Freelancing Fundamentals: Writing Contracts

Writing Contracts

As a freelancer, do you need to write contracts for your projects? Yes!

Every service vendor needs a contract, whether you’re a freelance web developer, a pest control guy, or a roofing company. At its simplest, a contract is an agreement between you and your customer that sets expectations for the work to be done and the payment to be received.

It doesn’t have to be lengthy or full of legalese, but it does need to exist for every project you engage in.

I’ve been at this for a while, and I’ve experienced the benefits that comes from taking time to craft client documentation. It’s a great way to protect the client-freelancer relationship because expectations and responsibilities are clear, on both sides.

Contracts offer mutual protection

The word ‘contract’ sounds a little detached and official if you don’t hear it often. At its core, though, a contract is a good thing. It’s a foundation for a positive project experience.

Look at it like this: A contract is just a project agreement that puts two promises in writing:

  1. The promise of service from you to your client
  2. The promise of payment from your client to you

Signing a contract starts your project off on solid footing because there are clear terms that make everyone on both sides of the table feel protected. Nothing scary about that, right?

Let your client set the tone

When it comes to the tone and language you adopt when creating a contract, vary your language according to the client and the project at hand. Let your early interactions with a client guide you, and make the contract “right-sized” according to them and the job that needs doing.

For instance, a contract you create to create a brochure website for a local mom-and-pop store would look very different from a contract you create to work with a Fortune 100 company.

Regardless of project size, you want to cover all the bases structurally with terms and deadlines and whatnot. When the situation calls for it, though, I think it’s okay to be a bit less formal with things.

Double-duty

Your website may already have certain legal language in place, such as a Terms of Service (TOS) or privacy policy. The contract you ink in association with a particular project is a natural extension of those things. In other words, you can re-use some of the language from your website in your contracts.

The formal contract vs. the ‘proposal with benefits’

Before we talk about the parts of a contract, here are a couple of alternatives to a strict, word-heavy document.

A Letter of Agreement is a basic list of deliverables and terms with a signature line for both parties. Think several categories with bulleted lists: Just the facts, ma’am.

Then there’s something I call a Proposal with Benefits: It’s a proposal at heart, but with closing language that mirrors a more formal contract. These are great when dealing with smaller projects because you save yourself (and the client) a step in getting the project underway. To create one, work up a proposal, and then spell out the terms just before the signature lines.

You can use this same document over and over as a sort of template for each new project. Know though that your contract requirements will shift over time as your business changes, so a periodic review should be part of your routine.

You’ll also encounter situations and learn things that will help you know what to include or omit in future versions of your contract.

[A contract is] not going to be perfect the first time or the 10th time you use it, but you can just keep iterating and learn from your mistakes and learn from close calls. — Karim Marucchi

Anytime there is a mistake or ‘close call,’ you should check and renew your contract template. When you make these changes, book another consult with your lawyer to keep your legal bases covered.

Don’t be your own lawyer

When you read that last sentence, did you think “I don’t need a lawyer!” Well, go ahead at your own risk.

Remember that we’re dealing with legally binding documentation here. Consult an attorney after you’ve drafted your work agreement. In most places, the fee to sit down with a lawyer and have your contract template reviewed is pretty modest … especially in comparison to the fees you’ll pay that same attorney if you’re getting sued.

An attorney will help you make sure your language and terms are airtight. They’ll also be able to suggest things that you are unaware of or may have overlooked.

Protect yourself: some ways to CYA

Excellent things to include in your contract template are notifications, warranties, limitation of liability, and exclusions. Those are pretty commonly known. I’ll talk about those shortly, but I also want to point out two beneficial things that Karim Marucchi and Rian Kinney discussed in ourdou OfficeHours episode on contracts:

Jurisdiction and Drafter’s rule.

Drafter’s Rule

Drafter’s rule is a legal concept that means if a contract goes to court, any ambiguity in dispute gets held against the party who drafted the document. To avoid being penalized, include something saying that both you and your client agree the contract itself won’t be construed against either one of you. This varies by jurisdiction, so check to see how it applies to your situation.

