Contracts are legal agreements between two parties and are the best way to protect yourself as a freelancer.
A contract lays out the details of the relationship with your client and what’s expected from both parties - ensuring freelancers get paid for their work on time and in full. They also remove any potential for either party to back out of their agreement – or at the very least penalise them if they do.
Contractual agreements can be tricky, and many longtime freelancers will have contract templates they use for most jobs, but there's a reason they're also incredibly important to get right. Just ask Clive Rich, CEO of legal experts and valued Crunch partner, LawBite:
“Intellectual Property matters are often time-sensitive. It is estimated that 70% of a typical company’s value lies in its intangible assets, so protecting your creative or original work, inventions and brands is crucial for freelancers. There are many things to think about when drawing up a contract with a client. If your client provides you with a pre-written contract, make sure you read it carefully." - Clive Rich, CEO of LawBite
Here are some of the elements and clauses you should include in any contract, and some template clause wording you can use.
Contract sample #1 - The work and the timeframe
Just to start with the basics, you want the contract to outline exactly what’s expected of you and in what timeframe. This is to make sure your client doesn’t suddenly turn around asking for more work and refusing to cough up extra cash because the contract has some vague wording.
Get as specific as you possibly can. Something like “run the company’s social media accounts for three months” is open to too many interpretations. With something like that, ensure you’re getting set hours and days onto paper. You can also specify how much back-and-forth you’re prepared to do per project.
For example, copywriters may stipulate that they’re prepared to do no more than three rounds of edits.
- The Client engages the Consultant to provide the services described in the Schedule in accordance with this Agreement (“Services” in this Agreement).
- This Agreement will start on the date which is written at the beginning of this Agreement and will continue until the date set out in the Schedule unless ended earlier.
Contract sample #2 - Your requirements for the project
This is to ensure your client is offering up all the resources you will need to successfully complete the project. This can include use of the company’s facilities or specialist equipment. Putting this in your contract means the client can’t blame you if they don’t keep up their end of the deal. It will also stop your client trying to push any extra costs onto you that they should be responsible for.
Contract sample #3 - Are you a freelancer or employee?
With IR35 investigations lurking about, it’s a good idea to make clear your relationship with your client. Make sure you’re designated as an independent entity and not an employee of your client. If you need more information and support regarding IR35, check out our IR35 hub. You'll be able to access all of our Knowledge articles on the subject, as well as our jargon-free business guide and all the further support we offer.
- The relationship between the Client and the Consultant will be that of “independent contractor” which means that the Consultant is not the Client’s employee, worker, agent or partner, and the Consultant will not give the impression that they are.
- As this is not an employment contract the Consultant will be fully responsible for all their own tax including any National Insurance contributions arising from carrying out the Services. If the Client has to pay any such tax then the Consultant will pay back to the Client in full, any money that the Client has to pay, and they will also pay back the Client for any fine or other punishment imposed on the Client because the tax was not paid by the Consultant.
Contract sample #4 - How much you’re getting paid
Depending on the nature of the project, this might be an hourly or day rate or possibly a full project cost. Figure out which option is best suited and go with that. It’s also worth including that any hindrance from your client can cause costs to rise.
- The Client will pay the Consultant the fee set out in the Schedule, together with any VAT that applies, if the Consultant has sent an invoice in the way set out in the Schedule, together with any details of the hours or days worked on the Services during the period covered by the invoice.
Contract sample #5 - How and when you expected to get paid
Late payments are the bane of every freelancer so it’s important to make your payment terms crystal clear in your contract. The most common practice is to be paid upon completion and the submission of an invoice (although these often give the client 30 days to pay).
If you’re taking on a big project that means payment could be months into the future, it might be worth negotiating an upfront fee. For example, asking for 50% of the total fee upon acceptance of the job. Another choice could be to spread the full fee across a certain amount of time, such as 20% of the total amount every month for a five-month project.
Either way, you don’t want to end up going broke because you forgot to specify your payment terms and schedule. Also be sure to include details on late payments fees. While you’re protected by the law when this happens, it’s always worth setting clear terms to encourage prompt payment from your client.
- Pay each invoice within thirty days of receiving it;
- Be entitled to deduct from these fees any sums which the Consultant may owe to the Client at any time.
Contract sample #6 - Intellectual property ownership
This is really important to include so that your client can’t run off with your work. Make sure you include an agreement that states you own any work your produce up until you receive payment. This means you can sue your client if they start using your work without coughing up the cash.
- The Consultant assigns to the Client, without any further payment, all rights known as “intellectual property rights” (such as copyrights, or rights in designs) which arise in relation to any work prepared by the Consultant in the course of carrying out the Services (called “Works”), and any ideas or inventions or innovations (called “Inventions”) they come up with in the course of carrying out the Services. This applies whatever form those Works or those Inventions take. The Consultant agrees that if they are prevented by law from transferring these things to the Client, they will hold them on the Client’s behalf, on the basis that the law calls “on trust”.
Contract sample #7 - Rights for usage and resale
Clients will most likely expect to own any work you produce for them – which isn’t surprising – but in some instances, you may want a special licensing set-up.
It’s important to keep in mind that if you want to include specific and complex clauses, you should get legal advice. You don’t want to think you’re sufficiently protected only for your client’s lawyer to pick your contract apart.
This might cost you a fair bit, but considering you can use it as a blanket contract for all your future work and the protection it offers, it might be worth the expense.
- That they have not allowed and will not allow anyone else to use the Inventions or any of the Works or any of the intellectual property rights in either of them, and that nobody else is using them as far as they know;
- That the Inventions and any Works will not infringe anybody else’s rights and if this is not correct, the Consultant will pay the Client back for any money lost as a result of any successful claim against the Client.
Where to find help
Our article “Eight clauses your freelance contract shouldn’t be without” gives you more helpful advice about what needs to be included.
The above examples shouldn’t be taken as legal advice. If you’re looking for a bulletproof contract template or another legal document that’s tailored to you and the clients you engage with, help is available from our friends at Lawbite.