The first rule of being a freelancer is: always use a contract. That’s what every guide to being freelance tells you at least.
I wanted to find out if and how freelancers use them: do they get their clients to sign their contracts or is it the other way around? To find out, I set up a poll on Twitter and an identical version in the Freelance Heroes Facebook group.
1: Client signs my contract (58%)
2: I sign my client’s contract (10%)
3: I include my terms in my client’s contract (3%)
4: My client and I sign each other’s contracts (2%)
5: I don’t use a contract (27%)
Total respondents: 182
1: Client signs my contract (61%)
2: I sign my client’s contract (13%)
3: My client and I sign each other’s contracts (13%)
4: I don’t use a contract (13%)
Total respondents: 119
The majority of respondents in both polls use a contract, which is good news, but there is still a significant minority that do not.
Why do I care?
The question asked respondents who don’t use a contract to say why. I wanted to understand what the concerns about contract usage were and what blocks freelancers from using them.
I’ve been freelancing for a while now. It pains me to read about freelancers who have been exploited by unscrupulous clients. Fortunately, the number of clients that fall under that label is small, but they are out there!
Most of the freelance horror stories I’ve read would have been prevented, or resolved more easily, by having a solid contract in place. In the spirit of helping the freelance community, I thought it might be useful to summarise some of the reasons freelancers said they don’t use contracts and explain how a contract might help them.
It’s all covered in the emails
If you had to choose between using an email trail and a verbal agreement, you would choose the former, but it’s no replacement for a contract.
Aside from setting out the scope of work, the most significant aspects of a contract are:
1) Outlining the responsibilities of everyone who’s involved in the project
2) Explaining the procedures and what will happen should anything go wrong
If your email trail includes an agreement that covers all of the above, it’s not dissimilar from a contract. However, if your emails don’t include these clauses, you’re missing some of the key protections that a contract will provide.
It’s not worth the time to prepare one
On small jobs, it may not be worth the time to prepare a contract, but it comes down to how much risk you’re willing to take.
My contract preparation takes no longer than an hour in most cases and can be as little as 15–30 minutes if I don’t need to alter clauses.
The question to ask yourself is: how much time and work are you willing to lose? For a job taking an hour or two, a contract might not be worth it. But what about half a day or more?
I don’t want to put a potential client off
I have never had a client refuse to sign my contract. If they object, it’s an indication that they aren’t serious about the project and I would walk away from it.
Think about it from the client’s perspective. By the time you reach the point of signing a contract, the client has chosen to work with you after a considerable time investment. If your contract is reasonable, they have no reason not to sign.
It’s worth bearing in mind that a contract should offer protection and reassurance to the client as well. Using a contract also makes your offering more professional and shows you’re serious about what you do.
If you feel that clients may be intimidated, make sure you use a contract written in plain English. Andy Clarke’s open-source Contract Killer is a brilliant example of this.
I trust the people I’m working with / I’m such a pro nothing ever goes wrong!
These reasons fundamentally misunderstand what contracts are about. No–one enters a contract expecting things to go wrong, but very occasionally they do.
At this point, trust isn’t going to help you, but a contract will.
I’ve worked with the company before
This reason is related to the trust issue above, but there’s another potential factor: people move jobs.
The situation you want to avoid is this:
1) Someone you know at a company asks you to do some work
2) At some point, after you start work, your contact moves job
3) You submit an invoice and discover they no longer work there. Their replacement or manager won’t honour the original agreement
By stating that the signatory has the authority to agree on behalf of the company they represent, a contract can prevent this ever occurring.
I’m worried about missing something out
I didn’t start using a contract straight away because I was concerned about omitting a crucial element.
It’s better to have something in place that doesn’t cover every scenario, than not to have anything in place at all. Your contract will evolve as you gain more experience, so just put something together and start using it.
If you’re unsure where to start, either look for templates or ask to see other freelancer’s contracts. Groups like Freelance Heroes and professional bodies like IPSE or the FSB are great resources for getting started.
Want your professional indemnity insurer to help?
Hopefully, you won’t need to use your contract to resolve a conflict. If things go wrong and you need to involve your professional indemnity insurer for any reason, a contract can be beneficial.
Ashley Baxter, the founder of specialist freelance insurer With Jack, summed this up perfectly:
“Let’s say a client makes an accusation against you. Perhaps they're unhappy with the quality of work you've completed, or maybe they’re accusing you of not delivering the work that was negotiated in the scope or to an agreed timescale.
The first thing you need to do is get your insurer involved so they can provide legal advice and prevent the situation from escalating (don’t worry, the cost of the legal experts is included in your policy). The insurer is in a better position to help you if you can provide them with the contract that exists between you and your client.
The contract will clearly outline the duties that are to be of expected of both you and your client. This will strengthen your case when those duties come into question. Having a contract won’t stop a client from making a claim against you, but you’ll have a better chance of a positive outcome if you’ve got one in place.”
Contracts are a no–brainer for freelancers who are working with clients around the world.
Aside from your usual terms, it’s essential that the contract states that it is a legal document under the jurisdiction of your country. This will make it must easier to begin legal proceedings should you need to.
Clarity for your clients
Aside from the obvious advantages of using a contract, another benefit is that it provides clarity for your client on all sorts of potential pain points. Apart from payment terms and late fees, it can also cover a bit about your work process, meaning your client will know what to expect.
Your contract provides the perfect opportunity to set client expectations. It can be awkward to reset expectations mid–project if they haven’t been explicitly stated up front, so use your contract to reduce the number of difficult conversations you need to have.
A contract won’t prevent poor client behaviour, but it will help to protect you should anything go wrong.
I use one for every project I take on and, because my contract talks about my process as well as the legal stuff, they’ve become an integral part of my workflow.