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8 important clauses to include in a freelance contract
Freelancing is a tempting way to get out of the regular 9-to-5 job and work according to one’s flexibility. However, a freelancer should be very careful while taking up any freelance business or work and should make sure that they have a contract in place before starting the work. A freelance contract will help protect the freelancer and their hard work during any critical situation. For instance, if the client canceled the work at the last moment, and denied to pay for the completed work, then this can affect the freelancer’s business. To avoid such situations, it is better to take some time and sign a freelance contract before starting any work.
What is a freelance contract?
A freelance contract is a legal document signed between a freelancer (or an independent contractor) and a company or client who wants to avail of freelance services. The freelance contract explains the terms and conditions of the business relationship.
It is also known as an independent contractor agreement. This contract sets out all the terms of responsibilities and expectations between both parties over a certain project. With this contract in hand, the parties can be assured about the work and the timeframe under which it should be completed.
Do freelancers need a contract?
Yes, every freelancer should sign a contract with their new client before starting the work. An oral agreement may seem easier, but a written agreement has more value in the court. As well as when any disagreement happens between the freelancer and the client, a written contract will protect both parties.
For instance, if the freelancer has delivered the work on time and the client has denied paying for the work (normally referred to as nonpayment), in such cases, prior written consent can be used as a reference to question the client or take any legal action. In the same way, if the freelancer fails to provide certain services and is still demanding complete payment, in such situations, a client can take any legal advice with the contract in hand.
Apart from this, there are a few other benefits of having a freelance contract:
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Detailed information: A contract includes all the details about the project explained by the client and the services that the freelancer is going to provide.
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Payment terms: A freelance contract usually has a clear payment term and a pricing section. Under the pricing section, all the costs of the services are mentioned, and under the payment section, the day and date of payment are mentioned.
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Maintains confidentiality: The ultimate benefit of having a contract is that it guarantees the confidentiality of sensitive information that either party may be exposed to in due course of work.
What are the types of freelance contracts?
The best way to protect one’s business or work is through signing a contract before the freelance projects or retainer work begins. However, each type of freelance work has a different kind of contract. Below are a few majorly used freelance contracts:
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Letter of agreement: It is an informal variation of a freelance contract. Individual freelancers or small businesses mostly use it. However, it outlines the terms and conditions that are open for negotiations. It is mainly used between friends, co-workers, or someone close.
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Non-disclosure agreement: A nondisclosure agreement is usually signed when the clients don’t want the freelancer to give away any confidential information about the business to any third parties.
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Formal contract: A client provides this formal contract to the freelancer, especially when there is a scope for a long-term business relationship. This contract is legally vetted, and a freelancer must read and understand the terms and conditions before signing the contract.
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Non-compete agreement: In this type of contract, a freelancer has to agree that they will not go against the client’s business or compete with them during work. Sometimes, the duration might extend even after the work is finished.
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Statement of work: This contract outlines the major terms and conditions of a work arrangement such as what are services offered by the freelancer. It is not much detailed (or legalese), unlike the other formal contracts. It just gives clarity on the work arrangement between the freelancer and the client.
What should be included in a freelance contract?
Contracts protect both freelancers and clients against unforeseen situations. They reduce the room for misunderstandings between the parties. However, before signing a contract, it is essential to know about the major terms and conditions that are included in the contract:
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Scope of work: This term outlines the scope of the project. It defines what the project is, and what are the expectations of the clients. Sometimes, a client might also want to include some additional work like assigning some extra tasks or asking for certain add-ons; this is usually known as scope creep. It is always important to mention such additional tasks in a contract to avoid future confusion.
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Deliverables: This section outlines all the services, and warranties that the freelancer is providing the client within the promised time.
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Pricing and rates: Under this section, a freelancer should list out all pricing terms, such as what are the services and what is the cost per service.
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Payment terms: In this section, the freelancer and the client get clarity about the payment schedule, like what is the total amount for the work done, when the payment should be made, which payment method should be used, what can be done during a late payment, and whether there is any kind of advance payment the client should make while hiring the freelancer.
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Deadline: This element gives a clear picture of the deadlines under which the freelancer should provide the work. It also mentions the effective date of the contract and the end date of the contract.
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Termination clause: Under this term, the client and the freelancer get clarity about the termination policy. It mentions how a contract can be terminated, under which conditions it can be terminated, how to provide the written notice, and what will be the notice period for this.
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Ownership of intellectual property: This clause talks about the ownership of the intellectual property that the freelancer possesses. Unless it is mentioned in the contract, the intellectual property rights will remain intact with the freelancer.
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Miscellaneous: Here, all other important clauses and terms of this contract are included such as governing law (like under which laws of the state the contract is enforceable), severability, waiver, and force majeure clauses.
Why should freelancers use Revv?
Freelancing is a risky endeavor, having a contract in place will always protect the freelancer as well as the client. However, it can be too difficult to draft a contract whenever a potential client comes up. To prevent this type of situation and make contract signing easy, it is wise to use Revv’s document management system.
Benefits of using Revv:
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Revv has all the different types of freelance contract templates and all the templates are legally vetted, easy to customize, and comes with an in-built eSignature feature to close the deal in seconds.
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Now a freelancer doesn’t require to send a different invoice for their service. Using Revv, the freelancer can directly integrate the payment method into the freelance agreement template and connect it with their Stripe or PayPal account and send it to their client for payment.
Now, a freelancer can easily use such exciting features just by signing up in Revv!