Contracts for Freelance Work

Contracts are one of the most important and least understood aspects of the freelancing business. Employers and service providers all too often assume that the agreement they’ve entered into on a project is automatically legally binding. Unfortunately, this often isn’t the case, and even when it is, enforcing your legal rights can be both difficult and costly. This applies equally to service buyers and providers, so it’s a good idea to understand how to protect yourself when you hire someone or you are hired.

One important point to understand is that the modern freelancing marketplace is a global entity. You can hire or be hired by someone on the opposite side of the world for a project, with the click of a button! This opens up a wide range of possibilities, as well as a whole set of pitfalls. Unless you’re an expert in the areas of International Law, copyright, trademark agreements and much, much more, we suggest taking a simple, but practical approach to project contracts.

First, understand that if your project is a quick-turnaround job with a small price tag, a formal contract may be more trouble than it’s worth. If that sounds risky, it is. The fact is, though, that in an arena where employers want quick results and providers want quick payment, a formal contract often won’t even be considered. That’s especially true when there are thousands of service providers waiting to snap up quick projects. How do you, as an employer or freelancer, protect yourself on these projects?

1. Check the feedback of the other party BEFORE awarding or accepting a project.

2. Spell out your terms specifically in project descriptions, bids and private messages.

3. Use the message boards or email for communication. It’s hard to prove a phone call.

4. Use the Milestone Payments feature for payment.

None of the steps above will guarantee a successful transaction, but they will give you a basic record of the requirements and conditions, if a dispute should arise.

For more involved projects, where hundreds or thousands of dollars may be at stake, a contract is an absolute must. In today’s fast-paced, internet-supported business community, many buyers and providers have adopted a casual attitude toward employment contracts. Unfortunately, many have learned hard lessons because of that attitude. For projects that involve a considerable sum of money, the time spent preparing a contract, no matter how formal, is time well invested.

Now that you have visions of reams of paper and concerns about learning a lot of legal terminology, let’s put those to rest. You don’t have to be a lawyer to prepare a contract. If you have a good job description to start with and you’ve discussed the details in a bid and private messages, you have everything you need. A work contract simply needs to state:

1. The effective (opening) date of the contract

2. The name of the employer (business name is ok)

3. The name of the provider (business name is ok)

4. What the service provider will deliver

5. A date or approximate time frame for delivery

6. The agreed-upon price

7. Payment terms, including dates and/or milestones

These are the basic requirements and some projects will require more details. There may also be additional agreements to consider, such as Non-Disclosure Agreements or Non-Competitive Agreements. These and other contracts are available for download from many internet sources. Obtaining a signature from the other party may be difficult and time-consuming, but in most cases, you can ask for a scanned copy of the signed document by email or message board.

Whether you’re buying or selling freelance services, consider how much you stand to lose before starting a project without a contract.

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