• Manojna Yeluri

Freelancer Contracts 101: A Primer to Understanding the Essentials


tl;dr

Contracts may seem intimidating, especially if you're freelancing, but this post serves as a primer to understand some of the more essential clauses and legal language. Inside are examples of clauses and some helpful tricks we've called Pro Tips (with the following icon)

As a freelance creative professional, drafting and reviewing paperwork (more specifically a contract) can feel quite intimidating and cumbersome. Different professional commitments will require different kinds of contracts, but it doesn’t hurt to have a working knowledge of the rights and clauses that go into them, especially since there are a lot of elements that remain common to these various agreements. When in doubt, it’s always advisable to seek legal counsel although the best contracts are the ones that are precise and clear, created to provide clarity to everyone who signs them.


It might help to know that a contract, though seemingly full of complicated language and tricky clauses, is at its simplest (and best form), an expression of a promise – it’s a mutually agreed upon set of terms and conditions, capturing the essence of a promise between two (or more) people. A contract by itself isn’t anything better or worse than than the people, project and professional obligations it seeks to pull together into one consolidated, neat document. It’s really just a tool – whether it’s good or bad, depends largely on whether you believe it adequately protects your interests or not.


The Purpose of a Contract

The ultimate intention behind any contract or agreement is to have in place a clear and easily understood set of obligations, terms and details – the building blocks of a conditional promise that is intended to be fulfilled. A contract need not be complicated, convoluted or lengthy to be a good contract – it does however, have to be understood clearly by everyone signing it.


So even before sitting down to write or read a contract make sure that you have:

  1. A clear sense of the project or relationship between yourself and the other party or parties signing the contract; 

  2. An idea of what you hold dear as professional values;

  3. Clarity on what you expect to receive and give as a part of the professional relationship you’re entering into; 

  4. A general idea of what others in your chosen profession consider standard and acceptable terms;

  5. A good idea of what you’re willing to do if things don’t work out

A contract, no matter what business purposes it’s intended for, ought to reflect and capture the above mentioned points by way of its clauses, representations, obligations and warranties. Think of your responses to the above five prompts as guideposts to help you check-in with your intuition and goals as a creative professional and freelancer. If something doesn’t sit well with you either because you don’t understand or agree with the language in the contract, consider it a sign to pause, seek guidance and clarity.


The Essential Clauses

As a general rule, when looking into a freelancer contract, here are the most important things for you to review or include:

1. Names, dates and details of the parties 

2. Scope and Deliverables

3. Term and Duration

4. Consideration and Reimbursements

5. Intellectual property rights and Ownership

6. Permissions and Other requests

7. Representations and Warranties

8.. Confidentiality

9. Indemnification

10. Force Majeure

11. Termination and Dispute Resolution


Almost every contract will have some variation of these terms, but of course the devil is in the details which is why it’s incredibly important to understand what each of these categories or clauses might actually be saying. Breaking each of these down further;


1. Names, dates and details of the parties

Getting the names right feels like an obvious place to start with a contract. Spellings aside, the real importance of this clause lies in the fact that everyone is clear who they are doing business with. So for example, if you’re being engaged to carry out some freelance design work for a company specialising in renting out medical equipment, be sure to include the registered name of the company and not just its brand name. Alternatively, if the contract is between you and an individual client, then ensure that their name and details have been properly captured. 


It’s also important to make sure the contract has the right date. Sometimes a contract will be signed on one date, but will come into force or effect on a different date – what the contract will call an “Effective Date”. Pay attention to these dates because many of your obligations, deliverables and the term of your engagement will depend on these details.

For illustrative purposes only

2. Scope and Deliverables


The scope is the meatier part of the agreement, and in many ways the clause that sets the tone for the rest of your agreement and your professional engagement. Clearly articulating the scope of your professional engagement is key to avoiding confusion at a later date, especially after you’ve started putting in the work. When defining the scope of the agreement, it’s good to think about:

  1. The exact tasks and deliverables expected from you;

  2. The services and obligations that you will be providing in order to complete the tasks and project; 

  3. What you will not be providing for the agreed upon terms of this arrangement.

Everything in this clause will end up tying into other details like the term, the payment, ownership, permissions and even termination, which is why it’s useful to think of it like the tree trunk, with all the other details branching out from this.

Pro Tip: Being precise with the scope and the deliverables offers you the opportunity to be very clear about what you’re willing to commit to and what additional services you will be charging extra for. For example;

  • By clearly stating that the scope of this agreement only extends to your being engaged to mix and master three songs on your client’s EP, allows you the opportunity to negotiate an extra fee should your client decide to include a fourth track in the EP; OR

  • By clearly stating that the scope of this agreement only extends to creating an illustrated portrait based on a picture with a maximum of three revisions, allows you to charge an additional fee for extra revisions suggested by your client; OR

  • By clearly stating that the scope of this agreement only extends to creating a voice-over recording for a project that will include 10 hours of your time at the studio and only during reasonable business hours, allows you the opportunity to negotiate and ask to be paid for additional hours as well as to maintain your availability during certain times of the day that may be considered reasonable.