Jurisdiction Clause

Speaking of jurisdiction, let’s talk about home court rules. Including a jurisdiction clause offers you an advantage since it limits where you can be sued. It also means your local laws apply. If you have a solid Terms of Service (TOS) on your site, this is just reiteration at the contract stage.

Notice and Notifications Clause

A notice and notifications clause outlines what the responsibilities and processes are for communications if anything goes off the rails. This clause should reference things like who to contact, what means of contact, and what constitutes a proper notice.

Warranties

Your warranties section should cover the things you guarantee in conjunction with your work. It should also note how long your client has to walk a project back to you for tweaks, and what that entails in the way of communications and scope of any revisions. It’s also an excellent place to note the possibility of maintenance or long-term service contract for ongoing work.

If you work with open source software like WordPress, it’s especially important to outline that while you are selling the service of putting together the site, you are not responsible for core code.

Total Liability

A liabilities clause is brief but valuable: It says that if your client sues you for any reason relating to a project, then the total amount they sue you for can’t be more than the project cost.

Exclusions

A section for exclusions helps set expectations and manage scope creep before the work starts. It will tell what tasks you are expressly not delivering as part of the project requirements. If you’re open to tackling any of those things for an additional fee, you can mention that here as well.

“Plug and Play” Contract Templates

There are contract templates all over the internet that you can crib from, including some specific to your freelancing niche. A good plan is to look at several of these, then include the sections that most apply to your business.

Here’s an outline of some common parts of a freelance service contract:

  • The names of each party and their respective companies
  • Name and description of the project
  • The project term
    • Date you’ll start the work
    • Date you’ll complete work (remember to pad the delivery date to account for potential delays)
  • Project total and how you bill: “I bill twice a month.”
  • Project details
    • Deliverables: “Here’s what you’ll get from me.”
    • Exclusions: “Here’s what’s not part of this project.”
    • Milestones: “Here’s what will happen and when during this project.”
  • Terms
    • Warranties: The things you guarantee with your work, like conforming to the discussed expectations, not knowingly breaking any laws, etc.
    • Confidentiality/Nondisclosure: “Hey, what happens in the course of us working together is protected information.”
    • Notice and notifications
    • Ownership: Who owns the completed work (standard copyright) and how it’s transferred (for instance, you own it until they’ve paid up, then ownership rights are given to the client)
    • Authorship: This is the ability to claim the work as something you created, which is handy for things you want to feature in your portfolio or direct potential clients to privately
    • Termination: How to abandon the contract after it’s started and what it will cost (known as a “kill fee”)
    • Deposit amount
    • Payment terms: The dates and amounts for payment milestones
    • Fees for late payments
    • Revisions: How many you include, and the scope of those
    • Liabilities
    • Jurisdiction
    • Drafters Rule

The list isn’t comprehensive, but it’s a solid starting point.

If you’re a web designer or developer, the Contract Killer template is a good starting point. The tone is super casual. Earlier I talked about “right-sizing” the language so, depending on the client, this might be too casual. Use your best judgment!

Pro Tip: Give Contracts a Limited Shelf Life

This little detail has bitten more than one freelancer, so it deserves emphasis: Every project agreement you extend to a client should have an expiration date. That’s the date they’re expected to deliver the signed contract back to you before it requires revision, or just plain scrapping and starting over.

A document shouldn’t be hanging out there for weeks or months before a client acts on it. You want to make sure you have enough lead time to start the job. There are also all kinds of variables that could alter an open-ended contract over time, not the least of which are your rates and availability.

You don’t want someone coming back and “agreeing” to a contract you drafted a while back. Put a date on it!

Nearing the finish line

We’re close to wrapping this series on the key components of a freelance web development project. I’d love to hear your feedback on what I’ve covered so far. I’m discussing all these freelancing fundamentals with some of the brightest people in the industry on the OfficeHours podcast, too. I’ve had a lot of fun putting this season together. What have information have you found to be the most valuable or useful?”

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