Freelance Contract Failures: 5 Things to Include in Every Contract

Editor

If you’ve been burned by a client that doesn’t pay, there’s a good chance a freelance contract failure is to blame.

It’s a common theme among freelancers I’ve seen in 16-plus years as an attorney who helps freelance writers and small businesses.

I’ve seen too many writers land a “dream client,” start working without a freelance contract in place, and then have the whole thing fall apart.

Sound familiar?

Avoid a freelance contract failure

It happens. Especially for freelancers who are just starting out. You get excited about landing a new client and making money writing. You start working and skip over getting a signed contract.

Before you know it you’ve sunk a lot of time into a project. Then the project changes. Or you never get around to negotiating important details for a freelance contract. Then the client fails to pay or refuses to pay because the work isn’t what they wanted. Now what?

Working without a freelance writing contract is a gamble. It might work out, but you run the risk of flushing freelance writing success and your hard-earned money down the drain. Next thing you know, you’re chasing down your client begging them to pay your freelancer invoice with no response.

And in case you’re wondering, litigation usually isn’t the answer. Why? The cost to collect typically eats up the freelance check you were counting on, even if you do manage to squeeze out a payment from your client.

My advice, don’t get yourself in this situation. Before you start working for a client make sure you have a freelance contract in place with these five provisions.

 

1. Compensation

This one is obvious. But within your compensation provision, you need to include a retainer, late fees and kill fees in your freelance contract.

  • Never begin work without a retainer. And you should use a replenishing retainer to ensure consistent cash flow. Using a replenishing retainer is simple. For hourly-rate projects, your client will pay a retainer, let’s say it’s $750. As you work, you bill your hourly rate against the retainer. When the retainer balance falls below a certain amount, the client must “replenish” the retainer back to $750. And you don’t continue working until the retainer is replenished.
  • For flat-rate projects, your client pays a retainer upfront and then additional amounts over time. The client might pay you each month, quarter, or year. You don’t continue working until each retainer amount is paid. This also works on a subscription basis if you have a client who wants to pay you at regular intervals to ensure your availability to work as needed.
  • Late fees and kill fees. In addition, the compensation provision in your freelance contract must include late fees if a client fails to pay on time, and “kill fees” if the client cancels the project after you’ve begun work. A kill fee is a specific amount of compensation to cover the time you spent on the project up to the point the client “killed” it.

 

2. Attorney’s Fees and Costs

Many times, the cost of taking legal action is a barrier to freelancers. For example, if a client owes you $350, your legal costs will eat up most, and more likely all, of what the client owes you.

However, this provision in a freelance contract allows you to collect not only the $350, but also your attorney’s fees and costs if you prevail. And, just having this provision in your freelance contract can deter a client who may think about stiffing you.

 

3. Scope of Work

Avoid scope creep by specifically stating the work you will do. Anything outside of the scope of that work will have to be negotiated separately and memorialized in a new freelance writing contract.

 

4. Merger Clause

This clause states that all of the agreements between the parties related to the project are “merged” into the written contract. With this provision, neither party can claim that something that isn’t addressed in the freelance contract is part of the agreement. In other words, if it isn’t stated in the contract, it isn’t part of the agreement.

 

5. Amendments to the Agreement

All amendments must be in writing and signed by the parties. If it isn’t in writing, there is no amendment, and the parties are bound by the original freelance contract. Much like the merger clause, this provision will ensure that there are no misunderstandings between the parties about what is, and isn’t, in the agreement.

 

Bottom line to avoid getting burned: Get it in writing. Before you begin working on a project for any client, get a freelance contract in place. Take the time to address these five provisions with your client and negotiate terms you can both agree on. These five provisions must be in every contract you sign. They will protect you, and ensure that you get paid.

What freelance contract issues have you had as a writer? Let’s discuss in the comments below.

Steve Zakrocki is a Florida-based attorney who helps freelancers and other small business owners get paid and protect their businesses and families. He also runs the website Legal Ed for Freelancers, which is devoted to helping freelancers understand legal issues.

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79 Comments

  1. Andrea Kluge

    Not quite tracking on the retainers. I have steady clients who assign me one-off jobs as they arise. Asking for a retainer doesn’t make sense for a short-range flat-free project – by short-range, I mean 4 to 6 weeks from job assignment to final deadline. In these cases, I ask for 50% up front and 50% upon final content approval. For larger projects, I break up the overall fee to incremental payments based on milestones reached. Also, merger clause is a bit unrealistic when you are dealing with larger corporations.

