Drafting a legally binding contract (and having a client agree to it) is a significant step in any freelancer’s career. It shows you’re willing to legitimize your business, protect your reputation, and safeguard your payment.
So, if you’re here to learn more about how to write a legal contract, you’re making the right call.
We know it can be tempting to stick with oral agreements and vague email promises, but that’s not how you build a real and thriving freelance business! You need security, and business contracts or a written agreement provides that.
Getting this wrong can lead to hefty lawyer fees, so making sure everything is agreed and signed correctly is a must. If you're still in doubt after this article, it's always best to seek legal advice.
Put simply, a contract sets out the terms and expectations of a business relationship for , ensuring that all parties involved accept and uphold their part of an agreement. A solid, legally binding freelance contract should include the following:
But the truth is, there’s more to a contract than making a formal offer in exchange for cash, and across the next 12 steps, we’ll explore the key contract fundamentals you need to know.
Here's what you need to do if you're looking to create a solid contract template that covers everything you need without hiring an expensive lawyer.
Before you set about drawing up a business contract, you first need to determine what it is you’re agreeing to in as much detail as possible.
If you’re working with a small business, chances are you’ll be speaking directly to the business owner, which ultimately makes contract negotiation a far smoother process. You can simply set out your stall, and the owner has the final say over whether or not to proceed.
However, if you’re working with a larger organization, you need to make sure you’re dealing with the individual who has the authority to sign-off on your contract. If you end up negotiating with a junior member of staff, everything will take twice as long, as they’ll have to get the thumbs up from their boss or department head.
A simple, yet often overlooked aspect of a written contract between two parties, you need to make sure you’re addressing the right people and/or entities. This means if you’re entering into an agreement with a corporation or an LLC, you must identify them as such.
If you have a face-to-face, video chat, or telephone call with your client, and you agree to add in an extra feature or service to your project, put it in writing.
Don’t just shake on it. Don’t let anything slip. Don’t leave anything out.
If you do end up in a dispute over payment further down the line, and you haven’t included said feature or service (along with how much it costs) in your contract, it becomes difficult, if not impossible, to enforce.
And that could leave you out of pocket. Outline everything and make sure all terms and conditions are agreed upon so there's no danger of being accused of breach of contract.
The quickest way to make contracts is to use a freelance contract template.
And the best contract templates have everything you need to include from the outset, while also offering peace of mind that they’ve been checked over by a legal professional.
Better yet, you can use Bonsai to create custom contract templates that you can use time and again. Here’s how it works:
Want to give Bonsai’s seamless contract creation a go? Sign up for a 14-day free trial.
Writing a contract between a freelancer and a client doesn’t have to be complicated. In many cases, all you really have to do is communicate your terms and expectations, offer clarity over deadlines and payment, and cover dispute resolution and termination (more on that below). When writing graphic design contracts, let the clients know how many revisions they can get so you won't end up doing endless revisions.
This also means you should avoid complicated language or legal jargon — especially if you don’t understand it in the first place. Certain words and phrases have specific meanings under the law, so skip the legalese and opt for plain, easy-to-understand language.
The primary reason for having a contract is to protect yourself and your business, and for many freelancers, this protection largely centers around payment.
When approached incorrectly, money can become a contentious issue, putting strain on a business relationship. That’s why your payment terms should be as detailed as possible.
Another important reason for having a contract is to be able to handle disputes without risking breach of contract or the relationship breaking down.
While a contract can offer legal protection, it can also protect you from having to go to court in the first place. And this is usually beneficial to both parties, due to the time and expense involved in legal action.
So, make sure your contract states, clearly, what you and your client agree to do if something goes wrong. This might include mediation or arbitration as a last resort before you call in the lawyers for legal advice.
By signing the agreement, both you and your client agree to certain roles and responsibilities in a bid to deliver the service or project in question. If one of you fails to live up to your end of the bargain, it could jeopardize the success of the agreement.
And this means that you need to explicitly agree on the circumstances that can lead to either party terminating the contract without facing any legal consequences.
For example, if your work is dependent on your client making certain resources available, and they fail to do so after a certain period of time, you should be able to walk away without violating the terms of the contract or forfeiting your deposit.
Working closely with a business can often mean becoming privy to important and/or sensitive information. This works both ways, as you may have certain processes, workflows, or techniques that you’ve developed over the years as a freelancer and that you wish to protect.
So, when writing a freelance business contract, you should include a confidentiality clause or non disclosure agreement which ensures that both parties agree to maintain strict confidentiality regarding any business information learned while delivering the project.
We’re closing in on the finish line, and this step is among the most important — and most overlooked.
You need to ensure that you’re putting a timeframe or due date on your offer. If your client fails to sign and bind the contract within a reasonable amount of time, it should be void and subject to renegotiation. Otherwise, you could be agreeing to shorter lead times while delivering the same amount of work at the same budget. Don’t let this happen!
Having due dates agreed for when you can terminate the contract allows you to maintain control over your schedule and your cash flow.
Last, but by no means least, you need to make your contract easy to sign and date. You can either use a wet signature or an electronic signature. Read more about what is a wet signature if you prefer the traditional way of signing documents.
Fortunately, there's a better way and this is where a contract template from Bonsai comes into its own. Instead of asking your client to print, sign, scan and return, they can simply add a legally binding online signature, speeding up the process and allowing you to get to work faster. In case you used Microsoft Word to create the contract, we've also prepared a guide on how to insert a signature in Word. Adobe Acrobat is also one of the tools that you can use to digitally sign a document. You can read our guide on how to create a digital signature in Adobe if you want to learn more.
When it comes to contracts, the devil is in the detail. From the moment you sit down to write a freelance agreement, it’s up to you to leave no stone unturned.
Looking for a contract template? Bonsai has your back. Create and sign from vetted templates, streamlining your project and giving you peace of mind that your business is protected.
Sign up for a no-risk 14-day 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?