If you've been freelancing for any amount of time, you've probably heard how important it is to get your client agreements in writing. As a former freelance writer and now lawyer who works with freelancers, I won't tell you otherwise. It's not just that a good contract can protect you if a client relationship goes south – it's that a good contract helps avoid misunderstandings before they start. The very act of putting a contract together forces you and your client to articulate and clarify your expectations up front.
That said, some parts of a contract can be more important than others. Or at least they seem to come up more often in disputes. So, here's a list of contract provisions to be particularly vigilant about, along with some tips on how to navigate them.
1. The Scope of Work
The Scope of Work (or sometimes the "Statement of Work") is a common source of trouble for freelancers. This is the "what" of your agreement, where you describe what you'll do for your client. A vague or incomplete Scope of Work is a recipe for problems down the road, with the client claiming that your work doesn't meet their (ill-defined) specifications. So, be as specific as you can in your Scope of Work. Your client should know exactly what to expect from you before you start working.
2. Ownership of Work
Who actually owns that logo you're designing, you or your client? If you're a creative freelancer, your agreement should always spell out who owns your work product. Generally, you can go in one of two directions. One option is to "assign" (give) your client ownership of your work, in which case you have no further rights to it, including any control over how it is used. The other option is to grant your client a license to use the work in certain ways, in which case you retain ownership and control over its use. If you go with a license, then your contract should clearly lay out the license's terms. Depending on the type of work you're doing, you may want to specify where and how your work can be used and for what length of time. You'll want to say whether your client has permission to modify your work or create other works based on it ("derivative works"). You'll want to be clear on whether the client is required to attribute the work to you. If you expect to be paid royalties upon use or sale of the work, you should spell that out too. Also, be on the lookout for the phrases "work made for hire" or "work for hire." They are relevant only in certain situations, but where they apply, they give your client full ownership of your work under copyright law. Even where they don’t have any legal force, the presence of these phrases might signal that your client expects to own your work. If you do not agree, then the two of you should talk it out and modify the contract accordingly.
Clients often request changes even when you give them what they originally asked for. It's no fun to do additional work for no additional money. So state in your contract how many rounds of revisions, if any, are included in your fee. You can even specify what you will charge for additional rounds. And if you think there's any room for doubt in your client's mind about what constitutes a "round" or a "revision," spell out what those terms mean to you.
Few things cause more disruption in a freelancer's life than a client suddenly moving up a deadline. Make sure your contract states when your work is due. If your project is broken up into phases, assign a deadline to each phase. It can't hurt to say in the contract that if the scope of work changes, your deadline is also subject to change, and vice versa.
5. Payment Amount
File this one under "obvious," but you'd be surprised by how many contracts I've seen that don’t say how much the freelancer will be paid. You can be paid by the hour, by the project, or whatever other arrangement you and your client devise, but you have to be clear about it. For example, if you'll be paid "monthly," does that mean once per calendar month, or once every four weeks? Over the course of three or four months, those two interpretations will give you different results, so it's best not to leave the issue open to interpretation.
6. Payment Timing and Late Fees
"When" can be just as important as "how much." If you expect to be paid when you deliver your work, say so. If you'll be invoicing your client, agree on how much time they will have to pay the invoice. If you expect to be paid something in advance, say when and how much. It's often a good idea to include a late fee. This is not typically a lot of money – 1.5% interest per month on the overdue amount is common – but even a small fee can help give your client the psychological nudge they need to pay attention to the due date on an invoice.
7. Reimbursement of Expenses
Generally, as an independent contractor, you should be responsible for your own expenses, which you factor in to the price of your services. But if you expect your client to reimburse or directly pay any of your expenses, your contract should say so and state what they are. Also specify any advance approval or documentation requirements for expenses.
8. Early Termination
As you know, clients sometimes change their minds and cancel projects. If you've already started work and the client pulls the plug, you could suffer, especially if you're unable to find another customer for the work you've completed. In contract-speak this scenario is known as "early termination," and it's important that you and your client have a plan in place should it happen. You might agree that the client will pay you a pre-determined amount of money, sometimes called a "kill fee," if they terminate the agreement early. Or, maybe you agree that the client will pay you for the work you've completed as of the termination date, an amount that will have to be determined in the future. In any event, it's a good idea to make sure your contract provides that you will get paid for your partially completed work.
Knowing what issues and language to look out for in a contract can go a long way to making you a savvier freelancer. It's not the most fun part of freelancing, but putting in the time to nail down these issues up front can help you avoid serious misunderstandings down the road.
Editor's Note: Guest blogger Vinay Jain, an attorney and former freelance writer, is Head of Legal at Shake, a mobile application that allows you to create, sign, and send legally binding agreements in seconds. The above information is for educational and informational purposes only. Shake does not provide legal advice, is not a law firm, and is not a substitute for an attorney's advice. Please consult a licensed attorney in your area with specific legal questions or concerns.