New to contract templates? Read our guide below.
As a freelancer, you should have contracts with all of your clients, regardless of the size of the job or the relationship you enjoy with each particular customer.
Contracts are what ensure you’re protected, as you and your client agree to the work that you’ll perform, payment schedules and more. Contracts are closely linked to proposals and invoices.
Contracts are necessary if you’re performing an initial project for a client, or you’ve had the same customer for years. Contracts are essential for one-time gigs, for retainer relationships, and for jobs that are big or small.
If that sounds like a hassle, that's where a contract template comes in. Having a contract template can reduce the amount of time you spend on administrative work, letting you get to the job at hand while still ensuring your protection.
So let’s dive into everything you need to know about contract templates.
What is a contract template?
A contract template is a document that is created that can be used again and again. It’s a standardized form that includes information that can be used for any type of agreement with a client, as well as blank spaces where client-specific and project-specific information is inserted.
Contract templates can also be called agreement contract templates or standard contract forms.
Contract templates are beneficial when you have situations where the same type of deal will be made over and over, such as when you do a specific type of work for multiple clients. That means very little information is changed each time you use the template. Instead, there is "boiler-plate language" throughout the document, such as payment terms or other phrases that are used with many different clients.
Then there are sections, such as client-specific information, that you would update before sending to the client.
You could even have contract templates for each type of work you do. For instance, if you're a freelance writer, perhaps you have a contract template for writing regular blog posts, one for website content projects, and more.
Why use a contract template?
There are several compelling reasons to use contract templates in your freelance business.
First, it could get extremely time consuming if you were to draw up a contract from scratch every time you obtained a new client, started a new project, or were successful in winning a request for proposal. That time spent on such repetitive tasks can be better spent finding those clients and doing work for them!
Secondly, contract templates will also ensure uniformity when it comes to important legal terms. You might consider getting legal advice for a contract template, but once that important language is agreed to and confirmed, it can remain the same for every contract you complete using the template.
You’ll also find it easier from a record-keeping standpoint. For each project or client for which you undertake work, there should be a connection between the initial proposal, the contract, the invoice or invoices, and the payments.
In the end, contracts are vital to your business, as they ensure protection of your assets, agreement that you will be paid in exchange for your work, and give you recourse in any type of disagreement with a client. It’s not something you expect or wish for, but it can happen. With a contract in place, you have legal recourse in the event of a dispute about the work, the payment, and rights to intellectual property, for instance.
A contract also outlines the scope of work, the payment terms, and the payment schedule. Contracts are essential for you as a freelancer, and they also help protect your clients. In fact, a client entering into a professional relationship with you should expect a contract. That’s when having an effective contract template will provide endless value to your business.
Even if you find yourself in the situation where the client wants to supply the contract, remember that it can be modified to suit your needs. In this instance, you would still use your contract template as a basis for reviewing the client’s contract.
You can then ask for modifications or changes to certain portions of the contract to reflect your needs.
Types of contract templates
Besides a generic contract template that can be used for general situations, there are a few specific kinds of contracts:
Fixed Price Contract Template
Do you want an easy to use contract template for fixed price projects? Use such contract templates to include the pre-established price and any relevant terms or conditions.
Online Contract Template
Used extensively by those always on the go or switching between computers, online contract templates are a great way to take advantage of cloud storing solutions for contract templates.
Self Employed Contract Template
Use a dedicated self employed contract template for all your needs, whenever working with a new client. Fill in the template with your essential details and store it for quick re-use.
Simple Contract Template
These types of contract templates are great if you don’t want to over-complicate yourself or the client. Simple contract templates include only the essential clauses.
Electronic Contract Template
Sometimes the fastest way to send create a contract is to just edit an already created electronic contract template with your personal details, your client details, and service details.
Standard Contract Template
If you want to make sure that every document that is seen by your clients looks good and is easily identified as coming from you, just use a standard contract template.
Basic Contract Template
These contract templates are used when you want to keep information included in the contract to a bare minimum. Basic contract templates are a great way to sign new clients fast.
Hourly Rate Contract Template
Use an hourly rate contract template for all the projects where payment will be made based on your hourly rate. Make sure to include all the important clauses.
Blank Contract Template
Using a blank contract template is the perfect way to prepare your own template and have it ready for whenever you need to sign with a new client.
Downloadable Contract Template
This is the best way to go if you're looking for a downloadable contract template to edit directly on your computer.
General Contract Template
General contract templates are used as a great starting point for any type of project. Make sure yours is easily customizable.
Generic Contract Template
Such contract templates contain only generic clauses and are usually very versatile and adaptable to any type of work.
