The freelance industry is big. There are people that perform freelance work as writers, photographers, and consultants in every industry. Freelancers Union and Upwork estimate that there are 56.7 million freelance workers in the United States.
When you land a freelance job, you want to make sure you are being paid a fair wage for your work. The freelance contracts provide protection for all. The contract binds you to do the work and your client to pay you.
Read on to learn everything you need to know about preparing freelance contracts so you get paid every time you perform freelance work.
The Importance of Freelance Contracts
The word contract may make you cringe, but when you are working in the freelance word that one step makes a clear statement: you are a professional. The client will view you as someone that provides a valuable product or service. They will have more confidence in someone that is willing to put their obligations in writing.
A contract also protects the client when they pay a deposit for future completion of work. By presenting yourself as a competent business person you will garner more work in the future. The contract also helps prevent and/or resolve any issues.
Without a contract, you may end up in an email flurry with the client expecting work they think is part of the agreement, but you never agreed to. The last thing you want is a disgruntled client who will provide negative feedback about your business.
One of the largest problems freelance workers face is getting paid. A contract shows what work you will perform when it is to be complete, what the cost is, and when payment is to due.
This needs to be specific to prevent the client from side-stepping their obligation. For instance, if you have a $1,250 contract and have agreed for it to accept it in four payments, you need to specify the amount of each payment.
The contract may specify payment is $500 down, and then three additional payments. Be specific, showing that monthly payments are to be $250 each due on the 15th of each month beginning 30 days after signing the contract.
This may seem logical, but everyone has bills and unexpected expenses. Without specifics, you could easily accept the $500 and then the client only sends minimal payments of $25-$50 the first two months. The contract helps you anticipate income and keep it steady.
Don’t Forget to Figure In Tax Obligations
There are two things to remember when you perform freelance work. The first is that in the United States the Fair Labor Standards Act does not consider you to be an employee. This allows you to establish your own rate of pay. There is no requirement for the client to make sure you receive a minimum wage for the work you perform.
The second thing to consider is that as a freelance contractor you have an obligation to pay income tax and self-employment tax. Self-employment tax is 15.3% and covers Medicare and social security normally paid when an employee. These are all things you need to consider when establishing the cost for your work.
Your contract for freelance work should specify any necessary copyright terms. This includes who owns the product that you produce, how it may be used, and the length of time it may be used without additional compensation.
There is a section in the U.S. copyright law called “Works Made for Hire.” This section states if a contract for freelance work fails to specify copyright law, then the copyright belongs to the creator. This means as a freelancer, you automatically retain all copyrights to your work unless you specifically release that right to your client.
Even though leaving copyright out of a contract may be to your benefit, you do not want to leave it out. If a client later finds out that they are not receiving in full what they thought, it leaves an impression of you as a dishonest or sneaky freelancer.
If you are releasing the copyright to the client for their use, you may want to include a clause that allows you to use the work in your freelance portfolio.
Freelance Contract Design
When you are creating your freelance agreement make sure you include “must-have” clauses that are the basics to every contract.
The following are the minimum clauses for every contract:
- A detailed description of the work to be performed
- If the client needs to provide you with anything before work can be done and how their obligation impacts the completion deadline
- The date on which all work is to be complete, and/or dates on which different stages of the work will be done
- Payment details, including the total price, method of payment, down payment amount, and when the balance is due
That will meet your legal requirements should a conflict arise with obtaining payment. To provide further protection for yourself and your client, the following items are beneficial:
- What the completed work will look like
- Evaluation of final work – client’s approval
- Copyright ownership of the final work
- In what manner and for how long the product may be used without violating copyright authorization
- If a problem arises the manner in which either party can terminate the contract
The above clauses will provide you with coverage for a wide range of freelance work. Depending on the type of work, you may need to add additional clauses that pertain to your line of work. Photography is one such industry.
Photographer’s Freelance Contract
A photography contract needs to contain a complete outline of the job. It must include copyright and client expectations. This includes image licensing, which is what establishes the usage and rights regarding the images.
Under copyright law, the person that creates the photographs automatically owns copyright. For this reason, it is important the contract specifies who may use the image, the ways the images may be used, and the length of time the client has authorization for using the images.
There are also additional photography contracts that are important. This includes property releases, location releases, model releases, and stock contracts.
Revisions and Changes
Establish in the contract how any changes or revisions to the work the client may request. This is especially important in contracts for creative work such as writing and graphic design.
Specify what type of revisions or changes are acceptable, how many they can request, and if there is an additional charge for the changes. You should also specify that changes must be in writing with a signature.
Establish Business Hours
Include in the contract the hours you are available for business. Many clients assume if you are a freelancer you are available 24/7. Establish yourself as a business with fixed working hours.
You do not want clients calling you at midnight or making several calls a day. Include on a business card and the top of your contract your business hours. Point out to the client your preferred method of communication.
The termination clause sets forth the specifics under which either party may cancel the contract. There can be any number of reasons why a contract may need to suddenly cancel.
This clause may specify that notification of termination must be made in writing 30 days in advance. This allows you time to adjust to the loss of income or the client time to find another supplier.
Do I Need a Lawyer to Create My Contract?
A lawyer that is familiar with the legal process will provide you with a legally solid contract. In most freelance businesses you can create your own contract using samples that are available online.
You do want to make sure that the sample contract you use is from a reliable source and created in the state in which you do business. A good way to make sure you have your bases covered is to review your state and federal laws to make sure your contract contains all elements necessary to be legally enforceable.
Both you and the client need to sign the contract. This can be done in person or you can do it digitally. Digital signatures are now popular for solidifying contracts, especially when the business and client live in different geographic areas.
You can create or type your online signature for signing all online contracts. An online signature is not legally binding on its own, so you will also want to obtain e-signature software such as the tool by ApproveMe app. Once you create your signature you an store it on google drive, one drive, dropbox, or on your computer. You can also drag and drop it to use as your email signature, on social media, your website, and to other documents.
One thing to be cautious of as a freelancer is when a client provides a contract for your signature. Read these contracts completely to make sure there are no one-sided clauses that affect your ability to do business. For instance, a hidden clause that says you can no longer write for anyone else restricts your ability to do business, making you dependent solely on one client.
Show Your Professionalism
When doing freelance work presenting freelance contracts is an imperative portion of your business. Making sure you have proper clauses in your contract is insurance that your business will be able to successfully move forward.
There is a wide range of freelance work available in almost every area of business. We invite you to check out our other blogs and services for more helpful information.