Do You Need a Freelance Contract? (and Other Common Contract Questions)

Dec 15, 2020

Whether you’re brand new to freelancing or you’ve been at this for years, there’s a hefty amount of intimidating tasks and topics involved with doing your own thing.

How do taxes work? Is the IRS sitting in your driveway in an unmarked car? When should you invoice? What do different payment terms mean? Do you need a freelance contract with each of your clients? Wait…how do freelance contracts even work?

Are your palms sweaty? Yeah, mine too.

Those are big questions that deserve answers, but let’s zoom in on one of those subjects in particular: freelance contracts.

Here’s my usual friendly disclaimer: You probably already know that I’m not a lawyer, and I always recommend connecting with an actual attorney to get your legal questions answered.

However, I’ve been freelancing for years and have sent and signed my fair share of freelance contracts. Plus, I got to roll up my sleeves and learn a lot about legal language and clauses when I collaborated with a small business attorney to create the contract template in my freelance shop.

So, since my brain soaked up so much valuable knowledge during that process, I figured it was worth sharing some of that juicy information here.

That’s right—I’m answering some common questions I get about freelance contracts, including whether or not you need one (spoiler alert: you do) and what your contract should include.

1. Do you need a freelance contract for every single client and project?

Yes, you need one. Okay, you should have one.

Your contract spells out the “rules” that you and your clients need to abide by—from how much you’re getting paid to what they’re allowed to do with your work.

It’s a legally-binding document, and it holds way more water than your emails back and forth or a verbal agreement. So, trust me when I tell you that you want a signed contract between you and your freelance clients.

It ensures your expectations are aligned, and it ultimately protects both of you.

2. What should your freelance contract include?

I’ve seen freelance contracts run the gamut from a single page to dozens of pages. Some cover the nuts and bolts, while others attempt to dig into every possible scenario.

At a bare minimum, your freelance contract should include sections for:

  • Introduction: Basic information like you and your client’s names and the “starting date” for the contract

  • Services to be performed: What you’re doing for your client

  • Payment: How much and when you expect to be paid

  • Term of the agreement: When your agreement starts and ends

  • Independent contractor status: Establishes that you’re an independent contractor who will pay your own taxes and doesn’t expect benefits from your client

  • Intellectual property rights: How the client can use your work (we’ll dig into this a little more later)

  • Indemnification and limitation of liability: Essentially states who will be held harmless and what you will or won’t be “on the hook” for

  • Confidentiality: Defines what sensitive or proprietary information you or your client will keep your lips zipped about

  • Force Majeure: Establishes various unforeseen circumstances and how you and your client will respond to those with regard to your work

  • Termination of the agreement: What’s required of you or your client to end your contract

It sounds like a lot, but rest assured that most of these can be covered in a few quick sentences.

Many contracts also cover other things like business licenses, insurance, service locations, scheduling of time, and other miscellaneous items like rules for notices and dispute resolution.

Feeling overwhelmed? The contract template in my freelance shop includes each of these sections (and more). Plus, it comes with a companion guide that breaks down each section using simple terms and helpful examples.

callout for freelance contract template

3. When should you send your freelance contract?

Here’s the short answer: before you start any work for your client.

I’ve heard way too many horror stories about freelancers who invest a ton of time and work before they have a signed contract, and it comes back to bite them.

Set a rule for yourself (and your clients): no contract, no work..

4. If your client sends you a contract, should you also send them yours?

You have a standard contract you typically use with your freelance clients, but a new client you just brought on has sent you their contract that they use with all contractors.

What now? Do you sign their contract and then also send them your version? Do you refuse to sign theirs and insist that they sign yours?

I’ve had this happen numerous times—particularly with larger clients who work with a lot of freelancers. Their legal teams have a boilerplate template that they’re required to use with every single contractor.

Of course, how you choose to handle this is up to you. However, I usually do this: I review the contract they sent me carefully, request any changes that I want to be made, and then sign that revised version if I think it’s acceptable and reasonable.

I don’t also send the client my contract, because you can’t have two different contracts in place. The terms and conditions could conflict with each other, so you need one contract between you—whether you start with yours or theirs.

5. How does intellectual property in your freelance contract work?

Here’s another question I see come up frequently, particularly with creative freelancers who are producing work for their clients: Who actually owns the work you produce?

Well, it depends on what language you include in your contract. I typically see this approached one of two ways:

  1. Work for Hire: You transfer all rights to your work to your client. It’s as if they created it, and they’re free to do whatever they want with it.

  2. License: You own the work you produced, but you give your client a “hall pass” to use it. There are different types of licenses—like limited or unlimited and exclusive or non-exclusive—that stipulate who can use your work, as well as how and where it can be used.

In my experience, work for hire is the most common among freelancers. But, there are plenty of freelancers (like photographers, as one example) who use licenses with their clients as well.

6. Can your client ask for changes to your contract? And vice versa?

If your client reads through your contract carefully, they might have some questions or some language they want to be revised.

They’re well within their right to ask that—and it’s actually a positive thing, as it means they’re reviewing your contract to understand what’s required.

They’re free to request changes, but that doesn’t mean you have to make them. It’s up to you to determine what you’re comfortable with.

Similarly (as I alluded to above), you can request changes to a client’s contract too and they can decide if they’re willing to make those.

I think the contract process should be a collaborative one between you and your client. That’s when I’ve landed on the agreements that work best for both of us. So, don’t be afraid of a little back and forth.

What if you need to change your freelance contract after it’s been signed? For example, maybe you raised your rate with a recurring client and want that documented in your signed contract.

At that point, you’ll create an amendment. Uhh…what’s a contract amendment? It’s a separate document that spells out the revisions, additions, or subtractions from your original freelance contract.

The amendment will need to be signed by both you and your client, just like the contract was. Your email chain discussing your rate increase isn’t enough—you want the formal amendment.

7. What should you do if your client refuses to sign your contract?

You and your client have been back and forth about some contract changes, but you haven’t been able to settle on an agreement that works for both of you. As a result, they’re unwilling to sign the contract.

Uhh…now what?

Again, this a personal decision. But, my best advice would be to cut your losses and go your separate ways.

Especially if you think your contract is more than fair and reasonable to both of you, I’d take it as a major red flag that your potential client is putting up such a stink about that agreement.

8. Can you get out of a freelance contract?

You can. But here’s the important part: You need to follow the rules for termination that are spelled out in your contract.

Remember when we talked about the must-have sections in your freelance contract? Termination was one of those.

Your contract should explain what’s required to terminate the agreement. Does written notice need to be provided? Is that effective immediately or is a certain amount of notice required (like two weeks)?

If you need to end a contract with a client (hey, it happens), make sure you check that section and abide by those rules. Your client will need to do the same if they want to end the contract with you.

Contracts can feel scary, but they’re worthwhile

Freelance contracts can be overwhelming, and that makes them tempting to skip. After all, not having a signed contract isn’t really a problem until…well, something happens and you wish you had one.

I get it. Contracts can be a hassle, but they’re the best way you can protect your freelance business and they’re more than worthwhile.

Need some help? My freelance contract template was drafted by a small business attorney, and it comes with a helpful guide that breaks everything down for you (with examples). You can snag it right here.

Good luck, and enjoy that extra peace of mind!

callout for freelance contract template