10 Clauses to Include in a Freelancer Contract

If you’re a freelancer, It’s a mistake not to have a freelance work relationship without a contract. Contracts are in your and your client's best interests, and they offer many benefits. Two or more parties enter into a legally binding contract. They let you specify what you’re doing, how much it’s worth, and each party’s responsibilities. Some of the reasons to have a contract include:

What issues do freelancers face without a contract? 

If you’re a freelancer or self-employed, you already know it’s important to have a contract. Yet many say they don’t need one because they’ve never had problems. Unfortunately, most freelancers don’t consider having a contract until they have issues. Regardless of what your experiences have been in the past, freelancers can face many potential issues without a contract such as:

What clauses should be included in a freelance contract?

Every freelancer contract should include certain clauses to maximize its value. Even if you have an existing work contract, it may be worth reviewing the following list to ensure you don’t overlook any worthwhile contract clauses. 

This is not a comprehensive list of clauses every freelancer should include- I’m not a lawyer, and this is not intended as legal advice. The following are ten clauses freelancers should consider using in their freelance contracts: 

Description of work and services

Establishing the scope of a project is crucial to setting work expectations during the project. I learned this while working on a client's proofreading and data entry project. I proofread his document and put int he list of addresses he had, but then found out later that he also wanted envelopes printed out. He didn’t tell me this, and I wasn’t prepared to do it. 

I found a solution to this problem, but it could have been avoided if I had made sure to clarify the scope of the project from the start.  The more detailed and specific you can be when listing the activities covered in the contract, the better. Without a description of work, many freelancers experience scope creep, and the amount of work with the project increases without a change in budget or payment. Below are a few things to consider including in the project scope:

Payment terms

After you have completed all the tasks specified in the contract's description of work and services, you have completed a crucial part of the freelance contract. Nothing is more frustrating than not receiving prompt payment after completing a project. For this reason, you need to include detailed payment terms in your freelance contract. This agreement section can detail more than just your hourly or fixed-project rate. Below are questions to consider when adding payment terms to the contract:

Freelancers often include this clause to establish ownership of the work. Since the client is paying you to do the work, in most cases, they will require the work contract to grant them full rights and ownership of all aspects of the project deliverables. Clients can decide how to use your work if their ownership rights are transferred. 

You must establish the client's rights and usage terms if you own some work elements, such as the proprietary software you developed. Ownership rights and licenses for end products can vary by industry and type of work. Most freelance photographers share their images with clients, while most writers hand over all ownership rights to their clients.  This clause could also address portfolio display.

Get permission before including client work in your portfolio; establishing permission at the beginning of the project can simplify the conversation. There are many nuances to copyright law. Review your copyright clause and contract with a lawyer. 

Termination clauses

If the relationship isn't working, a termination clause provides a way to end it. Throughout the agreement, either party could recognize things aren't working out due to poor communication, missed deadlines, or any other reason. In this section, you can outline the grounds for termination and the expenses or penalties associated with ending the contract early. Freelancers consider this section vital even if there is a specific deadline and contract end date. It becomes even more vital with ongoing work because it provides both parties with the opportunity to prepare for the loss of income or work product.

Competitive engagements

As a freelancer, you must communicate to clients your services exclusivity. Your client may not want you to work with them while also helping the competition. In contrast, your experience working with a client in the same industry with a different geographic service area might be beneficial.  When working with clients that overlap services or business areas, it would be best to outline your policy. Here are some questions to consider when creating the competitive engagements section of your freelance contract:

Non-solicitation or non-compete provisions could limit your work with competitive businesses. It might be a good idea for you and your business to consult an attorney before agreeing to such a clause. 

Non-disclosure, right to disclose, and confidentiality

To protect both parties, it’s crucial to include a clause covering the mutual non-disclosure of any confidential information. As a freelancer, you may receive information about your client’s business that must remain private and confidential. Client lists, business strategies, proprietary processes, secret recipes, or financial information could be included. The client will protect confidential information. This clause may stand alone or it may need to be accompanied by a separate and more detailed nondisclosure agreement (NDA). NDAs are legally binding agreements establishing a confidential relationship and outlining how sensitive information will not be made available to competitors or others. 

Changes and revisions

Creativity is subjective. The number of revisions (if any) that the project will undergo is outlined in this clause. It can prevent freelancers from being overburdened with multiple rounds of time-consuming edits and changes. This contract section lets you specify the rate you will charge for additional edits or revisions. For all parties to be on the same page about changes to the project deliverables, it may be necessary to define what constitutes a “round,” “edit,” or “revision.“ 

Indemnity clause

Who is responsible for anything that goes wrong? Should the other party breach the contract, both parties will want reimbursement. Hold harmless provisions are clauses that transfer potential costs or responsibilities from one party to another if certain circumstances arise. 

The main benefit of an indemnity clause is that it can protect the indemnified party from losses or this party claims related to the contract or outcomes resulting from the work or deliverables of the contract. Both parties may agree to compensate the other party for losses caused by the indemnifying party's breach of contract when they enter a mutual indemnification agreement. 

General clauses

A general clause is a catch-all for any additional items added to the contract. Legal disclaimers, protections, and other statements can be included here. Contracts can include arbitration clauses, for example. Arbitration is an out-of-court process to settle disputes in which a neutral third party decides the matter. Most freelance projects end successfully, but disagreements and disputes can occasionally arise. Some freelance platforms, like Upwork, have dispute assistance programs to help freelancers and clients resolve these issues. They may have mediation and arbitration escalation processes to provide more options for resolving the issue fairly and impartially.

Signatures of both parties

For a contract to be legally binding, both parties must agree. It is most commonly and easily demonstrated by having both parties sign the contract. Before beginning your next project, ensure you and the client sign the document.

While both parties expect the transaction to proceed positively, a solid contract that spells out your agreement with your client is essential for protecting your business if a dispute arises. A freelance contract is essential to building and running a freelance business. Without it, you can lose your client's trust and their business.