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Should You Require Contracts as a Freelancer?

BySammi Caramela,
business.com writer
|
Nov 28, 2018
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> Business Basics
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Considering freelancing? Here's everything you need to know about freelance contracts.

When you pursue freelancing, you are choosing an independent career path that requires you to look after yourself. In other words, you're your own boss, and you need to secure your finances, insurance, retirement savings, etc., on your own terms. 

One major responsibility freelancers must prioritize is creating a contract to establish a legal agreement between you and your clients. 

"A freelancer needs a contract," said Drew DuBoff, blogger and chief career coach. "Because they are not full-time employees, they are acting as independent contractors, so this document is an independent contractor agreement." 

If you're considering taking the freelance route, here's everything you need to know about freelance contracts.

What it is

A freelance contract is a legal document that outlines the specifics of your agreement with a client to prevent miscommunications or foul play on either end. It can take many forms, from a two-line email stating the projects you will be completing and compensation to a signed physical sheet including various clauses. However, the more formal the contract is, the more protected you are from an infringement. 

"Technically, [email] counts as an expressed contract, but it won't be as legally binding," said DuBoff. "Having a contract adds legitimacy, and having an arbitration clause … will set a procedure for what to do in the event the contract is breached." 

While you might think it's enough to have proof that your client agreed to compensate you for your work, your contract should be much more in depth than that.

What to include

DuBoff includes these clauses in his freelance contracts: 

Compensation

You want to indicate the exact compensation for each project, assignment, etc., that you plan to complete and the deadline for that payment (i.e., within two weeks of submitting, last day of every month, etc.) 

"Getting paid is one of the most important elements, so outlining this is crucial," said DuBoff. "Especially if you invoice through a third-party platform such as PayPal, working in fees to the contract is important." 

Currency

To ensure you're on the same page, especially when working with international clients, DuBoff recommends adding a section specifying the expected currency (i.e., U.S. dollar, Euro, etc.)

Confidentiality and ownership of intellectual property

Work with your clients to determine which side possesses ownership of the intellectual property in the relationship. 

"This is important especially on sensitive projects and if you are contributing to any copyrighted, trademarked or patented material," said DuBoff.

Services provided

In this section, describe the exact services (i.e. copy editing, social media, etc.) you will be providing to your client.

Governing law

According to DuBoff, this clause includes what happens when a contract is breached. Arbitration will help both parties move in the right direction without confusion or exorbitant legal fees.

Communication

Communication is key; this section will establish how you will communicate with your clients, whether via email or phone calls.

What to do in case of a breach

If any of these clauses are broken, you should act right away. For instance, if your clients refuse to pay for any reason, there are many steps you can take, from sending a friendly reminder to involving outside help. 

If the issue is minor, like a misunderstanding of one of the clauses, you might be able to work one on one with your client to smooth things over. 

However, more severe and deliberate breaches require further action, usually requiring outside help. Your arbitration clause should also help you determine how to move forward.

Sammi Caramela
Sammi Caramela
See Sammi Caramela's Profile
Sammi Caramela has always loved words. When she isn't working as a Business.com and Business News Daily staff writer, she's writing (and furiously editing) her first novel, reading a YA book with a third cup of coffee, or attending local pop-punk concerts. Sammi loves hearing from readers - so don't hesitate to reach out! Check out her short stories in Night Light: Haunted Tales of Terror, which is sold on Amazon.
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