Making sure you have an airtight contract in place before you start work for a client is important – perhaps the most important aspect of doing work as a freelancer. Without a contract in place you are leaving yourself open for a whole world of financial and legal hurt, and most freelancers learn this the hard way. But what should you include in a contract?
At its most basic level a contract should state what you are doing for the client and what they are doing for you in return. For example “I agree to build a website for company X, and company X agree to give me £1,000 for that service.”, however in reality contracts are a little more nuanced than that. Adding to the confusion, they are often written in terrible legalese and can require a specialist to ensure they are fit for purpose.
As well as the usual tomes of legal waffle, to protect yourself, your business and your client if things should go awry, you should consider including the following elements -
The scope of the project
Define precisely what services you will be providing in what time-frame. Failing to define your exact task can lead to clients trying to add extra work at the end of the original project, claiming it is within the scope of the contract.
Your requirements to complete the project
If you will be needing specialist equipment, usage of the company’s facilities or staff, make sure this is clear. Make sure it is clearly stated that failure by the client to accommodate your needs could result in the project being delivered late, over-budget or both.
Your status as a freelancer or outside contractor
This is the section that will help you avoid those pesky IR35 investigations. Make sure it is abundantly clear that you remain an independent entity, and not an employee of the client.
How much you expect to be paid
This can be in the form of an hourly rate, day rate, or an overall project cost. Again, make it clear that any hindrance on the part of the client could cause this cost to escalate.
How and when you expect to be paid
Most small freelance projects will be paid for upon completion, however if you entering into a big project you may wish to receive a percentage up-front, for example 50% upon acceptance of your proposal, and the remainder upon delivery. Large projects can also be paid for in stages, for example 20% after each of five pre-determined review dates. Speak to your client about how they would like to remunerate you and come to an agreement.
This section can also include late-payment penalties. It’s a good idea to establish these from the outset, both to protect yourself and to offer an incentive for the client to pay on-time.
Assignment of Intellectual Property
Many designers, developers or artists will include a clause that states the intellectual property ownership of all the works related to the project will remain with them until they have received full payment – this means that a client cannot start using your work until they have paid for it (and if they do, you can sue them!).
Rights for usage and resale
For the most part clients will want exclusive rights to your work, but very occasionally a project may call for a special licensing set-up.
Remember, you should always consult an expert if you wish to create a contract with specific, complex clauses. Although this could be costly, once you have a cast-iron contract in place you can use it as a blanket contract for all your clients.
To get you started our friends at QDos Consulting have provided some dummy contracts. Fully customisable for every unique scenario, these should help to keep all of your work (and cash) protected.
Anything else that should be included? Let us know in the comments.
Other related articles
- Guidance for employees retiring in 2013
- Disability Discrimination – what makes a worker disabled under the Equality Act 2010?
- Confusing times for the National Minimum Wage?
- Can a limited company contractor be in scope of the Agency Workers Regulations?
- Agency Workers have discrimination rights under the Agency Workers Regulations