Contract templates also come in the form of retainers
Contract templates vary by industry
7 common mistakes to avoid while using contract templates
Contract templates are useful, but there are still some pitfalls in using them, unless you’re aware and avoid making mistakes.
At Bonsai, we’ve worked with 150,000+ freelancers and most of them are in the top 1% category in terms of earnings. We asked them what their top mistakes were and how they would avoid each.
Here are the 7 mistakes to avoid when using contract templates:
Being too rigid.
If you have legal terms that have been cleared by a lawyer, make sure they aren’t so rigid that you can’t use them in multiple situations. You need to be sure that terms can cover different types of work, projects and clients.
Using unclear terms.
The terms also have to be clear enough that clients can understand them. It’s not enough that you know what they mean; a new client needs to be able to understand the concepts and terms in the contract.
Not using the term “contract".
Using the word contract makes it a binding document and not simply a handshake agreement.
Using general terms.
Make sure the terms are not only clear, they are very specific. That can help avoid any disputes or misunderstandings in the future. This is especially true when it comes to payment terms, late payment clauses, milestone deadlines, etc.
Avoid using words that only make sense to you or those in your industry, for instance. As mentioned, the language needs to be clear to clients as well as you - and should be clear to those in the client’s organization that handle contracts and invoices. If necessary, include definitions of any terms that may be confusing or open to interpretation.
Agreeing to a “non-compete” clause.
As a general rule, you shouldn’t have a non-compete clause in a contract template, and be careful if a client wants to include one. Unless that client will be providing all of your regular income, there’s no reason that you can’t work for other companies. Securing a variety of work from a variety of clients is the bread and butter of a freelance business.
Not using a lawyer for final review.
After drafting, it’s a good idea to have your contract template reviewed by a lawyer, who can guide you through any of the legal terms and ensure that you are protecting yourself and your client with good contract language.
We’ve baked in a lot of the best practices mentioned in these tips in our own contracts tool called Bonsai. It costs $19 per month and is used by 150,000 freelancers. Give it a try with a 14 day free trial.
What should a good contract template include?
It’s true that an agreement contract template will be modified for each client or project that you undertake. However, there are similar sections and clauses that will be the same for every contract.
Here are the key sections that a good contract template should include:
If you do similar work for multiple clients, it’s a good idea to have work descriptions ready, either in the contract template, or ready to insert into the template depending on the nature of the work you’ve agreed to do.
Once again, if you’re a writer, you can have at the ready a description for writing regular blog posts, along with a description of a website content project. You can choose whether to have an agreement contract template prepared for each line of work you do, or simply have the descriptions ready to insert into the template to form a contract. You can also have statements of work prepared to attach to contracts.
The same is true of retainer relationships. If your freelance business is marketing, and you regularly enter into retainer relationships to manage marketing for various clients, you can have a contract template ready, or a description of the services provided by having you on a retainer.
And let’s be clear. Even if you have a great relationship with a client for whom you perform regular tasks on a retainer basis, you need to have a contract that spells out that agreement. A handshake isn’t enough.
A retainer contract template should outline what work will be done, in what timeframe, and for how much money, whether that’s hourly, or based on performing certain tasks in a set time frame.
The price of your work
By having a rate disclosure in your contract template, your client will understand your rate and how it works. That could be an hourly rate, a daily rate, or a per-milestone or per-project rate. By making sure your payment information is clear and transparent, your client will understand what you’ll deliver and what that will cost.
A payment schedule can then be inserted into the contract that’s specific to the project or client. If it’s a large amount of work, there can be regular payments included, and you can also outline how you accept payment.
Some agreement contract templates spell out that the work won’t be shared with the client until final payment is made; it’s up to you to determine if that’s how you want your business to operate.
Rights to the intellectual property
Final ownership of the work can be part of an agreement between a client and a freelancer. Some freelancers choose to include a clause that states the ownership of the work is only transferred to the client upon full and final payment for the work.
Terms related to payment due date and late payment
Your contract template should have clear payment terms, with a fixed date for payment, which is usually a two-week timeframe. This clause is then reflected on the invoices that you issue as well.
And be sure there is a clause for late payment and fees associated with it. That doesn’t just mean a dispute resolution clause. You should specify exactly what happens in the event that you don’t get paid. That could include not doing any further work, if it’s a large project with several payment milestones, or it could be a percentage tacked on to the final amount, reflecting each month of non-payment.
You can even include a clause about debt collection, with the cost being absorbed by the client.
An “out” clause
It’s important to protect yourself in the event of a project or contract ending early. As a freelancer, you’ll be spending valuable time doing work, and if the client decides to end the contract before you’re finished, you should be compensated for that time. You can include a prorated amount for the time worked, or have a flat fee as part of your contract template.
