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How to Write a Freelance Contract

Freelance contract

Freelancing gives you a lot of flexibility and freedom to work on your own terms but having multiple clients means that it’s really important to have clear expectations and frameworks to work within.

This means that a freelance contract is extremely important and the essential elements of a freelance contract are:

  • Scope of work
  • Payment terms
  • Intellectual property rights
  • Confidential Information
  • Term/Termination
  • Liability & Indemnification
  • Governing Law
  • Signatures

By incorporating these key areas into a freelance contract you can work safe in the knowledge that your rights are protected. Read on for more details on each of these areas, as well as valuable tips for crafting an effective working agreement when you freelance in the UK.

What Is a Freelance Contract?

A freelance contract is a formal, legally binding agreement between a freelancer and their client. This document clearly outlines the terms and conditions of the working relationship.

This written agreement has several important purposes:

  • Describe the scope, deliverables, and timelines of the project.
  • Sets the payment schedule and rates.
  • Ownership rights and confidentiality protocols are specified.
  • Establishes general expectations for both parties

Well-written contracts are important because they help avoid confusion and protect everyone involved in case disagreements arise during the course of the working relationship.

They prioritise professionalism and ensure that everyone involved in the project has the same goals and motivations from the very beginning.

Key Contract Components

Each freelance agreement will vary slightly based on the nature of the work required, but there are core elements that should be present in every contract sent:

Parties Involved

You should list all parties that will be bound by the contract. This should include full names, contact details, billing address if different, business names, and addresses.

In addition to these details it is important to mention the data on which the contract is issued and signed by both parties. Timelines are helpful in understanding the context if the need arises later.

Project Scope and Deliverables

Concisely outline the freelancer’s responsibilities and expected outputs based on the original proposal.

For example, a brand strategy engagement for Client X involves:

  • Four strategy sessions
  • Competitor analysis report
  • Tailored brand messaging framework
  • Revised visual identity guideline

Add limitations on work as well – what falls outside project parameters. This further defines scope.

The project scope should provide an overview of the tasks or work that the freelancer is expected to work on. This could be ‘10 x articles a month’ or something more general like ‘General administrative duties required by the client’. Or if working on a retained contract, it could specify 15 hours a month on SEO duties as required.

Payment Terms

Another very important thing to mention are the payment terms. These terms should include details about the payment amount, methods, timelines and eligibility for reimbursement.

It’s important to specify:

  • The total cost of Project
  • The Payment Schedule( e.g. 50% deposit and the remaining sent after completion of project)
  • Late Fees( e.g. 1.5% of monthly interest if any delay in project completion)
  • Accepted methods for payments( e.g. these include bank transfer, Paypal and credit card )
  • Reimbursement of Expenses( e.g. the costs for travel that is pre-approved by the client)

Project Timeline & Milestones 

It can be useful to break larger projects down into phases or milestones. For example, ‘requirements gathering’, ‘Data collection’. ‘Build & Delivery’, ‘Test and Completion’. Each of these stages would be paid upon sign off.

Setting up milestones and timelines help to set accountability and easy timestamps for payments to be made.

IP Ownership & Usage

In most cases, clients will need full rights to any work delivered. This means they can use it however they want to in the future but sometimes freelancers can be credited for their work. You should ensure that the agreement clarifies;

  • Who has the rights of assets created during the project?
  • How can the freelancer show the work as their samples?
  • Are things like brand standards and templates owned by a certain company?

Most of the time, customers get full ownership and usage rights, while freelancers keep the right to show off their work in their portfolios unless otherwise agreed upon.

Confidentiality Clauses

Non-disclosure agreements (NDAs) should be used to protect private information that is shared during a project. This section should:

  • Explain what private information is and how it can and cannot be used.
  • Set a date by which the confidentiality ends, such as two years.
  • Make sure that outside partners used in the process of the work also adhere to the NDA.

These rules protect clients’ interests when they share confidential information that is essential to the success of a project.

Relationship Definition

It is very important to clarify and state in the agreement that the status of a freelancer is that of a contractor not an employee. For example:

The Freelancer works on their own as a separate organisation. They choose their own jobs and work hours and are responsible for paying their own tax and national insurance. Neither side is responsible for the business deals or payments of the other.

Liability Disclaimers

You need to make sure that you are adding a liability disclaimer that clears either side of breaches of contact that could not have been reasonably expected based on the agreed terms. For example:

“Neither party is responsible for not meeting its obligations when it’s reasonable to do so because of things outside its control that make performance commercially impractical.”

Clearly state that you do not represent the client and they do not represent you.

Termination Procedures

Every project will have an end point and it’s important to clarify what happens at this point in the relationship. For the terms about termination procedure you need to mention the protocols for ending the contract early, or at the expected completion date.

