A simple guide to contracts for new freelancers
Let's start at the beginning: What is a contract, exactly?
A contract is a legally binding agreement between two or more parties. It can be enforced by law if one party breaches it in any way. So, legally speaking, contracts are important.
Contracts don't have to be formal legal documents, either; they're not just for lawyers and judges and courtrooms. Written contracts are the best way to guarantee that all parties involved understand their rights and responsibilities under an agreement—but even an informal handshake can count as a contract if there's something valuable being exchanged (an "offer"), it's accepted (an "acceptance"), and both parties enter into an understanding in good faith with no intention to deceive (a "mutual understanding").
All of this means that even when you're not doing formal freelancing work, you're probably entering into contracts every day. When you agree to buy someone lunch because they do your laundry on a regular basis? That's a contract! When you tell your buddy he can borrow your car this weekend in exchange for taking some photos for your portfolio? A contract!
It builds trust and creates a common ground with your client
A contract is the foundation of any professional relationship. It builds trust and creates a common ground between you and your client. You might be thinking, “But I’ve done this before, I don’t need to waste my time with contracts!” or even, “My clients would never do that to me.” The truth is, trust is not something that you can just assume—it must be built!
The good news is: a legal agreement can go a long way toward creating trust in your business relationship. A legal document clarifies mutual obligations and understanding for both parties involved in the project so neither party feels like they are giving too much or being taken advantage of by the other party.
It helps you avoid misunderstandings and make sure you’re on the same page as your client
Working with a contract is the best way to avoid misunderstandings and make sure you’re on the same page as your client. A good contract for freelancers puts out all of the terms, conditions, and clear rules you and your clients will operate by. It lays out all of the mutual obligations you both have agreed to meet. It can also help resolve conflict and determine who gets to keep the rights to work that was produced during an assignment.
A lot of people are afraid of contracts because they think they’re too complicated or intimidating, but that’s not true! Contracts don’t have to be scary or complex—and if you understand how they work, how to write them yourself, or where to go for templates, you can save time and money by having one in place before starting a project. Contracts are an essential tool in setting expectations and outlining what happens if something goes wrong.
It protects both you and your client should something go wrong
It protects both you and your client should something go wrong.
A contract is basically a rulebook. It states who’s responsible for doing what, when it must be done, where it will be delivered, and how much the client will pay for it. A contract gives both parties peace of mind: if every term is clearly spelled out in advance, there’s less chance of a dispute later on—or of a missed deadline that leaves you scrambling to meet your next one!
And if there’s an unexpected snag? The contingency plan in the contract should spell out how to handle worst-case scenarios like illness or sudden deadlines on another project.
It’s a tool you can use to negotiate if there are things you don’t like
The thing is, negotiating is a good thing! Clients may not know what they need, or they might have a lot of requests that don’t actually help them. Your job as a freelancer is to use your expertise to make sure they get what they need.
A contract is just a tool you can use to negotiate if there are things you don’t like—just make sure the client knows that you are negotiating!
It allows you to better manage expectations and set clear rules for your collaboration with clients
A contract allows you to better manage expectations, and set clear rules for your collaboration with clients. The contract benefits both parties in equal measure: it protects you from clients who might cheat or use your work without permission, and it protects the client by ensuring that they pay a fair price for the deliverables they receive.
Think of a contract as a tool which can be used to manage your relationship with your client. It can help you negotiate if there are things you don’t like, such as delayed payment dates or sudden changes to scope--and ensure that those concerns are addressed in a written agreement before any work begins. A contract helps prevent misunderstandings between you and your client too; after all, both parties are clear on what is expected of them should problems arise.
What you should do before you start working on a new project
Before you start working on a new project, remember that any legal agreement is only as good as the terms it defines. Make sure the contract is fair, balanced, and that the rights of both parties are observed. The tips below will help!
You should always talk to a lawyer before signing a contract — especially if it’s complex or involves lots of money. If you’re not sure about one clause in particular, ask an expert to review it for you (make sure they don’t have a conflict of interest!).
Always assume that your client doesn’t understand all the legal and technical aspects of their own industry — this is why they hire you in the first place! It's up to you to make sure every detail is spelled out clearly so there are no nasty surprises later.
- “I agree with my client that he shall own all rights I create for him, including but not limited to copyright ownership over my work product."
Here's another example:
- “The freelancer shall be paid once per month by bank transfer or PayPal (this includes weekends) unless otherwise specified by other parties."