Freelancing is a side-hustle picked up by the majority of the population to earn some on the go or to gain extra credits for college. But, while reaching for these credits, some of us fail to get the actual cash credit after our hard work. The loophole is that freelancers do not make their terms and conditions official, which leads to the employer collecting the result but not giving the deserving credits; hence it is essential to draw a contract always to maintain work on a professional level.
Since freelancers are on their own, obtaining legal help from authorities for a contract can be tricky. But don’t be intimidated, as we are here to help you draw up a single agreement. This blog shall review all the terms and conditions in a freelance contract and draw up a freelance contract template for download.
What is a Freelance Contract?
A freelance contract is a document between an employer and a freelancer outlining the terms of their working relationship. It establishes clear expectations between the client and contractor for a specific project over a specified period. This type of document is legally sound and ensures that everyone working on a given task follows the same service guidelines.
The contract protects both the company’s and the freelancer’s interests by clearly defining the scope of work and the general terms and conditions of the project. Even if a disagreement arises between the company and the freelancer, the contract serves as a legal guide for resolving such disputes.
General Terms included in the freelancer contract:
- Scope of Work
- Advance charges
Why Should Freelancers Have a Contract?
A contract will help you maintain a cordial relationship with your employer regarding your work and specify the roles and responsibilities of each party as evidence for extra work or extra charge. Both the employer and freelancer can agree to a fixed payment and conditions beforehand, so there is no disagreement and protect both parties from any misunderstandings. Since this is a legally binding contract, it is liable for court actions in case of a lawsuit.
Consequences of No Freelance Contract
If you are a freelancer or self-employed person, you may already know the importance of having a contract. Many people, however, argue that they don’t need one because they’ve never had a problem. Unfortunately, most freelancers don’t consider getting a contract until they encounter problems. Regardless of your previous experience, freelancers may face several potential issues if they disagree, such as:
- Loss of payment
- Loss of time
- Stolen work
- Monetary fine
- Legal expenses
- Company breach information lawsuit
Importance of Freelance Contract
A freelance contract has a variety of purposes and is drafted for the short term and long term. Even though a freelancer could have a contract, it would be an excellent suggestion to look at the points mentioned below to draft a valid agreement with no loopholes.
- Full names of the hiring company and freelancer
- Freelancer Role and Responsibilities – Effective freelance contracts specify what you will do for the client and when you will do it—the more specific and detailed your listing of the activities covered by the agreement, the better. Many freelancers experience scope creep, which occurs when the amount of work within a project increases without changing the budget or payment. You can add,
- Start date
- A detailed description of the project
- Deadline and contract end date
- Payment rate and schedule
- Payment Terms – After you have finished your project, the worst part is being paid less or not, so make sure you expressly point out the payment terms. Ask the below questions.
- Is the payment hourly or per word?
- Is the payment at the end of 30 days or after one project?
- Will you receive an early deposit?
- Project expenses and materials fees
- Invoice tracking
- Deadlines – Deadlines are more important for the freelancer than the employer as it helps us focus on the priority projects at hand and not slack off because of being on our own. Deadlines also allow employers to track their projects and update their clients.
- Ownership – Copyright clauses are complex and specific, so you can always gain a legal expert’s help. But it is essential to add this clause so the freelancer and employer agree on the project’s final rights. The employer can have the rights as they are paying you to create something, but then a freelancer can never advertise these projects in their resume due to copyrights. So make sure there is a specific dividend on ownership and rights.
- Confidentiality Agreement – One can hire a freelancer for many purposes, one of which could be the non-disclosure of company information. This information would mean nothing to an outsider. Still, a great deal to the employees in an organisation, so the employer has every right to add a non-disclosure clause to protect their information.
- Termination Terms – Inclusion of a termination clause or right to terminate in the contract establishes a procedure for terminating the freelance contract if the relationship is not working out. Throughout the contract, either party may recognise that things aren’t going as planned due to poor communication, missed deadlines, or other reasons. In this section, you can specify the grounds for termination and the costs or penalties associated with terminating the contract early.
- Indemnity Clause – If something goes wrong, Who can be held responsible? This clause shifts the responsibility to another party if one of the parties holds each other accountable for damage. Either both parties can reimburse it, or either party will indemnify the other.
- Party Signatures – Both parties must sign at the bottom of the contract with their full names and the date for the complete authenticity of the project.
These contracts are drafted by every other industry while hiring freelancers, so there is no specification of fieldwork. When getting a new project for personal security purposes, always ask or draft an agreement. A freelance contract is an integral part of starting and running a business, and without it, you risk losing your clients’ trust and business.