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.
1. Standardize it in writing
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.
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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.
3. Set payment
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.
4. Voiding contract clause
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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5. Make it personal
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.
6. Factor in security
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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7. Decide who own the rights
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.
8. Keep it simple
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.
9. Bind the contract
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.
What have you learned in terms of how to draft a 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.