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.

Grow your writing income. LEARN HOW! Freelance Writers Den

79 Comments

  1. Katy Reiber

    Speaking of contracts…

    What is the most universally used way of getting signed contracts? Do most writers have clients print it out, sign it, and email it back? Is a “please type I agree and send it back to me” sufficient? Do many spend the cash and do an official e-signature thing?

    Reply
    • Carol Tice

      Katy — I’ve found there is no ‘common’ anything in freelance writing! And I definitely don’t know of any poll data on how writers are doing contracts. I mean, it’s partly driven in the publications world by the standard practice of that magazine — they tend to send you a contract, however they do it.

      I know writers using Adobe Fill & Sign PDFs. Word docs they email back. Some people fax them over.

      I did take a day-long ethics training at one point, and was told that if you hammer out all your contract language in an email and have them reply with “I agree,” it has held up in court — it has a date stamp on it and does create a paper trail. But I think that’s best left for low-money deals. I want a formal contract for anything substantial.

      Hope that helps!

    • Steve

      Hi Katy.

      I agree with Carol – depending on the project, you will want a more formal contract than just an email stating that the parties agree.

      That said, it doesn’t have to be complicated, and you can use electronic signatures.

      In my jurisdiction (Florida), even the courts accept electronic signatures on filed pleadings. So, depending on your jurisdiction, an electronic signature should work.

      You just need to make sure that you have an offer, acceptance, consideration (payment for the work you will perform), and, of course, the provisions outlined in this article. Then, the parties should both sign the contract.

      If you have other questions, don’t hesitate to reach out.

  2. Tessa

    Thank you for your article, Steve. How do you determine what your replenishing retainer fee should be?

    Reply
    • Steve

      Hi Tessa. That depends on the type of project, the client, etc. For example, in my practice, I set my retainer based on the type of work, the complexity, the time I think it will take to complete the work, etc. Let me know if that helps or if you have any other questions.

  3. Carol J. Alexander

    Great advice. I started using agreements with clients when I had a magazine publisher not pay for several articles. Makes the working relationship so much easier.

    Reply
    • Steve

      Hi Carol. That is true. And the client should respect the fact that you want to use contracts. If they balk, it is the sure sign that you don’t want to work with them.

  4. Karen Cioffi

    Great information. I do have a question. What if your client only pays half or 2/3 of the total project fee. Does the client have rights to the content?

    Reply
    • Steve

      Hi Karen. That depends on what your contract says, and when you deliver the project. If your contract is silent on that issue, and you’ve already delivered the work, you still have a right to payment.

      You should write a demand letter requesting payment by a specific date, and that if you don’t receive payment by that date, you will take appropriate action.

      Carol had a great suggestion in response to another comment – re-invoice the client with a late fee included. Even if your contract doesn’t specifically provide for late fees, it may still prompt the client to pay the original amount due.

      I think that the best way to work is to use a replenishing retainer, that way you get paid as you work. Also, you should include an attorney’s fees provision in your contract so that if a client doesn’t pay, you can recover your fees and costs if you are forced to hire an attorney. This provision can also act as a deterrent to non-payment.

      I hope that’s helpful.

    • Carol Tice

      Right on, Steve — one of the other things I love about retainers is they come with a 30 day termination notice clause, so you have a month’s notice if the account is wrapping up. I hear too many stories of writers who overnight, find themselves without a big client they were counting on.

    • Karen Cioffi

      Steve, this is very helpful. All these tips will certainly make a client think twice before not paying. It’s happened to me twice and I think I’m about to get stiffed for the final third payment once more. I’ll tweak my agreement before I send out any more!

      Thank you so much,
      Karen

    • Mike Bradley

      And note that you retain all copyrights to the work until all conditions in the contract are satisfied, unless it’s a valid work-for-hire contract. So the chintzy client will be subject to all sorts of federal complications if it uses work it has paid for in full.

    • Helen McCrone

      Hi Karen. I always put a copyright clause in my agreements. I’m not a lawyer, so someone like Steve would have to tell you how much legal weight it has:

      Copyright
      I guarantee that the texts that I deliver to you are owned by me. I will retain ownership of those texts until you pay in full my invoice that relates to that text. As soon as I receive your money, the copyright to that text will be transferred to you and your client.

    • Steve

      Hi Helen and Karen. I can’t get into specifics about whether the language Helen quoted above works. Again, we lawyers have to be really careful about such things. But, in general, if you reserve the copyright until such time as you receive full payment, and that is stated in the contract that you and the client executed, then the copyright remains with you until you are paid in full.

      These issues can get really complicated. Remember, even if you reserve the rights to the work until you get paid, that doesn’t mean that a client will not use the work in violation of your agreement. Then you have a whole additional set of issues in addition to receiving the final payment.

      That’s why it is soooo important to have a written contract in place that spells out the entire agreement between the parties.

    • Karen Cioffi

      Steve, thank you again for being so generous with your knowledge and time. These are gems!

    • Steve

      Thanks Karen. It is my pleasure, and I am so glad that you found the article and comments helpful. Don’t hesitate to reach out if you have further questions.

    • Carol Tice

      I believe we have a sample contract in Freelance Writers Den that has this sort of clause in it, making sure copyright stays with you until they pay in full. And it’s a TERRIFIC idea.

    • Mike Bradley

      Depending on the client and the nature of the texts, you might add the means by which you’ll transfer the copyright: by email or registered letter, or maybe by registering the work in their name with the Copyright Office.

      And, oops. I should have noticed Steve alread answered the payment and copyright question. Sorry.

  5. Kristi Cathey

    Thank you for this post.I decided to work as a freelancer now. This post’s so helpful to me.Thank you for offering it.

    Reply

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