3. Term and Duration


The term of your contract will dictate the length and duration i.e number of weeks, months or years of your professional engagement, and more importantly when it legally commences and ends. Some contracts state that the term of the contract commences on the date it has been signed by all parties, while others may offer an alternative date (as was mentioned earlier). When you’re a freelance creative professional, it helps to be sure about the term of your engagement because this will allow you to understand;


a) The overall timeline of the project or engagement;

b) How long you will be held accountable for the terms of the engagement; and

c) How to frame your delivery schedule, while corresponding it to your payment disbursement schedule and milestones.


4. Consideration and Reimbursements


As you might have guessed, the consideration clause is the money clause and where you ought to be explaining and stating your charges. You don’t have to go into great detail on the breakdown of your fee, unless of course that’s your or your client’s preference. What you do have to include though is your total fee and then the milestone disbursements your fee can be divided into (so that you’re paid for every deliverable you turn in ensuring you’re better protected).


If there are additional expenses that you will be incurring (printing costs, travel and food costs, software licensing fees) towards the project, this is where you need to include them. Just make sure to state that your fee is not inclusive of additional expenses or out-of-pocket expenses.


Pro Tip: Always insist on a non-refundable advance before you commence work. Make sure that it’s mentioned clearly in your contract. It's also a good idea to add a time limit by which time your client must clear pending dues,

failing which would result in the imposition of an additional late fee.


5. Intellectual property rights and ownership


Whether you’re a writer, performer, artist, illustrator, musician, producer or [please insert creative profession of choice], working as a freelancer implies that you’re probably working independently and not in the continuous employment of a client or company. Even if you are working on a long term basis, it’s more likely that your relationship with the client is that of a consultant or a contractor, rather than that of an employee. If that’s the case, it’s important to understand whether you’re “working-for-hire” or not because this can have a big impact on your rights as an author/creator of your work.


When you work for hire, you acknowledge that you’re okay with not being considered the legal author of the work. In simple terms, this means that from the get-go, you have no copyright in the work you’ve created. In the alternative, your client will require you to assign or transfer all your rights in the work to them, making them the sole rights owner.


Understanding the nuances of intellectual property can be a bit tricky, and it’s advisable to consult with a legal professional if that’s possible and if you believe that the project you are working on merits a quick discussion. The decision you make can spell the difference between having worked as a one-time contributor or creator of a project, and having access to a revenue stream that’s based on the work you’ve helped create. Getting clear on your rights and ownership can also ensure that you are credited for your work – something that is better clearly articulated, than assumed.


Pro Tip: A big challenge facing most freelance creative professionals is

non-payment or delayed payment for their services. This can be especially frustrating when the final deliverable has been handed over to the client.

At times like these, it might be a useful trick to know that unless the transaction is complete and you haven’t signed over your rights in the work as is formally required in your contract, technically your client has no right to use the work. Not until they’ve paid for it that is. For example;

  • If you have yet to receive the final payment for the original composition you have written and recorded for your client, you could state that pending full payment, nothing stops you from doing whatever you please with the music including releasing it as your own; OR

  • If you have not received full and final payment for the brand work and logo commissioned by your client, they are not entitled to use this work because technically they don’t yet own it

It’s true that this sounds like holding them at ransom, but with the only other option being legal action, this might be a possible way to assert what is rightfully yours to claim.


6. Permissions and other requests


Besides intellectual property ownership and determining the kind of monetization model you’d like to opt for (selling or licensing your rights for instance), there are several other permissions and requests that you might have to clearly articulate in your agreement.

These include things like;

  • The permission to include the finished work in your professional portfolio (Portfolio Rights), or 

  • The right to use the work in your own promotional videos and content in brochures, websites or other specified formats (Promotional Purposes), or

  • The permission to include the work in your own social media and to showcase this as a part of your own work (Social Media Purposes)

The golden rule again is to clearly articulate and ask for these permissions, rather than assume that your client is comfortable with your intentions to use this work for purposes besides those intended by the agreement.


7. Representations and Warranties


When entering into an agreement, there are certain presumptions made with respect to the validity of the agreement’s terms and the obligations that have to be carried out because of it. Capturing these presumptions and holding the parties to the agreement accountable towards them, is the simplest way to describe what is intended by a contract’s ‘Representations and Warranties’ clause.


Representations are essentially factual statements that each party makes to each other and represents as true. For example, that each party entering into the contract is actually permitted by law and of age to do so. If something is proven later to be false, then this would amount to an instance of misrepresentation.


