The benefits of having a freelance contract in place

* Disclaimer: I’m not a lawyer and this post is not legal advice. This post is advisory, please do your homework and consult an actual lawyer before making legal decisions. *

I’ve made a new addition to the Freelance checklist, an item which should have been on the list from the start really:

Have both parties signed the contract?

It’s actually quite fitting this item was missed off the beginning of the checklist. It’s a step, especially in the freelance motion design world, that’s quite often not included in the start of a project.

In my view this needs to change, regardless of the project; whether you’re working for an agency, third party, or direct to your own client: get some form of contract in place from the start.

If you already trust the person you’re going into business with then that’s a massive plus, but I’d still recommend putting a contract in place anyway… Ultimately, the most trustworthy people will usually have no problem signing a contract, and if anyone does have a problem with it; then it’s a surefire sign that you need one.

Which contract should I use?

There are a few options for contracts out there, each with differing levels of complexity and legalese, they’ll also differ depending on where you are in the world. Again, if you’re unsure about anything please consult a lawyer.

In the UK there are a couple of potential options -

Motion Hatch has launched the freelance contract bundle specifically for motion designers which is available for UK and US freelancers.

Personally, I use Bonsai for my freelance contracts. It’s a service I wish was around years ago because it would’ve saved me a lot of grief! If you want to give it a try: <a href=”https://app.hellobonsai.com/invite/f43112a1” ‘ target=’_blank’>sign-up using my affiliate link and we’ll both get a month free.</a>

There’s plenty of reasons why you should have a contract in place, I won’t list them all, but here’s a couple of benefits I’ve found to be most useful:

Contracts offer added clarity for both sides

Having something both parties can refer back to is incredibly useful, not only if any problems occur throughout the process, but also for things like scope creep - a bane of many a designer. Having a contract that includes the scope of work would allow you to say:

“Regarding [the new feature], we can absolutely take a look at this, however it is something that may affect the timeline and budget agreed upon in the initial contract…”

It goes the other way too, the client has the ability to refer back to the contract and see what was agreed upon, a checklist for them to make sure they have everything they paid for.

Project costs, usage fees, expenses, and most importantly kill fees

A lot of freelancers, especially those new to the game, still feel incredibly self-conscious and awkward when discussing anything to do with money and invoices, even more so when something changes along the way. Having a contract in place that details the costs, and more importantly the potential additional costs, is incredibly valuable, and can help alleviate any awkwardness by giving you something to refer the client back to should anything unexpected arise.

Perhaps the key point, and one which I know a lot of freelancers have come up against, is the kill fee - or what happens if the project ends prematurely. It’s something that hit me a few times in the past, so much so I wrote about being unsure of what to do when a freelance job ends early.

I’ve unnecessarily eaten the cost of unused days and cancelled projects in the past simply because I didn’t have a plan in place, and felt uncomfortable asking for that money after the fact. Not only does a contract help detail what happens in these types of situations, it also gives you an additional confidence to refer back to it.

You can also set out who owns the project files, if they are available for purchase, and for how much. It’s much easier to discuss these things before the project has begun.

It can raise red flags before you’ve invested your time in the project

This is my absolute favourite reason for having a contract in place before work begins. In the process of signing a contract you can gain a glimpse into the future client relationship without the rose tinted spectacles that come with starting a new project.

I had a client push back on the late payment fee clause in my contract recently, immediately this start to ring the alarm bells - is this because they consistently pay late? I mentioned that this clause was non-negotiable and that the rate was standard; as advised by the UK government on late commercial payments. They accepted the clause, and I made a note to keep a watchful eye on payments and prepare for the potential of a late payment.

As another example, let’s say your contract details the payment terms for invoices - and you have this set to 15 days. If the client pushes back and says their standard terms are 30 days, fair enough, you may wish to negotiate on this, at the very least it highlights the point immediately and allows you to accommodate it. If, on the other hand, the client pushes back and says their standard terms are 60, or 90 days - this presents slightly more of an issue, can your cashflow handle this? Is this workable for you? If not, then you can have that conversation with the client and choose whether or not to continue with the project before you’ve invested your time in it.

Final thoughts

It’s important to realise that a contract isn’t a silver bullet that protects you against everything, chances are you’ll still run into problems. That being said, I find the added clarity that comes with having a signed contract in place is absolutely invaluable, the whole process broadens your communication with the client and can help prevent problems before they arise.

Remember, freelancing is a business, and if it’s perfectly acceptable for other businesses to insist on a contract — freelancing should be no different.