When to use a contract template?
Once you have created a quality contract template, you can use it any time you are entering into an agreement with a client. It can be used for project work, a retainer relationship, or any other type of work that you’ll undertake.
Contract templates vs agreement templates
While many consider the terms contract and agreement to mean the same thing, they actually are not the same.
A contract has specific terms and conditions, and once signed, becomes a legally binding document that can be enforced by law.
An agreement is more like an understanding, or a “handshake deal,” that isn’t as enforceable.
So it’s important when drafting your contract template that you use the term “Contract” as the heading for the document.
A note on paper vs electronic contract templates
In the past, contracts were printed, signed and filed in a paper format. A freelancer would meet with a client to discuss the work, a contract would be finalized - sometimes over the course of several in-person meetings - and then the parties would gather again to sign the contract.
But now, legal documents such as contracts have digitized along with most other business functions. With freelancers often working remotely, sometimes never meeting clients, this has opened doors to securing work all over the world. And laws have followed suit by allowing for e-signatures to create a legally binding electronic document.
Using an electronic contract makes freelance work so much easier and more efficient for both sides. It allows for such remote work to be possible, and it saves time and money compared to a paper system. And if you have an airtight contract template, you save even more time by having a contract ready in mere minutes.
Advantages of contract templates
Done properly, there are many advantages to using contract templates.
Once a contract template is vetted by a legal professional, it provides the peace of mind that comes with knowing a contract is valid and binding. A good template will include the proper terms and language, making it easy for your client to understand and agree to the terms.
A good template also provides consistency. If you do repeat work for a client, they’ll know what to expect when a draft contract is sent to them.
A good template allows you to spend less time drafting a contract, meaning you can get it to the client faster, get it signed faster, and get to work faster. All of that leads to cash flow for your business, as well as more time for you to do what you love.
A good, quality contract will send a positive message to clients about your business. They’ll find it clear and easy to understand, while also being professional and legally binding.
Disadvantages of contract templates
There can be disadvantages to using a contract template, however. For instance, if you choose a poor template, you’ll be repeating the same mistakes every time you prepare a contract for a project or a client.
Take a look at the following examples, which is when contracts can be misinterpreted, or even disputed, leading to non-payment for your work or even legal issues.
If you keep using that poor contract template, you’ll run into issues with multiple clients, which could turn into lack of cash flow, dissatisfied customers and possibly even legal problems for your business. You don’t want to go down that road, as the end result could be less work for you and your business and lawyer bills.
Therefore, it’s important to choose a clear, high quality contract template, and to have good processes to update them with the relevant information based on the work.
Why are Bonsai’s automatically generated contract templates better?
Running a freelance business means wearing a lot of different hats, which takes time and energy. Administrative tasks take time away from your creative work, but they’re absolutely vital to do properly. In the instance of creating contracts, you need to make sure you include the right terms and have them vetted by legal expertise.
Building a contract template is worth taking the time to do right, and using Bonsai’s automatically generated contract templates will do that for you.
Rather than risk improper wording, leading to late payment or even legal disputes, give yourself the peace of mind that comes with knowing your contracts are airtight and legally secure. Your clients will be just as glad knowing you have a fool-proof contract system.
How to create contract templates using Bonsai?
It’s easy to use Bonsai to create contracts, including custom contract templates that you can use time and again.
Create an account
First, set up a Bonsai account. The only information you need to enter is your name and email address.
Click on "create contract"
Once signed into Bonsai, you can jump right into creating a contract by going to your Dashboard and choosing create a contract.
Choose your industry
That takes you right to the first step in creating a contract, including a drop-down menu where you select your industry.
Fill in the project details
Make sure you also insert a client name, type of project, choosing standard template, and then selecting template type. For this example, we are using a sample client, and a blog post contract template for a freelance writing business.
Enter basic information
The next step will walk you through information for the contract, starting with your location, including which state in the United States.
You select whether you work through a company, and if you do, there are different company structures from which to choose, and then you insert the company name and your title.
Describe the scope of work
Based on the choice of a writer doing a blog post, this section is auto-populated, but you can easily change the contents to describe what you will be doing for the client.
You can also attach a statement of work, which is another time-saver. You can have a variety of your standard work tasks saved and ready to be attached, which makes the contracts simple and easy to do, and any in-depth details about the work can be in the statement of work document.
Include payment details
You can choose from a multitude of payment options, including a flat fee, milestones, and hourly, daily, weekly and monthly rates.
