What is a Simple Contract?
A simple contract is a document that a freelancer or independent contractor can use to outline a working agreement between themselves and a client. It describes the obligations and responsibilities of each party, such as which services are being provided and their total cost.
A simple contract is also sometimes called a:
- Service agreement
- Independent contractor agreement
- Freelance agreement
- Contract agreement
Who Should Use a Simple Contract?
Any freelancer or independent contractor who provides their services to clients in exchange for payment should use a contract. Contracts are recommended for any and all freelancers, regardless of whether you’re a:
- Graphic designer
- Web designer
- Digital marketer
- Photographer or videographer
- Writer or editor
- Software developer
- Wedding planner
- Event planner
No matter if you’re hired for a simple, one-off project or ongoing services, it’s recommended you create a legally binding agreement to protect yourself in the event of a dispute or nonpayment.
When to Use a Simple Contract
The best time to create a contract is at the beginning of a relationship with a new client before any work has been done but after you’ve already agreed on services and pricing.
Make sure to discuss the client’s needs, expectations, and more before creating your contract. The more you know about their project, the more accurately you can price and the more relevant your contract will be.
Once the agreement has been reviewed and signed by all parties involved, you can then proceed with the work you’ve been hired to do.
What to Include in a Simple Contract
Each contract that you provide to a client should include a few essential elements, such as:
1. Contact details
This includes the names and addresses of each person involved, such as you and your client. Because a contract is a legally binding document, it needs to clearly identify who each party is.
2. Service description
Each contract needs to outline the specifics of the services you are being hired to do. For example, if you’re a writer, this section should address:
- What type of content you will be writing
- The minimum and maximum wordcounts
- How many rounds of edits are included
- Whether the topics or briefs will be provided by the client
- Which format the content will be delivered in
- What the due dates are
Remember to describe exactly what you will be providing to the client based on the services you offer and the industry you work in. Being specific in your contract helps to avoid misunderstandings and clarifies expectations.
3. Payment details
Contracts are the ideal place to outline and specify payment-related information, such as:
- Payment terms, like due dates, late payment fees, and more
- Whether a deposit is required
- The payment methods you accept
- Your hourly or monthly rate, or the total payment amount for the project as a whole
- The currency payment will be made in
- A payment schedule
Remember to discuss each of these elements before creating your contract so that you know you and your client are on the same page.
4. Intellectual property rights
Even a basic contract should address who retains the rights to any intellectual property such as written content, photos, code, and more. While you may assume that anything you create belongs to you, your client may not feel the same way.
Having a legal contract in place will clearly define who owns any intellectual property created for the working relationship you have with a client.
5. Indemnity agreements
In a freelance contract, an indemnity clause typically outlines your agreement as the service provider and the client’s not to hold the other financially responsible for any liabilities, losses, damages, or expenses in the event that a third-party claim or breach of contract.
Essentially, you’re agreeing not to hold each other responsible for any unexpected financial or legal issues that may arise.
6. Termination information
Typically, contracts don’t last forever. Each contract that you create needs to address how and when it will end. For example, some contracts end on a specific date while others end upon the completion of a specific task.
You will also need to determine how a contract can be terminated, such as by either party providing 30 days' written notice to the other.
You may want to address how to handle circumstances in which a contract may be subject to early termination, like a violation that results in a breach of contract.
Lastly, every contract needs to include a place for each party to sign. It’s important to note that you don’t have a legally binding contract until two or more parties have signed the written document.
Once you have the client’s signature, make sure to add your own and provide a copy of the signed and dated contract to each party involved.
READ MORE: How to write a contract in 12 easy steps
Why Should I Use a Simple Contract?
As a freelancer, contracts are one of the most important tools you can use to guide and outline the relationships you have with clients. Using a contract will help you to:
1. Look more professional
Using legitimate contracts gives you a professional edge and sets you apart from other freelancers who don’t. Clients want to know they’re working with someone who takes the work seriously.
The more that you angle your freelance services as a small business by using professional contracts and documents, the more likely you are to attract and sign bigger, better clients.
2. Have legal protection
While you don’t go into a new freelance relationship expecting it to go sideways, it can happen. A signed contract offers you legal protections in the event of a dispute or refusal to pay. It’s hard for a client to argue with the terms outlined in an agreement they reviewed and signed.
For example, a contract can help you to prove:
- How much a client agreed to pay you
- Who owns the rights to intellectual property
- Which services you agreed to provide
- That you were acting as a contractor and not an employee
- Whether the client was responsible for covering specific expenses
3. Communicate clearly about responsibilities and obligations
What better way to outline and describe the roles and responsibilities of each party in a freelance relationship than with a contract? Since contracts include a variety of elements meant to describe the obligations of each party in the working relationship, they’re an ideal way to ensure you and your clients are on the same page.
