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To run a secure, reliable, and functioning freelance business, you need to work with contracts. Contracts act as a safety net for your business and clients. But what should you include in your contract? And do you have to sign one?

Most freelancers have a hard time drafting contracts for their businesses because they think that they cannot understand legal language or they might end up forgetting what’s included in the fine print. While it’s important to consult a lawyer when drafting this important document, you can understand everything about your contract. If you don’t know where to start, there are a lot of contract templates that will guide you throughout the process. In this post, we are going to share with you five crucial aspects of the freelancing contract. Let’s get started!

Defining a freelancing contract

A freelancing contract is an agreement between the client and the freelancer where they agree on the project to work on and deliver. The purpose of this document is to protect the freelancer and their clients. The freelancer gets a guarantee that they’ll receive money for the work that they complete successfully while the client or company gets a guarantee that they’ll receive the work on time. In case something goes wrong, this document can be used in court.

The key ingredients of a freelance contract

  • Contact information of both the client and freelancer
  • Deliverables
  • Legal terms
  • Timeline and deadlines
  • Signatures
  • Copyright or ownership
  • Payment schedule
  • Cancellation terms
  • Scope of the project
  • Any other aspect that affects the relationship

Do you need to sign the freelancer contract?

Every freelancer needs to sign their contracts. This contract is one of the most important documents for freelancers. While you and your client will discuss the terms virtually or through email, it’s important to have the details summarized and signed by both parties.

Important clauses in a freelancer contract

If you’ve been thinking of writing a freelancer contract, here are the most important clauses that you should include:

1. Work rates

Your freelancer contract should clearly state how your payment is calculated. Will you charge a specified sum for the entire project or on an hourly basis? Depending on the type of project that you’ll be working on, it might be better to be paid per project instead of on an hourly basis. However, it’s difficult to predict how long the project will take. In such cases, being paid on the hour will be good for you. At the end of the day, you want to ensure that you are getting adequate amount money for the work you will perform.

2. Payment schedule

You need to work with a particular payment schedule. When you are starting, it’s not a good idea to receive all the money at once. Most freelancers prefer using the 30/30/40 formula where they get paid three times as per the respective percentages. Others go for the 25/75 or 50/50 formula. Sometimes, asking for an upfront payment is beneficial because:

  • It helps you avoid clients that have no plan of paying you
  • Good for your cash flow especially if you are working on a long term project
  • Feedback from clients
  • Money to cover general expenses

While some clients won’t be happy about paying you upfront, you need to ensure that they understand your rules as early as possible to avoid inconveniences.

3. Deadlines and timeline

In general, every freelance contract has a starting date and a deadline. These dates help you break down the project into several manageable tasks and complete them at a specified schedule. The client usually benefits from the deadline clause too. You should always negotiate it with your client to find a ground that suits the two of you well.

4. Cancellation fee

If you are not so lucky to work well with a client, the contract clause known as the cancellation fee will save you from not getting every coin that you’ve earned. If the contract gets terminated for whatever reason, the client will be forced to compensate you for the time that you’ve invested in the project. The first deposit can be non-refundable together with any additional expenses for the work done.

5. Copyright

Finally, you need to ensure that the contract has a copyright and ownership section. This section will help in determining the person who owns the work. In general, it’s important to include a clause that retains the copyright of your work until you’ve completed the entire project. And your client will be obliged not to sell your piece to anyone. However, this clause should be beneficial to all the parties involved.


All freelancers need to invest some time in drafting a freelance contract. If this process intimidates you, you should consider hiring a lawyer. A freelancer contract will protect you in case of any event. As you probably know, life is full of unexpected events.

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