If you choose milestones, for instance, you then add the amount and add the milestone dates, with the option to add as many as you need. If you choose hourly, you insert your rate. It’s so simple and flexible.
Integrate your invoices
In the final step, you reap even greater benefits from the Bonsai system, because the contract you just created, complete with payment terms, is integrated with an invoicing system. That means your invoices are already done based on the contract.
You have the flexibility to decide whether or not you want the system to create the invoices, and whether or not you want them sent automatically. As stated, you can always review and edit them before they’re sent.
Sign the contract
Once you’ve made all the edits and you’re ready to finalize the contract, sign contract is the final step.
Then, you will simply type in your name, and a signature is created with your email address below it.
You’re then ready to send the contract to your client. When they receive it, there’s a section for them to sign next to your e-signature, with the legal binding statement that means it’s official. You can start your work.
Save as PDF
But you can do more, by choosing the More Options drop-down menu. If you haven’t yet sent the contract, you can un-sign it and edit it. You can duplicate it, delete it, and download it as a PDF.
If you choose View Project, you’ll get a dashboard that displays an overview, including the client’s name, invoices, time tracking and more.
And, perhaps best of all, you can turn this contract into a contract template. Then you’ll be able to use this work time and again, for various clients and projects.
As always, if you have any questions or run into any problems, there’s always a “Contact Support” button available to you, where there are options for chat support, or to access the knowledge base. You can ask for help, find the answer yourself, see a list of the latest changes to Bonsai, and even have a chance to request and vote on features, where you can provide feedback or request the addition of a specific function.
This is just another example of how easy it is to use Bonsai for the important yet time-consuming administrative aspects of running a freelance business. With the ability to create contracts, connect them to invoicing, and turn them into templates, now is the perfect time to join the Bonsai community by signing up for a free trial.
Bonsai vs generic contract templates
While it may be free to download and use a generic contract template from an online source, or to create your own contract template, it’s also time-consuming and could include costly errors.
Instead, get your money’s worth when using Bonsai to handle your contract templates, and all other back office tasks. You should take your contracts to the next level if you’re serious about your consulting or freelancing business. And, your contracts will be integrated with your other administrative tasks, like invoicing.
Here’s what you get for spending $19 / month on Bonsai:
Create, customize and send professional contracts quickly.
Create contracts specific to your industry.
All the important and relevant terms are included, like payment terms and an out clause.
It’s simple to edit terms, client name, business format and more.
All the Bonsai contracts have been reviewed by top contract lawyers.
A legally binding format makes it easy for you and the client to agree online.
It’s easy to save your work as a template for use again and again.
The system will create invoices connected to your contract, making necessary administrative tasks even easier.
At Bonsai, we recommend ALL freelancers to protect their time like it’s the most important thing in the world. Otherwise, it’ll consume you.
Signing the contract and E-signatures
So what about signing the contract, particularly in those instances where you and your client live in different locations and can’t meet? If an electronic contract template will serve your needs, how do you both sign it to create a legally binding document?
To deal with remote work, your contract template can have a page dedicated to signatures, with space for your signature and the client’s signature.
In that instance, you could:
- Print the signature page
- Sign it yourself
- Scan it and email it to the client
- Have the client print the page
- Have the client sign it
- Have the client scan the document
- Have the client keep the document for themselves and send an electronic version to you.
This is more convenient, quicker and cheaper than mailing, but there’s a better solution: an e-signature.
An electronic signature is when an image of your signature is overlaid on a PDF document. It can be accomplished with a variety of different apps, and used on a variety of platforms. The technology allows you to add your signature to a PDF document.
That’s not the same as a digital signature, which is “cryptographically” secure and includes what’s known as a private signing key that verifies you have seen the document and authorized it.
For the purposes of a contract to undertake freelance work, an e-signature is legally binding and sufficient for you and your clients. The “E-Sign” Act (Electronic Signatures In Global And National Commerce Act) of 2000 provides a “general rule of validity for electronic records and signatures.”
To accomplish an e-signature, you’ll have to follow specific steps depending on the platform which you use to work. For instance, there are certain steps for Windows or Mac computers, and for iPhones and iPads or Android products.
Once you get that done, you can use it as the final step in completing a contract with a client. Many businesses will be familiar with and use e-signatures, or your client may wish to follow the print-sign-scan-email steps, in which case you sign the document first and leave it to the client to complete.
And then there are systems that include an e-signature as part of a contract template, such as the Bonsai suite of freelance services.
Other contract template categories
Now you know about contracts and contract templates, which help make the task easy, convenient and efficient.
You can also consider the option of the integrated tools available to you as part of Bonsai’s freelance suite by signing up for a free trial now.