This should include:

  • The Required Notice Period ( E.g, 30 days)
  • Terms for eligibility of partial payment in case the work is unfinished
  • Any penalties due, as a result of a to breach of contract

Indemnity Clauses

Indemnity involves securing reimbursement for loss or damages incurred. By adding a phrase that protects both parties, the freelancer can’t be sued for claims made by a third party without proof of fault. The client also promises to protect the worker in the same way. This two-way covering protects people who aren’t guilty from unfair legal attacks.

By including all of the key elements above into your freelance contract, you can feel confident that you have a well-rounded agreement. Just remember to change the specifics regarding each project.

When Do Freelancers Need Contracts?

People might question whether informal agreements are required, especially for smaller or occasional freelance jobs. Simply put, you need a freelance contract whenever you engage in work or provide services for others on a freelance basis.

Freelance contracts are extremely important for several reasons:

They Define Scope and Prevent Creep

Contracts that clearly outline the tasks and objectives that the freelancer is responsible for delivering in a project preventing additional work, or changing in direction from occurring over time.

Having work outlined clearly in the document means that any adjustment can trigger a renegotiation of the contract terms and ensure that you’re not doing more work for the same amount of money for example.

For instance, let’s say that when you agree on a logo design, it means that you won’t have the opportunity to make several changes or revisions to it. Any extra work will be charged separately.

They Set Payment Expectations

A well drafted freelance contract will outline the fee for the project, or an hourly rate or a retainer amount, the payment schedule that applies, and if any penalties are due for late or non-payment of invoices.

Payment milestones are also popular for freelancers and are a good way to stagger income on a particular project. For example, 50% upfront payment, 25% on the delivery of milestone 1 and the final 25% on completion.

Establish Ownership Rights

All the work created by a freelancer creates questions over who owns it and who has the right to use it. This falls under the topic of intellectual property (IP). The contract should set out whether the freelancer retains any rights to the work or if full ownership is passed to the client.

If ownership is passed to the client, freelancers may need to use an approved watermark or seek permission when showcasing the work that they have done. This happens when a freelancer uses a portfolio to show their work to other potential clients.

Maintain Confidentiality

Freelancers often have access to private client data and end customer data which makes confidentiality clauses in the agreements important. Non-disclosure agreements prevent either side from sharing sensitive data related to the client’s business.

Define Contractor Status

It’s important for freelancers to understand that contractual relationships are different from employmentship, and this needs to be clearly stated in the formal agreement.

Normal employees use the company assets and time to work, however, freelancers have to use their own time and equipment. They must possess the skills needed to work independently free from direction.

The freelance agreement should clearly state that the worker is a contractor and not an employee of the client.

Outline Termination Processes

It’s important to define end dates when contracts will end and how accounts will be settled on completion of work. You should also ensure that there is an early termination clause in the document.

This would allow either party to end the contract early in particular circumstances. Include written notice periods and how outstanding payments will be settled.

In simple terms, freelance contracts are extremely important, to protect the interests of both sides of the contractor and client relationship, regardless of the size, familiarity, or duration of the project.

Keeping Contracts Updated

You should remember to update your contract templates with new information and clauses as they become available. This helps to ensure that your contract is still relevant and useful. Specific areas to focus on include:

Legal and Regulatory Changes

Contractors and small business owners are affected by updates to working regulations imposed by the Government. Set alerts for your industry and a reminder to review any new legislation every 3 months or so. Then update your agreement with any relevant changes.

Clarifications and New Agreements

When the scope of your work for a client changes, you should document this in the freelance agreement as either an update or by re-issuing the contract with updated terms that reflect the additional work requested.

This is important for maintaining transparency and keeping everyone involved informed about any changes or additions that may have occurred.

How To Draft A Clear & Concise Contract

When drafting your freelance contract, it makes sense to keep it as simple as possible, whilst ensuring that your interests and rights are protected.

Try to use simple, concise language, avoid complex legal jargon, and set terms out in plain English. If any ambiguous terms are used, clearly define them in a glossary or appendix section of the agreement.

Use headings to break up the text and highlight different areas of the agreement and use a formal font that is easy to read.

Finally, be as precise as possible when it comes to setting out terms. For example, the phase ‘in 10 business days’ is far more useful than ‘less than two weeks’.

Using straightforward language and page structures will help to remove any misunderstanding and unintended legal disputes.

Finally,

In summary, if you work independently on a freelance basis, it’s imperative that you have a strong freelance contract or agreement in place with the people that you’re working for.

Within this document, that should be signed by both parties, you should cover the scope of work, milestones, deliverables, payment terms, intellectual property rights, confidentiality protocols, liability disclaimers and termination procedures.

By taking the time to draft and update a reliable, formal agreement, both freelancers and clients can work knowing that their rights and responsibilities are secure.

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