the client’s in-house team.
3. Ownership rights
This mainly refers to ownership rights for your piece or project. If you are working for hire, it means you don’t own any rights to the work. This has to be made open on the contract before undertaking any work.
If you are putting your name on a project, determine if it is worthwhile so you don’t find your name on work that is out of scope or not useful in your portfolio.
Determine the rights you are selling to the publications. Is it exclusive reprints rights or non-exclusive reprints’ rights? The latter enables you to sell the reprints of your work or article and the former forbids licensing the work as reprints.
4. Payment and late fees
Compensation and fees vary across different sectors. However, these are the payment types you may have to consider.
- Upfront payment: client pays before the project begins.
- Net 30, 45, etc.: determines when payment is due after the invoice is sent.
- Pay on publication: pay is meted when the article gets published.
- Split payment: mostly for larger projects with different milestones. You may require a portion of the payment before starting a project and another portal after completion.
- Pay on submission: payment is made when the client receives the invoice or when you turn in your assignment.
- Pay on acceptance: payment is done after the client accepts the piece, usually after one or two revisions.
- Late fees: added to a contract compensation provision if the client fails to pay on time or within the agreed period.
- Kill fees: charged if the client cancels the project you have begun working on to cover the time and resource spent on the project.
As much as you may have your own requirements or payment preference, your client may also have their own guidelines. Hence, be open to negotiate or to settle on a common ground acceptable to both you and the client.
5. Refund policy
Refunds occur when the client has already made payment in advance and cancels the project or when they aren’t happy with the work.
Though the latter can be settled with a few changes or edits. However, if the client refuses the option to correct changes and has already paid, you may need to refund. This has to come clear on the contract how you make the refund and the fees it attracts.
6. Communication method
A huge advantage of being a freelancer is that you are not restricted by time or location. This has made some clients conclude that freelancers are always available 24/7. Hence, they overstep their boundaries.
Specify how often the client will receive your support during the contract duration to avoid surprise calls from clients at odd hours demanding you answer their questions or tackle an emergency.
Specify also how you would like to be contacted and your preferred communication method to limit cases of app fatigue. You may also consider capping the number of meetings that you will have with the client.
How to write a clear freelance contract?
To avoid misunderstanding and speculations, your contract needs to be airtight. Here are the gaps to fill before sending a contract to a client.
1. Use quantitative language
This usually concerns payment and working hours. When stating figures, avoid using words, but quantify your terms. If you are charging per project, state the amount.
For example, “I charge $750 for 1,000 words” If it is per hour, state your amount. Such as “My rate is $50 per hour” or “I am only available for 20hrs per week”.
If it is a short-term project, add a duration. Be clear whether it is 30 days or 14 days and don’t assume the project will end when you submit the assignment.
2. Be specific and concise
No need to use legal jargon here but simple and easy to understand terms. Refrain from using ambiguous terms or words like “Bona Fida,” “Inter Alia,” or “Pro-rata” that may create unnecessary communication barriers for either party to understand the contract.
For example, if you are working on net-14 payment terms, clarify that you will invoice the client on the second Friday of the month and not vaguely indicate that “payment is due after a fortnight.”
3. Dates
Your contract should have a starting date and probably the duration it will last. If it is an ongoing relationship, state the day you will renew.
Add “valid from A to B” clause plus a “service due date.” The latter is the duration you will execute the contract.
It can be 3 months or 12 months before you reevaluate the contract. This will help you gauge your ability after the contract ends and determine whether you can raise your rates or offer more service to the client when renewing the contract.
This date information is also useful for meeting your own tax filing obligations as a freelancer. It will make filling out a 1099-Q form easier, for example, so long as this is relevant to your circumstances. Whatever the case, a well-defined contract can serve you well when tax deadlines draw near.
4. Use the official business names of both parties
Some businesses operate as an LLC and also as a corporation. Always have the correct name of the entity you are working with to ensure you can easily defend your contract in a dispute. Be wary if the client lacks a business name or uses a nickname or a personal name.
Conclusion
No doubt having a freelance contract is an important step toward securing the future of your freelance business. If you have been doubting the importance of a contract, now you know how crucial it is.
If you are not using a contract, it’s time to formalize the relationship and save your freelance business from late payments, unrealistic expectations or changes, legal battles, or any other unforeseen incident.
About the Author:
Adela Belin is a content marketer and blogger at Writers Per Hour. She is passionate about sharing stories with the hope to make a difference in people’s lives and contribute to their personal and professional growth.