Before actually signing a contract, you will have spoken to or met with the client at least once to discuss their needs and goals as well as your services and pricing. Continue this conversation all the way through your contract to keep things clear and upfront so you both know exactly what to expect in the future.
A good contract also outlines specifics, like when and how it will end, who pays for what, and a clear payment schedule, making it hard to miss any important information.
4. Prove you have an agreement
Proof of a signed contract can come in handy in a variety of situations. For example, you may need one to obtain financing for a mortgage, a business or personal loan, or vehicle, or for tax purposes.
As a freelancer, you don’t have the same job security as a regular employee, which can impact how banks and other financial institutions consider your income. Signed contracts are proof that you have ongoing income, helping you to demonstrate that your small business is thriving and financially stable.
5. Record reference material
Sometimes, the longer a relationship with a client goes on, the hazier the details about your initial agreement get. When was the end date again? And did the client agree to pay for your ticket to fly out to their head office?
A written contract is the perfect way to provide you with reference material down the road. If ever you’re unsure of what you or the client agreed to at the beginning of your relationship, simply find and review your contract.
For example, you can use it to jog your memory when it comes to:
- The rate of any services provided
- When your contract is supposed to end and whether it’s renewable
- Penalties surrounding late payments
6. Save time
Using contract templates keeps you from having to start from scratch each time you bring on a new client. Contracts are a lot of work, and it’s not always easy to know which elements you should and shouldn’t include.
Save your small business time and money by using a contract generator like Bonsai so that you can have a contract ready to sign in minutes, not hours.
Sign up now to get started.
How to Create a Simple Contract
You have three options when it comes to creating a contract. You can write one yourself, hire a lawyer, or use a contract template from Bonsai.
Making your own contract
While you can make a contract on your own, it’s not recommended. Each clause, term, and condition, needs to be worded a certain way to ensure that it’s legally binding and fair to both parties. Contracts that don’t follow contract law will be thrown out, regardless of whether they’ve been signed or not.
Unless you’re well-versed in contract law, you’re likely to accidentally invalidate your entire agreement with a simple mistake.
Hiring a lawyer
Your next option is to hire a lawyer, but this will be pricey. This option is really only necessary if your contract is particularly complicated or unique. For example, if a basic template doesn’t include the right elements or you need to add a very specific clause related to confidential information or a background check.
Making a simple contract with Bonsai
For most freelancers and their clients, using contract templates is the best option. With Bonsai, you can create a free simple contract in just a few clicks.
Each of our contract templates:
- Is drafted by an experienced lawyer
- Adheres to the governing law of the contract
- Includes all the necessary elements to make a valid freelance contract
- Can be customized to include your logo and brand colors
Plus, it’s free when you create an account. Sign up now to make your first contract in minutes. Once you’re done, easily share it with clients, collect digital signatures, and get to work.
As an added bonus, Bonsai offers a host of other freelance services, which help you to track your working time, send invoices, and receive payments.
Simple Contract FAQs
Are verbal agreements binding?
Verbal agreements are binding, but only if you can prove that they were made, which is exceedingly difficult. Unless you have a record of the conversation you had with a client that includes their agreeance to the terms described, it’s nearly impossible to prove the existence of a verbal contract.
In business agreements especially, you should always have a written, signed contract to refer back to in the event of a dispute or misunderstanding.
What if the client doesn’t sign my contract?
In order for a contract to be legally binding, it must be signed by both you and your client. Don’t start any work until your client has agreed to your contract in writing. You can’t hold them to anything in the agreement without a signature, including payment specifics.
If a client refuses to sign because of a specific clause or element in the contract, find out what it is and consider whether it can be revised. If so, simply make the adjustment and send it again. If not, however, you may need to continue negotiations with your client.
Who should be in a freelance contract?
A freelance contract should include at least two parties: the service provider (freelancer or independent contractor) and the client. In some cases, there may be more than one freelancer or client, in which case the contract should include all relevant parties.
Anyone whose name is listed in the contract needs to sign the document before it will be legally binding.
When should I update a freelance contract?
It’s good practice to review your freelance projects either:
- On a yearly basis
- At the beginning of a new project
If you have ongoing contracts, give them a once over each year to ensure they’re still relevant and up-to-date. Small changes may need to be made, like the format in which you provide deliverables, or larger ones, like renegotiating your rate.
For new projects with existing clients, sign a new contract or update your existing one to reflect any new work or responsibilities.
Keeping your contracts relevant ensures that still offer you legal protection and that they accurately reflect your relationship with a client.
- Contracts: Looking for a specific contract? We have agreements specific to many different industries, including software development, modeling, social media, and more.
- Invoices: Already signed a contract and ready to send your first invoice? We’ve got you covered. Choose an invoice, send it digitally, and get paid, all with Bonsai.
- Quotes: Want to send a quote before you move forward with a contract? Take a look at our customizable quotes to find one that works for you.
- Proposals: Looking to send a project proposal to a potential client instead? Find one for your industry and get started.