As a freelancer, you wear many hats. One of the most important is lawyer. You don’t need a law degree, but you do need to know how to review a contract template. If you don’t, you can make some costly mistakes. These can range from not getting paid to left hanging on due dates to several rounds of time-consuming edits. So safeguard yourself with these seven contract review tips, and whenever possible, use an online contract creator to get peace of mind.
The whole point of a contract is for both sides to get what they need. So during your contract review process, look at the language and words you used:
When looking at how to review a freelance contract either you created or one the client is asking you to sign, you need to understand the terms. Look over the details. Everything should have dates or deliverables assigned. So for example, if you have a three phase project, assign a due date for each phase.
This may sound obvious, but part of your contract review checklist should be to read your entire document to make sure it’s cohesive. It should flow well and each section should support the proceeding one. Using headers and bullet points is great in the contract review procedure process. It will call attention to the points you wish to make. Plus, it will make it easier to read for all clients involved.
How to review a contract should include what’s not there. In other words, after you have re-read your document, what’s missing? Walk through the key components of your project and ask yourself questions. For example:
And so forth. The point is to list anything in the contract that is important to the project success. This is why you need a freelance agreement template in the first place. It clearly communicates expectations for both parties.
One of the most important contract review checklist items should be to make changes. Mark the document where items are missing and be specific. For example, maybe payment was listed, but the method for payment was left out. Or maybe it’s unclear who your client contact is. Or you are unsure who owns the copyrights for the project once complete. Whatever it is, note it. You want the terms spelled out and communicated clearly.
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Next, send the document back to the client with your questions or suggested changes. This can be done via email if these are simple fixes. However, if the contract review process is complex, it’s best to either meet in person or have a conference call to discuss the differences. This is a chance to negotiate any differences.
A key component of how to review a contract is negotiation so know where you are willing to bend and what is your true bottom line. For example, if their pay is not what you expected, define a number in negotiation that is slightly higher than your needed number. That way, there is room to negotiate back and forth.
Or if this is a new client and they ask you to do a test writing sample during your contract review process, ask if you can use it for a personal portfolio piece. The key is get the most from your freelance contract and make it work to your advantage.
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The last contract review checklist step is to take any changes agreed on by both sides and add these to the contract. Then, you’ll want to double check everything before signing off. For one last recap of how to review a contract, ask yourself a few questions:
Once your contract review checklist is complete, it’s time to sign every section within your document. Then send the document to the client to sign. You can use Bonsai's online signature maker to create your e-signatures. You can also follow our guide on how to insert signature in Word and how to digitally sign a PDF.
Now that we’ve talked about how to review a contract, you may wonder if this is really needed. As a freelancer, paperwork is an added administrative step that many ignore. However, this can be quite costly. Freelance forms and other documents safeguard your business.
Plus you don’t have a legal or human resource department at your disposal helping you work through disputes. That’s why contract review tips are so vital. Your contract is your lifeline between running business smoothly or making costly and timely mistakes. Not only can you leave money on the table, but you could face legal issues from the employer or company. And, finally, you could create an entire project that the company could potentially use in their marketing efforts all without any legal ramifications.
So while contracts and taking the time to review them may seem tedious, it’s worth a little extra effort. Not only will it make for easier working relationships with your clients, but it will make for better communication throughout projects. Plus, you’ll add a layer of legal protection without having to hire a costly lawyer.
Do you have contract review tips? What are your suggestions for making the most of a client contract? Comment below and share your thoughts to help other freelancers. And if you're ready to give Bonsai a try, sign up for a free trial today.
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?