Warranties are future oriented statements that each party holds the other accountable to. For example, statements like how the client agrees to adhere by the timelines and disburse payments regularly. If a warranty gets omitted or wrongly implemented, then that could potentially result in the termination of the contract in the name of what is known as breach of contract.


Pro Tip: From the perspective of a freelance creative professional, you can use this section smartly by introducing the obligations you’d like your client to be mindful of. Things like;

  • Adhering to timelines particularly payment disbursements; or

  • Being available during reasonable business hours for discussions on revisions or inputs they have requested;

It’s also a good way to introduce language that relates to creating working 

relationships and work spaces that are safe and comfortable. As a freelancer, you won’t have the same rights that an employee would, especially with respect to several things that broadly fall under headings like the prevention of sexual harassment, occupational safety and health. This might be one way of expanding and including these considerations.


8. Confidentiality


This clause reaffirms the confidential and sensitive nature of some information that may be exchanged between you and the other party, during the course of working together. This could include anything from proprietary information and software, to business practices and strategies, and sketches, blue prints, stem files and research that is deemed private and confidential.

For illustrative purposes only

9. Indemnification


With a name like that, this clause is bound to seem a bit daunting although indemnification is really quite a simple concept. Meant to be a safeguard against the damage or losses caused due to a third party seeking to sue, indemnification basically ensures that the blame falls to the right party in the agreement. So for example, if say a third party creative studio decides to sue a production house (for which you did some specific freelance work) for copyright infringement and it turns out that your inadequate research prompted the creation of infringing or plagiarised material, the production house will be sure to ascribe blame to you and claim a reimbursement of their legal fees and damages from you.

For illustrative purposes only

10. Force Majeure


Force Majeure clauses have become a fan favourite of sorts, due to the ongoing pandemic which resulted in the termination of a multitude of contracts in the art, music, entertainment and creative industries. Put simply, the clause essentially states that for reasons that squarely fall beyond the scope of reasonable foresight or control – like floods, earthquakes, political and civil unrest – the terms of the contract can stand suspended and may later be terminated, with neither party having to compensate the other for the termination. A staple in most agreements, the force majeure clause came into the limelight again at the onset of the global lockdown in March 2020 – you can read more about the clause in one of our earlier posts, should you like to have a more contextual understanding.

For illustrative purposes only

11. Termination and Dispute Resolution


As a freelancer, it’s just as important to know your rights in the event of things not working out. Can you retain the rights over the work you’ve completed? What triggers an early termination of the agreement and in such case, will there arise the need to compensate the other party? If you do wish to seek further clarification or legal action, does the agreement oblige you to go to a court of law or can you resort to other means of resolving the dispute through mediation or arbitration? These questions, though seemingly negative and far-fetched, are incredibly crucial to protecting the interests of the parties to an agreement, and arguably are of greater importance to the freelancer who may not necessarily have the backing of an entire legal team or firm to help when things get a bit rough.


By clearly expressing the grounds for termination as well as their subsequent consequences, both parties can find themselves feeling more assured (and accountable) in the event of the relationship switching gears and becoming ineffective.


Margin Notes

As you can see, there are a lot of parts to a freelancer contract but the real trick is to understand that these clauses and sections have to be designed in a way that work for you. So even if you have a checklist of all these clauses in place, it’s important to remember to review any agreement in the context of the five prompts shared in the initial section of this post.

Armed with the clarity of what you want for yourself as a creative professional, you will be able to review and even draw up a rudimentary set of terms to help professionalise and capture the key points of any business engagement. Just remember that;

  • It’s always better to get things in writing. Verbal agreements are recognised by the law, but as you might guess, it’s challenging to prove their details. Similarly, always read everything and make sure that you’ve understood what you’re signing up for. If you’re really dealing with a high-stakes project, maybe even consider seeking legal counsel on both the terms, and whether you need to register your agreement for more protection.

  • Always negotiate – understanding the terms you’re signing up for is only the half of it. A better understanding paves the way for you to be able to better articulate your expectations. Use your voice, use your skills to negotiate a deal that works best for you. Remember, contracts aren’t inherently good or bad – it’s what we make of them.

  • Keep checking the pulse of your creative industry and community. Please be aware of the general going-ons in your professional circles so you don’t inadvertently find yourself charging or asking for things that seem too divergent. Having said that, if you feel that certain prices and conditions are worth asking for, then do so – having a sense of what’s going on in your creative community will also help you better frame your requests and negotiate with the right context.

Being a freelancer definitely has its merits, and with this working knowledge to get you started, you'll be able to make the best decisions for your business and creative career, while protecting your interests and creative contributions.


Photo bybongkarn thanyakijfromPexels

© 2020 Manojna Yeluri

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