Rules of Thumb for Drafting Your Freelancing Contract
Many new freelancers find limited resources and guidance in navigating the complexities of contracts.
While hiring a lawyer upfront might not always be feasible, understanding the essential elements of a freelance contract can significantly benefit you, especially when dealing with clients who prefer their own contracts.
So what kind of contract elements are essential in your freelancing contract?
To help you get started, here are some key elements to include in your freelance contract:
【 Duration of the Project 】
Clearly state the Start date and finish dates, and the start and finish time for work each day . In Construction, there are no such things as weekends, and projects are usually counted in days. If you are considering an engineering contract, make sure you define what business days are for you and your client.【 The Location of Your Project 】
If you’re being offered a HYBRID job, make sure you add your home or co-working space as one of the locations you’re allowed to work.
If you are specifically instructed to work Monday to Wednesday in the main office, and Thursday to Friday at home, you should write as such:Mon - Wed at XYZ office
Thu - Fri at (Address)
For REMOTE work, state the location is wherever you as a candidate internet access.【 Your Right to Terminate or Cancel 】
Termination is the ending of a contract based on the terms of the contract or applicable law. Cancellation, also known as rescission, is the act of setting aside a contract and restoring both parties to their original positions.
They are TWO different terms.
Termination can occur when a contract is no longer beneficial to either party, while cancellation can occur when one party breaches the contract.
The contract should include a termination or cancellation clause specifying the notice period required by either party to terminate or cancel the agreement. This clause should clearly state the number of days' notice that must be provided to the other party to allow them to find a replacement.【 Units for your Rates 】
Include Fees pertaining to (1)Travel Time, (2) Transport Fees, and related to (3) Pre-project time and consumable costs, and (4) Scope Creep.
Some optional fees include (1) Mail and Courier Fees (2) Consultation Time (3) Site Visits, or any potential or foreseeable costs.
The Contractor's fees shall be calculated as follows:
[Rate]: [Amount] per [unit of measurement]
Example: USD 100 per day per one-way trip from Location A to Location B
The specific units of measurement will depend on the nature of the Services provided. For example, if the Contractor is providing hourly consulting services, the unit of measurement would be "hour." If the Contractor is providing a fixed-price project, the unit of measurement might be "project."
【 Payment Methods 】
The contract should state the pay date and the payment methods for each cycle. They shall similar to the following:
The Client shall pay the Contractor in full for all Services rendered pursuant to this Agreement on the [Day] day of the [Month] following the month in which the Services are rendered. Payment shall be made via [payment method], such as direct bank transfer to the following account:
[Account Name]
[Account Number]
[Bank Name]
[Branch Address]
If the Client fails to make timely payment, the Contractor may charge a late fee of [percentage]% per day on the outstanding balance until payment is received in full.
【 Clauses that Define a Breach of Contract 】
The contract should include consequences if the following cases occur. Whether any penalty will occur.
Case 1: When Clients Don’t Pay or Don’t Pay on Time
Case 2: When they Terminate or Cancel the Contract Inappropriately
Case 3: When there’s a Breach of Contract
【 Force Majure Events 】
The contract must state what are considered force-majure events, and that there should be no penalties if the events occur.
【 Non-disclosure Clauses 】
The contract must state what are considered confidential documents or information, and that the clients have the duty to inform you of such, and what are the exceptions.
【 Non-Compete Clauses 】
If there’s a need to include a non-compete, then this MUST be in the contract.
【 Intellectual Property Ownership 】
The contract should state what documents, if any, when generated during the project, belong to which party.
【 Attachment Consistency with the Main Contract 】
Ensure the wording, numbers, and units in the main contract are congruent with the appendix. Any appendices or attachments can be enforced unless they’re stated otherwise in the contract.
In the event of a conflict between the main contract and the appendices, the main contract mainly takes precedence, but this is not always the case.
I've encountered numerous client contracts with flaws, even after they've been reviewed by their legal teams. Sometimes, clients may overlook the importance of carefully scrutinizing the terms and conditions, either due to a lack of basic legal knowledge or simply to expedite the process.
To avoid potential misunderstandings, take the initiative to review and clarify any ambiguous terms in the client's contract. Vagueness can lead to costly disputes later on.
Refuse the contract if you think the contract is too far from ideal.
Pro Tip: Create your own freelance contract template by incorporating elements from similar contracts you've encountered. This not only ensures you're covering all the essential bases but also provides a valuable resource if the client doesn't have a contract prepared.
By taking a proactive approach to contract review and having your own template ready, you can protect your interests and set the stage for a successful working relationship.
Collen’s YouTube offers additional advice ontop of what I just said, so go check her video out!
For my ENGLISH-speaking readers, you can go to Bonsai to get your templates, and
For my MANDARIN-speaking readers, you can go to Legalsign.ai for legal templates.
Good Luck!
