Always get it in writing! It’s the golden rule of freelancing and the best way to make sure you start with clear expectations, stay protected, and most of all, get paid! But contract language is complicated and hard to interpret, and usually when one comes your way, you want to just sign it and send it off ASAP to get to the fun part (the creative project).
But have you ever asked yourself: What am I signing off on, exactly?
You should! Because what you create has value, and knowing it's worth will help you establish boundaries and expectations (and legal protections) that can safeguard your creative work and your time.
This guide breaks down the basics of reading contracts and offers suggestions for crafting your own.
Contracts vary but there are a few “must haves” that will be included in most contracts in some form or another, and are essential for freelance independent contractors to include when drawing up their own contracts to use.
We’ll break down each part of a typical independent contractor contract clause-by-clause so you can be fluent in “contract-ease.” This way, you can actually know what all that fine print really means when a company hands you a long, jargon-filled contract. It will help you negotiate better terms if you need to. And when dealing with clients and building your own contract, you can define your own rates, copyright protections, and project scope.
Title & Date - This may seem obvious, but start with a descriptive title that refers to the project or agreement (example: “Freelance Copywriting Agreement”), and a date.
Parties Involved & Working Relationships - Here you’ll want to put the full names of the parties involved in the project: you (or your company’s name if you have an LLC), the name of the company or client, also in full. Include contact information like email address, phone numbers, EIN numbers, and physical addresses, if needed.
Independent Contractor Terms - It’s also a good idea to define the roles each party is playing in the contract to make sure the client’s expectations for you and your work is different from being an employee. This can mean that, for example, the client doesn’t need to provide you with the tools to get the job done (that’s on you), but they don’t get to manage how you spend your time getting the job done. Some of these terms are negotiable and can be decided between the two parties, other things, like tax responsibilities, are not.
Description of Services - Start with a short description of the project, including your responsibilities required to complete the work. Here you’ll want to include project timelines and milestones, to make sure everyone (especially you!) stay on track. Be sure to capture the entire “scope” of what the work will entail–this avoids “scope creep,” which can happen when a project changes or grows beyond the initial agreement or deadlines. (For more freelance pitfalls you’ll want to avoid, check out our Quick Study here).
Deliverables - Here’s where you define the final products or services that will be delivered to the client and when. Include deadlines and the specifications of exactly how the product or service will be delivered in its final form (Example: 20 high-resolution photographs shared via Dropbox, 500 word copywriting article highlighting Carribean travel destinations, a fully functioning software product, etc).
Compensation - The rates, whether project-based, day rates, or hourly, should go here. Also include the terms of the payment (invoicing protocols, etc), method (Direct deposit? Paypal? Check?), and pay date. Also, if there is a portion of the payment you receive up front, and the rest when the project is finished, specify this as well.
“Upon completion” is too vague–make sure to include an actual date for what happens after you submit an invoice. Sometimes this is called a “Net 30”--a term describing the amount of time that the client has to submit payment for the invoice (usually 30 days, though this differs for some companies so always check what their payment policy is before including it in the contract).
Termination Clause - Sometimes things don’t go as planned; this clause guarantees that either party has the right to terminate if the relationship or project is not working. You can outline the terms for termination for either party, and in fact, you might want to specify a “kill fee” or cancellation fee if the project is terminated when there’s already been work done.
Limitation of Liability - In the simplest of terms, this clause outlines what each party is liable for. This clause is crucial for an independent contractor because it will limit the amount they are liable for if legal action occurs. Some of those liabilities include breaches of contract, misrepresentation and negligence, and infringements of intellectual property rights.
Indemnity - Indemnity is compensation paid by one party to another to cover any damages or losses should they occur. It’s basically a clause outlining who is liable for what. Which means it’s important to know what your risks are should the sh$t hit the fan, and sometimes clients will pile all the liability onto the contractor. What you want is what’s called “mutual indemnification,” which means no matter who broke the contract, neither party would assume 100% of the risk.
Governing Law - This clause confirms which regional law will ultimately govern the contract. So if you’re working with out-of-state clients, you should choose to have your own state’s laws to fall back on if something goes awry. The jurisdiction is defined as what court system will be used should the trial go to court. This clause is particularly useful to include for anyone doing business internationally.
Proprietary Clause: Ownership & Copyright - You never know how or where your creative work is going to “take off”—in which case, it’s in your best interest to protect your creative work. It’s important to know that by default you own the rights to your original work—EXCEPT when doing “work-for-hire” and signing a contract to that effect, in which case the person paying owns the rights, and you would have to specify your own terms and negotiate for them to be included in the contract.
Basically you have two choices: give the client full ownership over the work you do for them or give them a license to use the work for their purposes while you retain ownership. You want to make sure you are super clear in your license terms about where and when the work will be used, if the rights are exclusive to them, if you get royalties on the creative work in the future (and how much), and if and how they should credit you.
For even more specific advice about how to negotiate better terms on contracts for your original ideas, check out our Creativity At Work interview with the stellar Joleen Winther Hughes, founder of Hughes Media Law Group in Seattle.
It might also be worth your time to learn a bit more about IP (Intellectual Property) and the rights and restrictions creators have around it. To familiarize yourself with the terms, check out our glossary. For a deep dive into everything from IP, attributions, fair use, and licensing, read our How-To Guide, Intellectual Property And Copyright Cliff Notes, here.
Severability and Relief Clauses (OPTIONAL) - This may not apply to each situation, but when dealing with big companies you may come across a severability and/or a relief clause. A severability clause is just another piece of legal protection which states that if one part of the contract is made invalid in court, the other parts will remain intact and still be binding.
A relief clause, sometimes called an “Injunctive Relief for Breach” is a clause that allows the client to take legal action should the contractor break a part of the contract, for example, disclosing confidential information (see below).
Confidentiality Clause & Competition Clauses (OPTIONAL) - Again, you may not need to include this in your contract per se, but may see it in the contracts you come across. A confidentiality clause is used to protect a company’s trademarks and other information that belongs to them like customer lists, marketing analytics, and business plans.
In a confidentiality clause you may be forbidden from disclosing any and all of this information to a third party. You may also be asked to sign a separate agreement to this effect, known as an NDA (non-disclosure agreement).
Competition clauses are also something you may come across, which specifically will ask the contractor not to do business with other companies in a similar market. This obviously presents a huge problem for freelancers who work locally and/or in a specific industry. Luckily, in Washington State, non-compete laws for employees were overhauled in the state legislature, but may still be enforceable for freelance independent contractors “whose annual income exceeds the current year’s earnings thresholds of $101,390 and $253,475, respectively.”
Signature Block - This is it! You’ve reached the end of the contract. And the reward for reading it allllll the way through is that you get to sign it and make it official-like. Remember to also include a space for the date next to the signature line.
Yeah, we know. Reading and writing a contract is about as fun and creative as filing your taxes or tracking your income and expenses. But it’s a necessary part of safeguarding your time and creative work. Now you’ve got some understanding of what’s in a contract when it lands in your inbox, and the ability to start making your own for other clients if you need to. It will help you keep track of payments, work on your own terms, form mutually beneficial relationships with clients, and ultimately build your creative empire!