    Reply
  2. DL Stickler

    Generally, it is when a person is starting out or just needs work, any work that they agree to verbal representations. This Article is an important reminder that any Business Arrangement is a Professional Relationship when it is in writing.

    Many years ago, I agreed to an Email Chain as sufficient to start work as a SEO Writer and Consultant with a Client.

    It was not sufficient. The Client struggled with her responsibilities as to our original agreement as to what was expected from her as a Client.

    She engaged in different tactics to expand the original Scope of the Project without Compensation. She engaged in evasive maneuvers when it was time to pay her Invoices.

    Although I did require a small retainer from her to start the work, the Project and my patience with the Client waned after she continuously added additional requests and rework without agreeing to additional Compensation.

    Eventually, I had to call it quits with her. I attempted to use Legal Recourse stating that I did have an Email Chain that detailed our Original Agreement.

    She changed her email or deleted it. And then proceeded to change her phone number and made it impossible for me to find her to file any Legal Recourse.

    It did not help that she was or still is a Resident of another Country. I had to write it off to experience. And, learned then that Written Agreements and Retainers with Periodic Invoicing and Performance Reviews are the way to go.

    Reply
  3. Mike Bradley

    I’m leery of retainers, both because they generally freeze your rate for the length of the contract and because they make you look like an employee to government agencies regulating that sort of thing (I’m in California so I’m very aware of that).
    On other contract issues, I’d add keeping copyright to works you might want to re-use later; negotiating safe warranty & indemnification, non-disclosure, and non-competition clauses; and a fair procedure for cancelling a contract. It’s important to know your state and local laws about these clauses. For instance, most states won’t enforce the standard non-competition clause we are usually asked to sign, and some states insist that a worker be paid for work performed whether it was satisfactory or not. Cancelling a contract is one thing, but not paying for work performed is entirely different.

    Reply
  4. Arpit Agarwal

    I never heard before the kill fees. And now, when I think about it…. it does make sense.

    Also, I like to add one line in the contact that “only minor” edits are allowed within the 7 days from the date of the submission.

    Reply
    • Carol Tice

      I’d say good luck defining THAT. I actually take an opposite approach and make a lot of sales by saying, “I write until you’re ecstatic.” I don’t limit edits or time or anything. I’m in it to win it for you, until you’re happy.

      I can do it because I’m a good listener and tend to crush first drafts, and have been doing this a long while. And I find that sales angle really reassures clients and gets me the deal.

    • DL Stickler

      I would think you must Screen Prospects in some way before you get to that though, don’t you? Someone with a Rep like yours must bring some less then desirable prospects to your door sometimes?

  5. J. Writer

    Hi Carol,

    I just snagged my first freelance writing gig. The client asked that I contact her directly, outside of the freelance website on which she found me. Also, the contract requires my home address. Is this spooky? Am I just a noob?

    Reply
    • Carol Tice

      I usually don’t allow comments from obviously fake names…but I really wanted to respond to this. There’s so many problems here.

      First off, you’d have to check with that platform to see if it violates their terms of service to work with them outside of their platform, if you connected on their initially. Rules differ. You’ll have to decide if it’s worth the risk to you of being banned from that platform, if it’s against the rules.

      The bigger problem is that ‘freelance website’ platforms are generally not good places for freelance writers to hang out. Rates tend to be super-low, so this client’s rates will probably be as well. Read this blog for 900+ posts full of info on how to find your own clients and get paid professional rates.

      As far as the contract asking for a home address…does it REALLY ask for that, or just ‘an’ address? Many freelancers who’re home-based rent a PO box to use for these sorts of situations. You’re free to do that, usually, if it worries you. But yes, with legit clients, like, say, the $100M chemical marketing company I’m writing for now, or my last client, Delta Sky magazine, I don’t have a concern about giving them my home address. It’s where they’re going to mail the check!

      What I wonder is…what do you KNOW about this client? How long have they been in business? Do they seem to have a viable business? Have they ever worked with freelancers before? There are a million scams out there, so be careful. I hear every day from writers who got ripped off and never paid…but they usually don’t have a signed contract. Be sure to research your prospect so you know who you’re working for…and have an address for THEM.

      Finally…you don’t have a freelance writing gig yet. When you have a 30-50% up-front deposit check that cleared (you asked for one, right?) and a signed contract, then you’ve got a gig.

    • Mike Bradley

      It’s totally unethical to bypass the agency!

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