For most freelancers, contracts are either:
- complicated, intimidating, mysterious, and bothersome
- simple, rewarding, and worth the effort.
At least that’s what I’ve seen while working with freelancers for over a decade.
Does that ring true for you?
And while I’m not a lawyer*, I have studied freelance contracts extensively and have had countless conversations with my (actual) lawyer friends in order to confidently give unofficial legal advice to freelancers.
In addition, here at AND.CO, we’ve partnered closely with The Freelancers Union to develop an advanced freelance contract that builds secure, mutual, fair relationships.
So in today’s Pro Freelancer Fundamentals article, we’re going to explain the basics of using contracts to set expectations with your client.
*The fact that I’m not a lawyer means all the advice in this article is not official legal advice and you should always double-check with an actual attorney before doing anything. It also means you can’t take legal action against us for misuse of the information herein.
The best reason to use freelance contracts
At first, you might assume you create contracts in order to protect yourself.
That’s partly true, but a contract doesn’t guarantee you anything except a leg to stand on if you decide to take legal action. Unfortunately, pressing charges can be time-consuming, expensive, and exhausting.
In reality, the more important reason to focus on contracts is to help manage and clarify expectations in your client relationships.
Instead of hoping you came to a clear understanding in your pitch meeting or over an email conversation, a contract allows both you and your client to have, in writing, a clear agreement of what to expect and when.
Far more often than providing legal evidence in court, I’ve seen contracts clarify misunderstandings between clients and freelancers.
What expectations should be included in your freelance contract?
So if a freelance contract is intended primarily to have clear, written-down expectations between you and your client, exactly what should be included in your contracts?
Luckily, you can use our contract generator to make things simple but regardless of how you create your freelance contract, here are a few basic expectations it should include:
What’s expected from both parties
First and foremost, your contract is a tool by which you establish what is expected from both you and your client.
This is as simple as stating who is hiring whom and for what and is typically found at the beginning of a freelance contract.
Services to be rendered (details)
Secondly, your freelance contract should include the services you will render for your client.
In this section, outline in as much detail as possible exactly what you’ll deliver to your client in a way that can not be misunderstood.
Itemize each service your client will pay for and the price.
Not only should you and your client agree on what needs to be accomplished, but you should also be very clear about the timeline on which you will complete the services promised.
You can keep it simple by including a singular delivery date or be more thorough by including service milestones, feedback timeline, payment dates, and more.
If you find yourself constantly debating over a timeline with clients, this is a good section to focus on.
Your freelance invoice can outline typical payment terms such as “NET 30” or “Due Upon Receipt” but your contract should outline when and how a client will pay you for services rendered.
- Will they pay as you deliver certain services?
- Will they pay one lump sum at the beginning or end of your service?
- What will be the penalties for late payments or past-due invoices?
- How will they pay (PayPal, check, wire transfer, etc)?
Getting clear on how, what, and when a client will pay, can help you avoid late client payments which can frustrate you and slow down your business.
Finally, you should include details about how and where this contract can be enforced.
As I mentioned before, the ideal scenario is to never actually have to enforce a contract in a court of law. It can be a bit time-waster and mildly frustrating at best.
But in order to give your contract a certain level of gravitas, be sure to clarify in writing where, how, and when the contract is enforceable in the event that one party or another chooses not to follow through with the agreement.
Other (less-common) scenarios to consider
For most freelancers, the information above will provide more than enough of what you need in order to draft a solid freelance contract. Again, if you choose to use our contract generator, these are the factors we focus on.
But with millions of freelancers around the world, it’s impossible to cover every possible freelance contract scenario.
Here are a few less-common scenarios you may find yourself in, wondering how to adjust your contract:
Recurring payments or retainer clients
If you have clients who are on retainer or pay you every month (or any period of time), you’ll want to adjust your contract. Specifically, your timeline will be “ongoing” until either you or your client choose to sever the relationship in the form of writing.
In that case, part of your contract terms might include a severance clause explaining when and how you or your client can discontinue your arrangement.
Working with other freelance or subcontractors
If you frequently subcontract work out to other freelancers, you may feel compelled to outline that fact in your contract. The easiest way to do this would be to form an LLC (although not required) so you are entering into an agreement between two business entities.
If nothing else, simply being honest and upfront about the situation is sufficient in many cases. There’s no legal requirement that I’m aware of forcing you to disclose whether or not you subcontract your freelance work.
Signing non-compete contracts or Non-disclosure agreements
Some clients may want you to sign a non-compete contract (saying you can’t do work for any of their competitors) or a non-disclosure contract (saying you can’t talk about this client’s work with other people).
Where possible, we suggest you stay away from these restrictive add-on agreements. They can hold you back as a freelancer, often restricting who else you’re able to sign as a client or whether you can include work in your portfolio or not.
Of course, each scenario is different so if this client represents a huge opportunity for your business, signing these additional documents might be worth it.
One final piece of advice
One final piece of advice I’d like to offer when it comes to setting expectations in your contracts is this:
Do your research and be confident.
Often, the clients you’re working with are as hesitant about contracts as you are. So do your research, use our advice above (and our generator) to build a nice contract, then present it confidently to your client.
Expect to negotiate every so often and don’t be deterred when people want to review your contract with other people before signing it.
Most of all, don’t let contracts hold you back from growing your freelance business. Keep them simple and professional—as a way of managing expectations—and you’ll be just fine.
This post originally appears on the AND.CO Blog