How to Write a Freelance Contract that Works for Employer and Freelancer‍

With more than half of all global workers now self-employed, freelancers are no longer the rare breed they once were. Along with the exponential rise of technology, more and more people are forging their own careers, working on their own terms, and going down the freelance route.

This means that if you have freelancers working for you or you’re thinking about taking them on, having a solid contract in place is vital.

We’re going to explore the benefits of having a freelancer contract, some tips on writing one, and best practices when putting it all together.

So if this is new to you, look no further. We’ve got you covered!

What is a freelancer contract and why is it important?

In a nutshell, a freelancer contract is a legally binding document that clearly sets out both parties' responsibilities to each other. It provides instant protection and peace of mind for all concerned. It gives both sides an opportunity to agree in advance about important specifics, like deliverables and payment.

For companies, a contract guarantees that the freelancer will fulfill their side of the working agreement. All timelines and conditions can also be made clear at the start, along with any policies that must be adhered to.

For freelancers, it ensures that whoever they’re working for will pay them an agreed amount within a specified timeframe for their services. As obvious as all this might be, it’s super important to lay this out in the beginning so both parties know where they stand.

So whether you’re an employer or a freelancer, having a contract in place from the start is crucial. A clear and well-written contract in plain language provides protection and security for all concerned and also helps build trust right from the get-go. If expectations and important terms are agreed upon by both sides, there will be less chance of any confusion or messy dispute further down the line.

This short guide will cover some of the main points in creating a contract that keeps you and your freelancers safe and on good terms—no pun intended!

Benefits of writing a freelance contract

Writing a freelance contract offers many benefits for everyone involved. Let’s explore them further.

It helps avoid misunderstandings

There are many remote freelance jobs available, so by clearly articulating both parties’ requirements and expectations, there will be less room for any confusion or misunderstanding. Working relationships can be severely damaged if all responsibilities aren’t made clear from the start. Eliminate misunderstandings by avoiding ambiguity and vague meaning in your wording.

It provides legal protection

A contract signed by both you and your freelancer forms a legally binding contract that can be used in a court of law. This demonstrates professional intent and can be useful if one side ends up breaching its terms by not delivering agreed-upon work or withholding payment for a completed project. Whatever kind of screening process you already have in place, a contract will provide the necessary legal protection for both parties. 

It sets the terms and conditions early

This is key, because by setting out the terms and conditions from the start, both you and your freelancer will know where you stand with regard to expectations and boundaries at work. By having you both clarify this, there will be less ambiguity moving forward.

Even if you’re using virtual onboarding and know that all of the terms and conditions will be stated during the induction process, it’s important for there to be a legally binding document that both parties have signed and can reference later on.

It helps you stay in compliance with labor laws

In many parts of the world, it’s illegal for a freelancer to undertake work without a proper contract in place. This is to ensure no one is exploited by way of withheld payments or unfair treatment. Stay on the right side of your country’s legal obligations by having a watertight contract in place from the start.

How to write a freelance contract

Now that you know the benefits of freelance contracts, let’s take a look at the steps you should take when writing one.

Introduce both parties to the agreement

It goes without saying, but a contract isn’t for the sole benefit of the employer. It’s in place for the freelancer, too. However you attract freelancers to your business, the contract should begin by introducing both parties to the agreement contained within, clearly stating who they are and how they relate to each other within the business.

Include a description of the work and service scope

It’s important to clearly lay out what the work entails as well as its inherent limits. For example, if you don’t cover the purpose of a project and the timeframe for completion, a phenomenon known as “scope creep” can come into play and damage your working relationship.

Will the freelancer be expected to use or take virtual phone calls when they’re not officially on duty? This might sound insignificant to some, but in an era when more people are working remotely, these specifics need to be firmly established.

Be clear about payment terms and refund policy

Be upfront about what you’ll be paying your freelancer and whether it’s a fixed rate, an hourly rate, or something else entirely. One of the main reasons people work is for money, so you don’t want there to be any vagueness here. Also, consider who’s responsible for expenses and if there’s any kind of refund policy or “kill fee” for canceled projects.

Include ownership rights 

You need to decide and clearly state who will own any work upon completion. Usually, it belongs to the freelancer until it’s paid for, but you should also consider your position on portfolios and licenses for future use. Additionally, if you use technology like web conferencing tools, it might be worth considering if any of the content from these is ever recorded and how it’s stored/deleted.

Agree on terms and when a contract can be terminated 

It’s crucial to define important terms so that everyone understands their legal obligations. Also, lay out the specifics around terminating a contract under certain circumstances. This will make it easier for both parties further down the line if the working relationship has to end prematurely for whatever reason. 

Non-disclosure and confidentiality

A non-disclosure agreement (NDA) is another important legally binding document that sets out the rules around confidentiality between you and your freelancer. For example, by signing an NDA, your freelancer might be legally prohibited from sharing any work or information (think strategies, client lists, or financial statements) about your business with any outside parties.

Best practices when drafting a freelance contract

We’ve covered some of the basics of how to write a freelance contract, but what about best practices when drafting one? Below, we’ll look into some things to keep in mind when creating an outline.

Be clear about your expectations

As previously mentioned, it’s vital that expectations are clearly stated within the contract. Without this, a freelancer may experience scope creep and, in extreme cases, feel exploited. It’s therefore paramount that things like start date and key responsibilities are listed in the final draft.

Also, remember that everyone has a preferred way of communicating, be it analytical or intuitive, so keep this in mind when drafting. And not all freelancers have the same background. Some might not have experience with newer technology, such as a business phone service.

So if there’s an expectation that this kind of communication method will be used, it’s important to make it clear upfront in case any additional training is required. 

Don’t undersell yourself 

We’ve already looked at the importance of expectations and specifics around pay, etc., and all of this needs to be considered when hiring freelancers. But don’t sell yourself short in any of these areas.

It’s vital that, from the start, you’re clear about what you want from your freelancers, and the contract is a document that will set the tone for your working relationship. So don’t undersell yourself; remember how you’ll be benefiting each other by working together, and let the contract reflect this.

Break work down into smaller deliverables for easy tracking

Consider chunking work down for your freelancers and reflecting this in the contract. It will make it easier for you to track their progress as well as make working life a bit more straightforward for them.

Big tasks and projects are more manageable if small, regular goals can be achieved while working toward a bigger whole. This neatly ties in with automating workflows, so if you’re already familiar with practices such as how to connect Gmail to Slack, this should make sense.

Write a freelance contract like a pro

So, as you can see, writing a freelance contract is fairly involved and, with all the legal ramifications, definitely not something to be taken lightly. Yes, it needs to benefit all parties, but it must also be watertight in the event of a failed working relationship. Granted, no one usually enters a new workplace with anything other than good intentions, but legal protection for both sides is vital if things go awry.

It might take some work and foresight to create something usable, but don’t forget that once it’s in place, it doesn’t require any more attention (unless it’s being updated). The main thing is to have something credible and legally binding for any new freelancer that comes along.

Just remember that you want a good, positive relationship with anyone who works for you and that everyone has a different communication style. You may want your freelancers to return in the future, so project an image and culture that’s both professional and welcoming.

Author Bio:

Grace Lau - Director of Growth Content, Dialpad

Grace Lau is the Director of Growth Content at Dialpad, an AI-powered cloud communication platform for better and easier team collaboration using cloud phones. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies, partnering with SEO and Ops teams to build and nurture content. Here is her LinkedIn.