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As a business owner, it is vital to protect your rights when engaging with other parties. Your freelance contract ensures that both sides understand expectations and how to meet them. This strategy will help you maintain fruitful, productive business relationships.
Keep reading for everything you should know about freelance contracts:
What is a Freelance Contract?
Freelance contracts, also known as independent contract agreements, consulting agreements, and service contracts, are legal contracts that set the terms and conditions between a company and a freelancer. A freelancer is a legitimate business professional who provides specialized services beyond the ordinary course of the company’s business. Companies find freelance contractors through headhunters and labor marketplaces.
Should Freelancers Use Contracts?
Freelancers should use contracts to protect their rights and business when engaging with other companies. If you question whether you need one or not, consider this scenario:
You are working with a client who disputes your work. Ask yourself the following:
- Do you have proof the relationship exists?
- Could a reasonable person find the terms between the two parties?
- How could you prove to a judge that the other party agreed to the terms?
If you only work on a verbal contract, then the answer to the above-referenced questions is “no,” at least not initially. Business relationships that lack contracts are far more expensive to dispute or litigate than written ones in some cases. Ensure that you put your agreement in writing.
Other benefits of freelance contracts include:
- Easier to prove enforceability versus verbal contracts
- Offers both parties a chance to understand their obligations
- Protects your rights when navigating contract disputes
- Creates a formal and engaged legal relationship
- Prevents “mission creep,” which can create new liabilities
- Gives proof of past due debts in civil court
The benefits of a freelance contract are numerous. However, a contract is only as lock-tight as the person who drafted it. For this reason, many freelancers choose to work with an attorney to help them prepare the initial iteration.
It is a strategy that can help you avoid legal and financial mistakes in the future. This result produces peace of mind for years to come. Always work with employment lawyers when drafting your contracts.
Examples of Freelance Engagements
Freelance engagements typically involve those that are short- and long-term projects. However, companies generally contract with freelancers due to the highly specialized nature of their skillset. Most state labor laws require companies to only work with freelancers that offer services outside of their usual business offerings.
Examples of freelance engagements include:
- An artist creates a commissioned pottery piece
- A freelance journalist writing articles
- Web designers completing a website
- An independent contractor completing home repairs
- Film editors contracting with producers of a documentary
If you provide freelance services, the client must abide by the terms of the contract. They must also avoid exerting managerial control. Otherwise, they risk violating contractor law that protect independent contractor rights and freedoms.
Here is an article about the difference between Independent Contracts vs. Employees .
Important Terms in Freelance Contracts
Freelance contracts should include terms that both parties can understand. They should consist of the core provisions and clauses that are unique to your business and industry, including deliverables and consideration. Although the terms will vary on a case-by-case basis, there are some must-have clauses you should include in your freelance contracts.
Every contract is different. The terms that you include ultimately depend upon the project you are completing and more. However, there are a few standard provisions that every freelance contract should have.
Eleven must-have clauses in freelance contracts include:
- Names of parties and companies
- Recitals and definitions
- Scope of work
- Payment terms and schedules
- Governing Law
- Arbitration Clause
- Liability limitations
- Third-party liability
This list is a terrific place to begin when writing your freelance contract. Some projects may be more or less intensive than others, which means that your specific agreement may require additional provisions. Employment lawyers can help you determine which sections and clauses should go in your contract according to state and federal laws.
Mistakes to Avoid
Freelance contract mistakes can result in time and profit losses. Since your business reputation and legal exposure is on the line, you should comprehensively negotiate the terms and conditions of your contract, including obligations, limitations, and more. Otherwise, you could be left on the hook for liabilities that weren’t originally intended.
Seven mistakes to avoid in freelance contracts include:
- Not detailing the terms and conditions of payment, such as an hourly vs. flat fee
- Forgetting to include attorneys’ fees in disputes
- Signing an unreasonable non-compete agreement
- Failing to define the scope of work for the project
- Forgetting a kill fee or cancellation fee
- Not considering state labor laws vs. contractor laws
- Not defining intellectual property rights of each party
Freelance professionals generally hire an employment lawyer to draft and negotiate their contracts. Doing so will ensure that it is appropriately written and enforceable under state and federal laws. An attorney understands how to craft an agreement that meets your objectives while closing potential loopholes that can stress your contractual relationship.
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How To Write a Freelance Contracts
No two freelance contracts are alike, which means that a boilerplate template generally does not work well for the specialized nature of freelancing. You should write a freelance contract that reflects the specific relationship you share with your client and must have clauses applicable to your situation.
Follow these 11 steps when writing freelance contracts:
- Step 1. Negotiate the terms and conditions with the client
- Step 2. Hire employment lawyers to help you draft a contract
- Step 3. Identify the parties and their address
- Step 4. List the project deliverables to avoid mission creep
- Step 5. Establish a rate and payment schedule
- Step 6. Specify which state laws your contract recognizes
- Step 7. Determine how you will handle disputes
- Step 8. Present the initial freelance contract draft to the other party
- Step 9. Renegotiate the freelance contract if necessary
- Step 10. Arrange for a freelance contract signing
- Step 11. Provide hard and/or digital copies to each party
The above-referenced list is not always the same process for every freelancer or client. Your approach may be more intensive than others. However, a freelance contract is a surefire way to ensure that everyone is on the same page and aware of the limitations when working under a contractual agreement.
Getting Help With Freelance Contracts
Freelance contracts will set the tone for the rest of your relationship regardless of which side you’re on. Employment lawyers in your state are best-suited to guide you through the process and provide legal advice. They can also help you answer questions on the fly as you work with the other party.
A customized contract for your freelance engagements will ensure that you are meeting your business objectives while protecting your legal rights. If a client presents you with one, always have employment lawyers review the agreement for accuracy, enforceability, and lawfulness.
