How would you like to work for free for the next 3 months? For the “client” to use all your hard work but for you not to get paid a dime for it? Well, it may not happen this year but sooner or later unless you have a freelance contract – it will.
Working without a freelance contract is stupid. The reasons you must have a freelance contract are as follows: it clarifies the expectations on both the client and the freelancer around what must be done and when it must be done and it provides some legal protection for you if your client thinks that they can get away without paying.
And yes, this applies even when you are freelancing in a different country from the client and also when the client is operating out of a country that you are not from. Contracts are ridiculously important in all freelancing circumstances and this is why:
You Need To Get Paid
I made the mistake of working without a contract once, early in my freelancing career. I developed a full training course for the client for an agreed cost of $6,000. They accepted all the work. Then, when it came time to pay up – they sent me $1,000 and told me they’d decided it wasn’t for them.
I know they used the work. I know they screwed me. But without a contract, proving the debt was always going to be more effort than it was worth.
It was an expensive lesson to learn. Fast forward 4 years. I’d been working with a client for nearly 3 years with a foundational contract in place when they decided that they no longer felt like working in line with our agreement.
The debt, this time, was nearly $10,000 but after a couple of weeks trying to bend over backward to salvage the relationship – it became clear that they were simply trying to wriggle out of payment. I called the client, read them the contractual clause, indicated that if it wasn’t paid, I’d be suing and issuing a copyright strike for all my work.
What happened? I was paid the next day.
This client wasn’t in my country or the country I was working in but they knew that my contract was solid.
I don’t like fighting with clients. I’d prefer it never had to go there but if it does – a written agreement makes it very clear where your responsibilities end and where their responsibility to pay begins.
Your Clients Need To Understand What You Will Do For Them
It is very easy to end up in a situation of “scope creep”. That is you thought your job was ABC and the client thinks it’s XYZ.
You don’t have a written agreement and thus you both think you understand what’s needed. Then you get to the end of the job and your client is angry and disappointed with what you have delivered.
You can head this off at the pass by describing, in detail, what exactly you will deliver and what the client’s responsibilities are.
When my $10,000 client was trying to wheedle out of things, they declared that “reviewing work precisely is not our job, you are supposed to do that” and they might have got away with it if it wasn’t for the fact that my contract says; “the client must review the documents provided and make specific feedback on any areas that they wish to have changed, this must be done in a timely fashion (1 week or less unless otherwise agreed in writing) and then the service provider will make amendments accordingly.”
No grey area there. You can’t send me a 100,000-word manuscript back and say “I don’t like some of it” (which is what they did) – you have to tell me what you don’t like, so I can fix it. That’s pretty reasonable, right?
And I know the client thought so when we started working together or they wouldn’t have signed the contract in the first place.
Your Clients Need Protection Too
On the flip side of bad clients, there are plenty of bad freelancers out there. God knows I’ve hired a few in my time. The worst of which took a salary for a year’s coding project and delivered absolutely nothing. My mistake, I should have written a stronger contract.
If you lay out, clearly, all expectations in writing between you and your client – your client gets to ensure that what they’re receiving is what they want and can reduce the risk that you’re not going to deliver what they need.
Given that clients are always going to have to assume some risk when they hire freelancers this can help set their minds at ease and let them know that they’re going in the right direction.
You can also help explain what happens to any intellectual property created under the contract. Does the client own it or are they licensing it?
Contracts aren’t just for freelancers, they’re for clients too.
You Can Identify What Happens When Things Go Badly Wrong
What happens if the client’s budget is canceled and they need to end the project early? A good contract specifies a kill-fee and a notice period for them to give you.
What happens if you get ill or find that you’re not the right person for the job? A good contract specifies how you can exit the contract fairly and how the client can proceed with anything that has already been provided.
You can also, and this is quite important, lay out what happens when they don’t pay. What are your late fees? When are things going to court? Which court system will you use (don’t assume that this will be in the country you choose – spell it out in your contract)?
Your contract can become a detailed reference point for the time when a business relationship breaks down and while you don’t want your relationships to break down, they often do even when you cannot explain why they have.
It’s better to clarify what happens up front than to try and negotiate when things have turned acrimonious between client and freelancer.
You Make Things Feel Professional
You can’t install a computer game nowadays without signing a contract (virtually speaking, of course). Every serious business out there uses contracts to explain what you get and what your risks are.
When you use a contract with a client, you make things feel professional. By establishing a professional footing for your relationship – you make it harder for a client to cheat you, after all, cheating someone who knows what they are doing may have consequences.
Also, you should treat any client who insists there’s no need for a contract as potential poison. They’re asking for a relationship in which you assume all the burden of risk. Why would you want to do that?
There’s no shortage of potential clients out there. You just need to learn to win them over.
You Can Agree On Additional Responsibilities
I write for a living. Many of my clients, however, don’t want my name on the material I produce – they want theirs on it.
They also expect me to keep my big mouth shut about that part of our relationship. This is especially true for clients who ask you to ghostwrite books for them. They pay for that service to position themselves as an expert in their field, if you talk about it – you kill their perceived expertise and transfer it to you.
Some clients insist on a non-compete. That is you can’t work for another client in the same specific field.
All of these details should be contractual and they all ought to be compensated. A non-compete, for example, prevents you from winning other easy business (you have expertise that is directly relevant to their competitors’ businesses, after all) – you should be paid to agree to it.
You also ought to agree on any specific warranties and indemnities as part of the contract too. That way there are no grey areas in the future.
What Else Do You Need To Know About Freelance Contracts?
OK, so now you know why you need a contract, this is what else you need to know:
- It doesn’t need to be a written contract. But it helps. It is much easier to defend and work with a client on a written contract than a verbal one.
- Contracts don’t prevent all pain. However, they do prevent a lot of pain. Some clients will still need taking to court but far fewer than if you hadn’t had a written contract.
- Keep the jargon to a minimum. The simpler you keep your contracts, the easier they are to enforce.
- You don’t need a lawyer to write a contract. Check out the Freelancer’s Union for a sample contract you can use. But if your billing is high enough – we’d recommend using a lawyer to make it airtight.
You always need a contract when you do freelance work. It protects you and it protects the client. It allows you to agree on the scope of work and deliverables, who does what and when, agree any additional responsibilities and helps get you paid and create a professional work relationship.
You can always use a contract to cover your freelance work even when you are a digital nomad working in a 3rd country apart from your home country and the client’s base country too.