Productivity7 min read

Freelance Contracts 101: Protect Your Business and Get Paid

Learn why contracts are essential for freelancers and what key clauses to include to protect yourself and ensure payment.

EC

Emily Chen

Business Coach · July 18, 2024

Why Every Freelancer Needs Contracts

A solid contract protects both you and your client. Never start work without one.

Essential Contract Elements

Basic Information

  • Your business name and contact
  • Client name and contact
  • Project description
  • Start and end dates
  • Scope of Work

  • Detailed deliverables
  • What's NOT included
  • Revision limits
  • Approval process
  • Payment Terms

  • Total project fee or hourly rate
  • Payment schedule
  • Accepted payment methods
  • Late payment penalties
  • Payment Protection Clauses

    Deposit Requirements

  • 25-50% upfront for new clients
  • Milestone payments for large projects
  • Final payment before delivery
  • Late Payment Terms

  • Grace period (typically 7-14 days)
  • Late fee percentage (1.5-2% monthly)
  • Work stoppage clause
  • Intellectual Property

    Work for Hire

  • Client owns all rights upon payment
  • Most common for client projects
  • License Agreement

  • You retain ownership
  • Client gets usage rights
  • Better for templates, stock work
  • Revision and Change Orders

    Revision Clauses

  • Number of included revisions
  • Cost of additional revisions
  • Timeline for feedback
  • Change Orders

  • Process for scope changes
  • How additional work is priced
  • Written approval required
  • Termination Clauses

    Kill Fee

  • Compensation if client cancels
  • Typically 25-50% of remaining value
  • Your Right to Terminate

  • Non-payment
  • Impossible requests
  • Abusive behavior
  • Red Flags to Watch For

  • Resistance to signing contracts
  • Requests to start before signing
  • Pressure to remove payment terms
  • Excessive liability clauses
  • Track all your contracts and client payments in one place with GigTracker.

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