The first thing to consider when formulating a contract for a new freelance client is to make sure the contract can be defended in a court of law. There are six criteria that the contract must meet according to the United States legal system.
- First, each of the parties involved must be real and able to enter into a formal contract—so that means they must be of sound mind, exist in the real world, and be of legal age at a bare minimum.
- Second, all the parties involved must be clearly identified by their correct and legal names or identifiers.
- Third, a product or a service must be offered by one or more of the parties.
- Fourth, some sort of consideration or benefit must be offered in response to said offer of a service or product.
- Fifth, the transaction must be completed within a certain time frame.
- Sixth, the nature of the service provided, the benefit offered, or the parties involved cannot involve illegal or fraudulent activity and both parties must, in fact, agree to the terms.
There is nothing in this criteria that says the contract must be written. Legally speaking, a verbal contract is just as binding if it meets the above criteria.
Now that you know what goes into a general contract, the next step is to consider what you need in a freelance contract. The best way to do this is to take each six requirements and consider what you should do if things go wrong.
Identification of the parties involved
This is perhaps one of the simplest criteria to meet. Most freelance contracts say something to the effect of:
I, [name of freelancer] of [name of your company], located at [company address] hereby enter into a formal contract with [Client Representative’s Name] of [Client Company] located at [Client Company Address].
Offer of a service or product
This section is where you describe exactly what you are going to provide to your client. It is a good idea to be specific as you can based on the details of the job. For example, let’s say that a client wanted me to produce a sixty-thousand word manuscript based on his research into the effects of overpopulation on elephant seals. Here’s how that portion of the contract might look:
One manuscript, not to exceed 60,000 words in length with the working title of The Effects of Overpopulation on Elephant Seals, based only on the research provided by the Client will be submitted to the Client in a time frame as outlined in the Schedule section of this Contract. The manuscript is expected to have a total of twelve (12) chapters. The Writer will offer a total of four (4) revisions at the discretion of the Client at no additional cost. If the Client requires five or more revisions, additional compensation as outlined in the Payment and Consideration section will be provided for each occurrence. Once full payment is received and verified, the Writer agrees to transfer all publication, authorship, and copyright considerations to the Client.
Consideration or payments for service or product
This is the section where you want to provide details concerning the payment for your product or service. Once again, it pays to be specific.
Provide details about:
- how you will receive payment;
- how you will invoice the client;
- who you will invoice if the person is different from the client representative; and
- the nature of the payment scheduling.
Will you accept a single lump sum at the end of the project, or will you get paid in installments? Also, how will you handle late payments?
Let’s look at our fictitious contract about overpopulation and elephant seals:
The Writer will invoice the Client via electronic mail to the Client’s designated representative at the completion and approval of every three chapters of the project. Each invoice will include approximately 25% of the total cost, and the total amount paid per invoice will be deducted from the final cost of the completed project. The Client agrees that all payment will be in the form of electronic funds transfer, and the full amount of each invoice will be provided within 15 business days of the date of the invoice. Invoices paid in excess of 20 business days of the invoice will be assessed an additional 10% late fee for every thirty days outstanding. No refunds on received and verified payments will be provided. In addition, the Writer understands that no additional financial or material considerations, or assurances of further employment will be offered to the Writer once the final payment is received.
Schedule of payment
This is where you describe when you are going to provide the service or product that the client has agreed to pay you for. Once again, it is important to be specific. One trick I’ve learned is to figure out how long it would take you to complete the project and then triple that amount. It’s a good way to make sure you have the scheduling cushion that you need.
What should happen if things go wrong?
This is one of the most important parts of the contract. Things will go wrong with a client. When it does, it pays to have how it will be handled described specifically.
In most cases there are three ways to deal with a problem: litigation, dissolution and arbitration.
- Litigation means that one party takes the other party to court.
- Arbitration means that a third party mediator is utilized to negotiate a compromised between the interested parties.
- Dissolution means that the parties walk away from the contract, and agree to pay for services rendered and to keep confidentiality.
Here are two examples: one of dissolution, and arbitration—my two preferred methods.
Cancellation of Contract:
The Client shall have, at his discretion, the opportunity to dissolve the contract at any time with 15 days notice, and will be obligated to pay any outstanding invoices within 15 days of the invoice date or the date of the effective dissolution date, whichever is earlier. All copyrights, usage rights, and publication rights to work competed but not approved and invoiced will be retained by the Writer until payment or other consideration for said product or service is provided by the Client.
All claims and disputes arising under or relating to this contract are to be settled by a binding arbitration in the state of Illinois, United States. An award of arbitration may be confirmed in a court of competent jurisdiction.
If you choose arbitration, make sure you and the client agree upon the state. Sometime it’s your state, sometimes it is not, so be prepared to travel if necessary.
A contract for a freelance project can be as complicated or as simple as you want. Beyond having an attorney give your contract a once over—which I highly recommend, other great resources include the American Bar Association and Nolo-Law.
About the author:
Born just outside of Pittsburgh, Pennsylvania to an industrious lower middle class family, Laura Seeber has been putting pen to paper or fingers to keyboard for most of her life. It was quite by accident that she discovered in 2004 that her love of writing and telling stories could be transformed into a way to make a living.
Beyond establishing herself as a talented and versatile ghostwriter and writer and owner of The Writer’s Thread, Laura also owns an environmental company and lives with her husband Michael in the state of Illinois.