Are you a freelancer or a company interested in writing a contract to make an official bond? What is a freelance contract and how should it be written? Reading this guide can be helpful. From overview to writing tips, you’ll get all the knowledge in this guide.
You Are Aware That You Require an Agreement. What Do You Know?
- Maybe there was a problem with your last project; in this case, an agreement with a freelancer could have been beneficial
- You could be in the process of trying to get an exciting new job which is an important step for your company
- Maybe you’d like to look professional as an independent contractor to attract more clients
- No matter what the reasons, we’ve got it covered. In this short review focused on contracts, we’ll help you understand the meaning of a contract, why you require one, what should be included in it, and how to find one in a hurry.
What is a Freelance Contract?
The freelance agreement is a legally binding agreement you sign with your clients, defining the work you’ll perform and the amount they will pay you to complete it. Legally binding contracts consist of three basic components:
- There must be a desire to sign a legally binding agreement
- There must be a consensus between the two parties to sign a legally binding agreement
- There has to be an exchange of value in economic terms
If you accept to work for a business and they promise to pay for the work, then you’ve got an agreement. This agreement could be legally binding, but there are still issues for both your customer and you.
3 Benefits of Freelance Contracts
1. Pay and steady work
For those who have turned to freelance work after working in traditional jobs, the shock of being without a set salary can be brutal. It’s frightening not knowing exactly the amount you’ll earn every month and the next.
Retainer agreements with various clients provide some security to your freelance career and give you an approximate estimation of your monthly income every quarter. Furthermore, you won’t be required to search for new clients weekly.
2. Good relationships
The idea of a month-to-month (or every quarter) retainer increases the likelihood of building lasting relationships with only a few clients. You will get to know one the other over months or years.
This is different from projects that are only one-off in which you collaborate with a client for a few weeks and then never hear from them again.
A steady retainer job is ideal for freelancers who prefer stability and comfort, and for those who are shy or have social anxiety, meeting and getting to know new clients could be stressful.
The creation of retainer agreements is an excellent way to eliminate the need to constantly meet new individuals.
3. Client familiarity
Working with retainers builds relationships and can hugely benefit working processes and cash flow. If you collaborate with the same customers monthly for a long time, you become familiar with their business models and target markets. This helps you complete projects more quickly and with greater precision.
6 Simple Steps to Write the Freelance Contract
You’ll need to include a few things in your freelance agreement to increase the value of your contract. Even if an existing contract with your employer already covers you, it’s worth examining the list below to ensure you don’t miss any clauses worth mentioning in your contract.
1. Description of the work performed and the services provided
Setting a project’s scope within the contract is vital in establishing the expectations for the course of the project. Effective freelance contract outline what you’ll do for the client and at what time. The more precise you describe the tasks covered by the contract, the more effective it will be.
If you do not provide a detailed description of the work, most freelancers experience scope creep. The amount of work included in the project grows without change in the budget or the payment. Here are some things to think about when defining the scope of your project:
- Start date
- The payment rate and the schedule
- Deadline and contract deadline
- The scope of the service (detailed detail of the plan, as well as the milestones)
2. End-product ownership rights and licences
Freelancers typically add this clause to clarify who’s responsible for the work.
Because the client is paying you to complete this work in many cases, they’ll need the contract to provide them with all rights and ownership over every aspect of the work product.
If rights of ownership transfer over to the customer, they can choose what they wish to do with the work and how they intend to use it. However, in case you can retain ownership of a portion of your work, like proprietary software you created, it is necessary to define the rights of the customer and the terms of their use.
The usual practices for ending licensing and ownership rights are contingent on the kind of industry and work. For instance, freelance photographers are most likely to lease images, and freelance writers surrender all ownership rights to the customer.
3. Terms of payment
You’ll successfully complete a big part of the contract if you’ve performed all the duties listed as part of the definition of the work and services listed in the contract.
Nothing is more disappointing than not being paid immediately for work you performed after you have completed the project.
Therefore, it is essential to have a freelance contract that has specific terms for payment. This part of the contract may contain more details than an hourly or fixed fee.
4. Terms and Termination
Incorporating a clause for termination or the right to terminate the contract provides a procedure to end the freelance contract if the relationship isn’t performing.
Through the entire agreement, one of the parties could realise that the relationship isn’t working because of inadequate communication, missed deadlines or other reasons. In this section, you’ll define the reasons for termination and the costs or penalties incurred when you terminated the contract earlier.
5. Signatures of the Party
To create legal contracts, two parties must sign and agree to the contract. This is typically and easily proven by signing both parties to the contract. Therefore, ensure that both you and your client sign the contract before commencing your new project.
6. Competitive Engagements
Your uniqueness in your service must be present to customers if you’re a freelancer. The client may be averse to working on their behalf while assisting competitors. It could be the reverse in case you’ve worked with a customer in a different company located in a different geographical area of service.
We recommend you outline your strategy to deal with clients who may possess commercial or services that are in conflict. When you write the section on competitive engagements of your contract for freelance work, be aware of the following concerns.
- How can conflicts of interest be disclosed to clients with overlapping relationships?
- Do you intend to participate in any competitive activity or business with any service/business of the client?
- What is the length of the exclusivity? Does the contract permit you to work for competing companies after the work has been completed?
- Is the geographical area restriction for clients restricted to the same company?
Conclusion
When both parties are in the process with an expectation of the best outcome, A solid contract that clarifies the conditions of your agreement to your customer is among the most effective ways to safeguard your business in case of a dispute. A contract for freelance work is a crucial part of establishing and managing your business. Without it, you’ll be a victim of your clients’ distrust.
Also, Read;
