Why You Need a Freelance Agreement
Just like they say, “good fences make good neighbors”, good agreements make good client relationships.
You’ve heard a nugget of wisdom repeated over and over: always use an agreement with clients! It seems like common sense, but a surprising number of freelancers continue working without agreement templates or contract templates. We’ll outline some common reasons why they don’t use an agreement, and explain why they should.
First and foremost, remember that you are the business. It’s important to establish a great reputation and long relationships with clients, but you have right and duty to protect your interests. Good clients will respect the professionalism you show by using agreements. Always protect yourself and your business.
A good agreement template sets clear expectations for what happens in various circumstances, covers what's already mentioned in the scope of work template, and allows you to enforce expectations if something goes wrong. Ultimately, having an agreement reduces the risk you don’t get paid for the work you do.
A good agreement can protect you from:
Scope creep — This is a common issue with freelancers: you’ll complete a project for a client, as agreed upon. Then the client will ask to tweak this.. and that.. and that.. until you end up doubling the time you budgeted for no extra money. Your rate has been effectively cut in half. You’ll save yourself many headaches if upfront you clearly agree to (1) what you’ll do (and not do), (2) how much you’ll get paid for this, and (3) the process agreeing upon work beyond this. Simple, but powerful.Unresponsive clients — You agree on terms, block off your calendar, produce great work, and then… nothing. The project takes way longer than expected because the client takes days or weeks to give you feedback, and you end up with less business because of it. Including your expectations for feedback (and what happens if the client isn’t responsive), can help save you time and money.Late / no payment — This is another common issue: you do the work, the client likes it, then… nothing again. That check you were expecting you pay rent? They’ll “get it in the mail… soon.” Sometimes this happens because clients are busy and disorganized. Sometimes they need a gentle reminder, and having clear payment expectations in the agreement helps. Sometimes, clients act in bad faith and simply withhold payment because they can. Again, having written expectations is the only way to solve that.
So, why don’t freelancers use agreements, and why should they? Below are some common answers we get.
“I’ve worked with client X so long and often, we just understand each other. We don’t need to formalize that.”
It’s great that you’ve developed a long-lasting relationship with your client. They wouldn’t want to continue working with you if you weren’t professional, and part of professionalism is having agreements. You don’t need to make it a complicated process getting new agreements signed. Having a simple yet comprehensive and fair agreement that you can create, send, and sign easily makes this process easy.
“Agreements don’t mean anything. What can I even do if the client breaks it?”
This is a common objection, but couldn’t be farther from the truth. You can use an agreement to correct a wrong long before you have to resort to any legal option (e.g., a lawsuit). First, agreements serve as an important written record, one you can point to if there are “what if’s” in the relationship. Often re-reading what both parties signed and agreed to will settle most disputes.
If the client still doesn’t adhere to the agreement they signed, the threat of legal action can help. You determine how best to handle this with your client, but it can be anything from saying you may involve a lawyer, to actually having a lawyer contact the client about the agreement. And finally, in the worst case scenario where you must go through a legal proceeding, having a clear written agreement will make the process much easier for you.
“I don’t want the hassle of signing an agreement. I just want to get to work and get paid.”
It can be tempting to jump right into work, especially when you’re coming out a dry spell. Be disciplined about including agreements in your process for signing all clients, new or returning.
It helps to have a standard agreement in place, one that’s easy to understand and fair to you and the client. It may take a few extra minutes up front, but it can save you a lot of time and money later. As the Boy Scouts say, “It’s better to have it and not need it than need it and not have it.”
There are many excuses for not using an agreement with clients, but none of them are good. Remember, you are a business and you must protect yourself. Having an agreement also helps your client relationships, by signaling your professionalism and defining what’s fair in the relationship. The key is having simple, comprehensive, and fair agreements that you can quickly create and send to clients.
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