According to the 2019 Freelancing in America study, nearly $1 trillion, or almost 5 percent of U.S. GDP, freelance income contributes more to the economy than industries such as construction and transportation. And freelancers earn on average more per hour than 70 percent of workers in the overall U.S. economy. But with all this great news for freelancers, how do you make sure you are paid for the work you do? Simple...you create a contract template. But how to draft a contract may be your next question.
Before you panic, you don’t need to be a lawyer to create one. There are some simple steps to follow that will protect both yourself and your clients. That way you will get compensated and your clients will get the work promised on time and on budget. So let’s look at how to write a contract between two parties for a win-win working relationship.
There are set items to include in a freelance contract. Think through your interactions with your clients and then put it in writing. With the various forms of communication these days from emails to conference calls to project management systems, it’s hard to recall what was agreed upon on both sides. So by writing out the contract, both you and the client can understand and refine what was agreed to.
Next, in terms of your contract drafting checklist should be project scope. In other words, you need to define what you'll be doing for the client. This sets reasonable and also attainable expectations. Some of the contract drafting examples for a content writer may be word count, images used and keywords. If you're a graphic designer for example, when writing graphic design contracts you need to let the client know how many revisions you can offer so you won't end up doing endless revisions.
Basically, you’ll lay out what you will provide the client and what the client will provide you. That way everything is clearly communicated.
Just because you discussed payment over email or phone, you want this in writing. That’s why one of the contract drafting tips that’s vital is setting the payment. Write down specifically what the pay is. For example, are you to be paid by the hour, project or another set fee. If it’s by the hour, make sure to estimate about how many hours the projects will take.
This should also include how many rounds of edits or changes this fee includes. Finally, you want to include if you will be providing freelance invoices and how you expect to get the money through PayPal or direct deposit or another method.
No one goes into a working relationship thinking it won’t work out. But reality is, sometimes there is conflict or differences of opinion that can’t be resolved. How to draft a contract with this in mind? Add a voiding clause. A few lines saying if the project is stalled for a set period of time, then you are to be paid for work up to this point. This should also be the case if the project is terminated all together or there are differences of opinions that can't be worked out.
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Personalization is one of the contract drafting tips worth mentioning. By using your client’s name as well as your own throughout the contract, it makes it more personal. And you want to build long-lasting relationships with your clients because it’s less time you have to chase new business opportunities. You should also use your LLC name if you are incorporated. That way, it legally binds your business to your contract.
How to draft a contract to ensure sensitive material? You need to account for it in the language. One of the contract drafting examples for this may be working with a publicly-held client. You won’t be able to publicize in any fashion sensitive data that may affect stock prices for investors. So in your contract include language to protect both the business and yourself from any potential legal privacy issues.
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Within your contract drafting checklist should be who owns the copyrights. It’s important to decide if this is the client or yourself. While more times than not, it will be the client, there are also nuances to this. Say one of the contract drafting examples may be you using the materials in an online portfolio to gain more business. Would this be okay with the client? When building a contract between two parties, you should spell this out and make it clear what is okay and what is not.
Although there are several important components that go into a contract, it doesn’t need to be long or wordy. Despite what other contracts may look like in different forms of law, a client/freelancer contract just needs to communicate the terms. So how to draft a contract? Use short sentences and easy-to-understand language.
Lastly this may be a given, but make sure everyone who needs to sign and look at the contract does so. This should include anyone that may work for you like an assistant who may be helping to produce the work. Likewise, if you have more than one client contract, each person should sign and date the contract. That way, everyone is on the same page and no one touches a project who is not legally bound to the terms. Here's our guide on how to digitally sign a PDF and how to insert a signature in Word that you can follow when signing the contract.
We’ve given you nine simple steps on how to draft a contract. Although every contract will be slightly different, you can follow a templated version to simplify your life. This is where Bonsai can help if you decide to sign up for a free trial.
Remember to mentally walk through the project and include all the details from start to finish. That way, you safeguard yourself and your client. Plus, you set both of you up for a good working relationship moving forward.
Comment below and let us know what you’ve learned writing client contracts.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?