Freelance Agreement

What is a freelance contract?

Definition

A freelance contract is a legally binding agreement between a freelancer and a client, outlining the terms and conditions under which the freelancer will provide specific services. A freelance agreement template establishes a legal framework for professional relations between the parties, including:

• full names, addresses, and contact emails of parties involved;
• detailed scope of services and deliverables;
• milestones, schedule of services, and important deadlines;
• fees and invoicing clauses;
• protection of IP rights created in the course of cooperation;
• rules for a contract termination, etc.

The parties involved in a freelance contract are a freelancer and a client. A client could be a business, organization, or individual who needs to order certain services from a freelancer in exchange for remuneration. A freelancer is an independent contractor who possesses the required skills and professional expertise to deliver requested services. Under a freelance contract the freelancer does not act as a client’s employee. It means that a freelancer is solely responsible for paying their own taxes and defining exactly how the work should be done. The client may only comment on the final deliverables and not on the working process or methods in general.

The parties may enter this agreement to cover various ranges of services, including translation, web development, design, marketing, etc.

Freelance Contract vs. General Services Agreement

A freelancer agreement template could be easily confused with a services agreement. While both documents focus on the provision of services to the client, there are a number of important differences between them:

• First, a freelancer is always an individual, while a service provider is a company or business in most of the cases;
• Second, freelance services are being ordered for short-term and technical projects. General service providers take more complex multi-layer projects;
• Third, freelance contracts usually entail a simple model of payment like hourly rate or fixed fees, while general services agreements may include retainers, salaries, bonuses, etc.

How to draft a freelance agreement template?

There are two important rules every person has to follow when drafting a freelance agreement template. First, use only clear and unambiguous language. The simpler the wording you include, the easier it is to discuss it along the road. Second, include all mandatory elements to ensure the document is complete. Below we made a list of all important elements all freelance contracts should have:

Scope of Services

Even a simple freelance contract template should define the scope of services:

• type of services the freelancer shall deliver;
• specific final deliverables (e.g., app, website, tax report);
• format of final deliverables (e.g., Word document, PDF file, etc.);
• key dates (e.g., deadlines, milestones, or schedules).

Besides that, a freelance agreement should set out a client’s right for the revision of final deliverables. This is the right of a client to request amendments to the final deliverable. Normally, a freelancer provides one or two free rounds of corrections, provided those corrections are within the scope of the original services’ description.

Finally, the text of a contract usually lays out that a freelancer’s work cannot infringe on the third party’s rights, including IP rights. It means that the freelancer cannot use the final deliverables from other projects in a client’s project and vice versa.

Non-Compete Obligation

Some clients may wish to limit a freelancer’s right to work on other similar projects while working on the client’s project. Such a limitation is widely known as a non-compete clause. Under this clause, a freelancer cannot cooperate and engage in any projects with the client’s direct competitors for the whole period of a freelancer contract and for some period after its expiration.

Normally, a post-termination limitation lasts between 6 and 12 months depending on the complexity of a project and a freelancer’s expertise.

Besides that, the client may limit the freelancer’s right to cooperate with the client’s competitors within a specific territory—e.g., state, region, country, or town. For instance, a client under a freelance agreement template is a company operating within the U.S., while the client’s main competitor is a multinational company operating in the U.S., Australia, and Canada. In that case a client may wish to limit a freelancer’s right to work for that multinational competitor only within the territory of the U.S.

Confidentiality Obligation

A solid freelancer agreement template includes a standard confidentiality clause to protect a client’s sensitive information against disclosure. In the course of cooperation, a freelancer may get access to the client’s non-public or trade secret information. If this clause is included, it means that the freelancer cannot disclose any information not only during the period of a freelancer contract but also within one or several years after its termination.

Fees and Payment Terms

A key element of every freelance agreement template is a payment model that outlines how much, when, and how the freelancer shall be paid. This is what you need to include in your freelance contract:

• Fee structure (e.g., fixed fee, hourly rate, daily rate);
• Maximum cap (i.e., a maximum number of hours or days a freelancer can spend on the project, which is not applicable for a fixed rate);
• invoicing period (e.g., every week, every month);
• acceptable payment method (e.g., PayPal, Google Pay, etc.); and
• Reimbursement for approved expenses (when applicable).

Termination

Every freelance contract agreement template stipulates the rules according to which either party can end the contract. Below we made a short summary of how you can end a freelance contract:

• Normal Termination: Either party should be able to terminate this agreement with or without cause by sending a prior written notice to another party. The notice period usually differs from 10 to 30 days depending on the duration of a freelance project itself.
• Immediate Termination: This is a freelancer’s exclusive right to end the contract once the fees are being delayed or not being paid on time.
• Automatic termination: A freelance contract ends automatically upon completion of the services and fulfillment of all obligations, including paying the requested fees in full.

Signatures and Dates

The last step to make a freelancer contract agreement template a legally binding document is to sign and date it. Both parties shall put their signatures at the end of the document along with the date on which the document is being signed.

It does not matter if you put a signature by hand or using online e-signature tools, as both ways are acceptable. If a client is a legal entity, then the client’s director, CEO, or any other person designated by the bylaws shall sign it.

Neither federal nor state laws require any further notarization of a document. Therefore, once it is signed, it becomes effective immediately.

How to customize a freelance contract at FasterDraft?

To get a fully customized legal document template, follow a few easy steps below:

1. Click the “Create Document” button.
2. Answer simple questions in the form.
3. Select a template’s format—freelance contract template Word or PDF.
4. Make a payment.
5. E-sign, download, and instantly use your customized document.