Whether you’re a sole trader or a growing start-up using remote workers, you’ll need a freelance contract. Depending on the nature of the work, freelance contracts can differ from one project to another. That said, there are several elements that most freelance agreements have in common. Discover what to include in your freelance contracts and why you need them.
Insert full names, contact information, and dates
The full names of both parties should appear at the beginning, and also throughout, any contract.
As a business, use your company’s full name and not preferred names. For example, if you represent tech giants Apple, you should use Apple Inc. when drawing up contracts.
Similarly, businesses should use the freelancer’s full name. If your freelancer’s name is Benjamin, use that name even if you know him personally as Ben or Benji.
It might seem like a chore, but being precise prevents confusion.
Be sure to include the contact information (physical and email addresses, phone numbers) for each party as well. Finally, make sure your contract is dated both when you create it, and when each party signs it.
Outline a description of Services
The description of services is the overview of the agreement between both parties. On one side is you, the company. On the other, the freelancer you’re employing.
You should use this part of the contract to outline the services you’re expecting the contractor to perform. For example, designing or translating several web pages.
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Add payment details
To avoid any misunderstanding, you’ll need to state clear payment terms, including the payment method, amount and dates. If you’re employing an overseas freelancer, indicate in which currency they’ll receive the payment.
You’ll need to state the rate you’ll be paying the freelancer too. Depending on the project, payment rates are usually set per hour, day or project.
If you’re paying the freelancer an upfront fee (usually between 25 and 50 per cent of the total payment), you’ll need to put this in the contract.
Include a reasonable timescale to make the payment after you receive an invoice. If your company financially compensates for late or delayed payments, add this information to your contract.
Include a deadline
Without deadlines, it can be easy for contract workers to lose focus.
Dividing jobs or projects into different sections and due dates is usually a more efficient way to manage freelance projects.
This way, you’re less likely to give your freelancer ‘that sinking feeling’, i.e. a situation where they have a considerable amount of work due in a short amount of time.
Setting deadlines also helps you plan and manage other activities involving your business.
Depending on the nature of the work, create a contract that affords you time to receive different drafts and provide relevant feedback.
Add an ownership clause
As the client, it’s common to get full rights to the work you’ve commissioned from a freelancer. However, you’ll need to put this on your freelancer contract to make it legally binding.
Let’s say you hire a freelancer to write product descriptions for your company.
Although the freelancer writes the descriptions, an ownership clause should state that your company owns the work’s intellectual property (IP).
Freelancers sometimes ask for accreditation for their work. Depending on the nature of the project, it’s up to your company to accept or decline such a request.
If you can’t give accreditation to the freelancer, you could offer a reasonable compromise. A glowing reference or LinkedIn endorsement could suit both parties and help maintain your working relationship.
Set freelancer terms
When employing a freelancer, you’ll usually have different expectations for their work than your full-time employees. And a good freelancer contract should reflect these differences.
For example, as a business, you may need to declare that your company:
- Will not provide the freelancer with equipment such as a laptop.
- Does not represent the freelancer in any way.
- Is not liable for the freelancer’s taxes.
When using a freelancer, you might need to share confidential information with them.
Details such as customer statistics might be highly sensitive for your company, so you’ll need a safeguard in place.
By adding a confidentiality clause, you’re preventing the freelancer from disclosing any information that you share with them.
Add a termination clause
The most common method of terminating a contract with a freelancer is to invoke the contract’s termination clause.
Most contracts, freelance contracts included, have a clause to end the contract early.
Notably, a termination clause protects both your company and the contractor.
As freelance contracts state both parties’ requirements and expectations, any breach of these terms could lead to either party choosing to end the contract early.