Meet some of our Freelance Contract Lawyers
Alen Aydinian is a versatile attorney with over a decade of experience working with business owners and real estate professionals. Client engagement is central to a successful attorney/client relationship. Alen personally manages all client relationships so that his clients can see how their interests are being served at every stage of the process.
I help small business owners build and protect their dreams. I always thought that I would just be a litigator. Then I joined an intellectual property clinic in law school. We were helping nonprofits and small businesses reach their goals. I fell in love with the work and decided to open my own firm so I could keep helping them. When I decided to start Victrix Legal, I decided that it would be a modern law firm designed to serve professionals. It would be different from every other law firm. In my experience, my law firms are designed to promote inefficiency and reactionary lawyering. Because in most firms, you make more money when you spend more time on a project. And you lose money if your client doesn't get sued. In my opinion, that's a built-in conflict of interest. My firm is different. I use flat fees for most basic projects to keep costs predictable for you and incentivize efficiency. I offer long-term advisory plans and legal audits to prevent issues from happening. I want my clients to see me as their business partner, not just the guy they call when they are in trouble. If any of that interests you, please reach out to me. I offer free consultations. Let's set aside some time and talk about what your legal needs are.
My clients know me as more than just an attorney. First and foremost, my background is much broader than that. Prior to attending the Valparaiso University School of Law, I earned a Master of Business Administration and ran a small business as a certified public accountant. Thanks to this experience, I possess unique insight which in turn allows me to better assist my clients with a wide range of business and tax matters today. In total, I have over 20 years of experience in financial management, tax law, and business consulting, and I’m proud to say that I’m utilizing the knowledge I’ve gained to assist the community of Round Rock in a variety of ways. In my current practice, I provide counsel to small to medium-sized businesses, nonprofit organizations, and everyday individuals. Though my primary areas of practice are estate planning, elder law, business consulting, and tax planning, I pride myself on assisting my clients in a comprehensive manner. Whenever I take on a new client, I make an effort to get to know them on a personal level. This, of course, begins with listening. It is important that I fully understand their vision so I can help them successfully translate it into a concrete plan of action that meets their goals and expectations. I appreciate the individual attributes of each client and know firsthand that thoughtful, creative, and customized planning can maximize both financial security and personal happiness. During my time as a certified public accountant, I cultivated an invaluable skill set. After all, while my legal education has given me a deep understanding of tax law, I would not be the tax attorney I am today without my background in accounting. Due to my far-reaching experience, I am competent in unraveling even the most complex tax mysteries and disputes. My CPA training benefits my estate planning practice, too. In the process of drafting comprehensive wills and trusts, I carefully account for every asset and plan for any tax burdens that may arise, often facilitating a much smoother inheritance for the heirs of my clients. Prior to becoming certified as a CPA, I made sure to establish a solid foundation in business both in and out of the classroom, and the acumen I’ve attained has served me well. Not only am I better able to run my own practice than I otherwise would be; I am able to help other small business owners fulfill their dreams, as well.
Hello! I am a young attorney with four years' experience in real estate transactions, fund formation, and general corporate transactional work. I graduated in 2016 from the University of Texas - Austin and I am barred in Texas.
James David W.
I graduated from Harvard Law School and worked first for a federal judge and then a leading DC firm before starting a firm with a law school classmate. My practice focuses on company formations, early-stage investments, and mergers & acquisitions.
After 21 years as an in-house attorney for both large and small organizations, I formed Osensky Law in 2017 to bring my unique in-house counsel insights to entrepreneurs and smaller businesses. Unlike a traditional law firm, my focus is on delivering the kind of legal support a business wants and needs - not just technically correct legal advice, but strategic problem-solving with a focus on providing business value to clients. Since earning my law degree with honors from Tulane University Law School, I worked as in-house counsel for large multinational companies such as Georgia-Pacific and MCI, as well as smaller organizations including Georgia Technology Authority and Georgia Tech. This unique combination of experience allows me to bring together the best practices of all of them. I have led multi-disciplinary teams to achieve important business goals and have successfully negotiated many multi-million dollar deals. Now, as a business owner myself, I can relate to my clients and understand the challenges they face. I have an established reputation for providing practical advice and perspectives based on my legal training combined with over 20 years of practical hands-on experience as a business lawyer and leader. Today, with my firm Osensky Law, I advise clients on starting a new business, buying or selling a small business, and doing business with contracts.
G'day, my name is Michele! I work with startups, entrepreneurs and small/medium-sized businesses across the country in a wide array of industries. I help them with all of their ongoing, daily legal needs. This includes entity formation, M&A, contract drafting and review, employment, asset sale & acquisition, and business sales or shareholder exits. I'm half-Australian, half-Italian, and I've lived the last 20+ years of my life in America. I've lived all over the USA, completing high school in the deep south, graduating cum laude from Washington University in St. Louis, and then cum laude from Georgetown University Law Center. After law school I worked for the Los Angeles office of Latham & Watkins, LLP. After four intense and rewarding years there, I left to become General Counsel and VP of an incredible, industry-changing start-up called Urban Mining Company (UMC) that manufactures rare earth permanent magnets. I now work for Phocus Law where I help run our practice focused on entrepreneurs, startups, and SMEs. I love what I do, and I'd love to be of help! My focus is on providing stress-free, enjoyable, and high-quality legal service to all of my clients. Being a good lawyer isn't enough: the client experience should also be great. But work isn't everything, and I love my free time. I've been an avid traveler since my parents put me on a plane to Italy at 9-months old. I'm also a music nut, and am still looking for that perfect client that will engage me to explain why Dark Side Of The Moon is the greatest album of all time. Having grown up in a remote, and gorgeous corner of Australia, I feel a strong connection to nature, and love being in the elements.