13 Key Terms Every Freelance Agreement Template Must Have
Are you freelancing, or are you hiring a freelancer? I'm telling you precisely what you must have in your freelance agreement template.
Working on a new project with someone is so exciting, but if you're anything like me, you want to ensure you (whether you're a freelancer or the client) are fully protected, get what you deserve and avoid misunderstandings so you can do more projects together long-term. As a lawyer myself sells a freelance agreement template for both freelancers and clients hiring freelancers, I am giving you all the crucial elements you need in your freelance agreement template.
You will learn about the essential terms your freelance agreement template must have, which you can use in your template (even if you are using a simple freelance contract template free of charge from someone else or a freelance agreement template pdf from Google).
After learning all about everything you need for your freelance agreement template, you will be able to protect your business, your energy and your money!
This post is all about the fundamental terms every freelance agreement template must have to protect your rights and business (and avoid misunderstandings).
Fundamental Freelance Agreement Template
Service agreement clauses you need in your freelance agreement template
Here are some important terms you must have in your freelance agreement template.
1. Scope of Work
First of all, the freelance agreement template should (the space to) include a detailed description of the services, specific tasks and deliverables the freelancer will provide to the client.
This is the part that causes the most misunderstandings and disputes because, often, this description is way too vague. It's both in the freelancer's and the client's interest to be as specific as possible about the services and deliverables.
For the freelancer, it's especially important to specifically include a section stating which services, tasks and deliverables are not included. Sometimes, certain services and deliverables are expected to be included in certain services or deliverables described by the client, while that is not the case ( or, at least, the freelancers do not see it that way).
2. Client Responsibilities
Not only should the freelance agreement template describe the freelancer's tasks and responsibilities, but also the responsibilities of the client. This is a cooperation in which you need to work as a team. Therefore, the client must make it as easy as possible for the freelancer to deliver what the client wants. Thus, the freelance agreement template should state that the client will provide the necessary information to the freelancer and do anything (within reasonableness) to facilitate what the freelancer needs.
3. What costs and expenses are covered
That brings me to the next crucial term in your freelance agreement template: the costs and expenses. The freelance agreement template should have an explicit clause on the costs and expenses that are covered or not.
If the client reimburses certain costs, the freelance agreement template should include those costs, preferably with the amounts for each cost where possible. As I said, you want to avoid as few misunderstandings and disputes as possible. That includes discussions about the amount of the costs.
Even if it's not the client's intention to reimburse any costs, the freelance agreement template should specify that the client reimburses no costs unless the client explicitly agrees to reimburse certain costs in writing. That way, there can also be no discussion about costs the freelancer assumes are covered by the client.
4. Hourly fee or fixed fee
An hourly fee or a fixed fee can be agreed on a weekly or monthly basis, depending on the type of work the freelancer is hired for.
If the freelancer receives a fixed weekly or monthly fee, the freelancer and the client should include the hours the freelancer is expected to work in the freelance agreement template.
Then you want to also specify whether any applicable taxes are included in the fee, and if not, who pays those taxes. This is especially important when the freelancer and the client are not registered in the same country.
It's also important to pay attention to the currency if the client and the freelancer are not registered in the same country.
5. Working hours
As a freelancer, you may want to specify the days and hours you shall work for each client in the freelance agreement template.
As the client, you have no interest in limiting the days you can ask the freelancer to perform work if the freelancer is paid hourly.
If the freelancer is paid a fixed fee, then you do want to specify when the freelancer will be performing work for you, as you expect the freelancer to at least perform the minimum number of hours on the days and during the hours specified.
6. Copyrights to the work created by the freelancer
Depending on the work the freelancer performs for the client, the freelancer may create intellectual property during the work performed by the freelancer.
For example, if a software developer writes code for the creation of software for the client, that code is intellectual property created by the developer. If a freelancer creates designs or content for the website or social media of the client, those designs and content are the intellectual property created by the freelancer.
The freelance agreement template should stipulate whether the copyrights to that intellectual property. If nothing is agreed upon, all intellectual property rights to anything the freelancer creates will generally remain with the freelancer.
Usually, the client will want to have the intellectual property rights to anything created by the freelancer for the client, so that should be explicitly agreed upon in the freelance agreement template.
7. Invoicing and payment terms
The freelance agreement template should include clear terms on when the freelancer will be paid.
If the freelancer works on an hourly basis, then the freelancer must send the client an invoice for the hours actually worked. Within how many days after receipt of the invoice should the client pay the freelancer?
If the freelancer is paid a fixed weekly or monthly fee, another option could be that the freelancer is paid that fixed fee in advance, which is preferable for the freelancer.
8. Payment method
Another important term for the freelance agreement template is the payment method. Certain payment methods carry higher transaction fees than others, which can make a huge difference in what is actually paid and received.
Especially if the freelancer is working in a different country, it's important to specify who pays for the transaction fees.
9. Confidentiality obligations of the freelancer
Not all work requires a freelancer to have access to top secret information of the client, but usually, the freelancer will receive some information that the client does not want to have shared with others, including the fee that the client pays to the freelancer.
Thus, both a trustworthy freelancer and the client will want to agree on keeping certain information confidential.
For the freelancer, it goes both ways. The freelancer may share methods and strategies of the freelancer that the freelancer does not want the client to share with others either. In that case, it's only fair that the confidentiality obligation goes both ways.
10. Term
It's also important to specify the term of the relationship.
A freelancer can be hired for an indefinite term until the client simply does not need the freelancer anymore. Then, it's important to specify the termination rights, which we'll get to next.
The freelancer can also be hired for a specific term, like for the duration of a project. I do not recommend concluding an agreement "for the term of the project" because it can be vague when a project ends. You do not want to have any misunderstandings and (eventually) disputes about when the project has ended.
So, in the case of a project, I would recommend concluding the contract for a certain term and extending the term (in writing) later if the project takes longer than necessary or concluding the agreement for an indefinite term and terminating the agreement when the project is finished.
11. Termination rights
The freelance agreement template should include termination options for different scenarios.
For example, if the agreement is concluded for an indefinite term, then both parties should be able to terminate the agreement at any time if the freelancer is paid on an hourly basis. In that case, you want to specify how many days' notice each party should give.
If the freelancer is paid a fixed fee on a weekly or monthly basis, then you might want the termination to take effect at a week's or month's end.
Suppose the freelance agreement is concluded for a specified (short) term, like for a project. In that case, the client might not want the freelancer to have the possibility to terminate the agreement prematurely. The freelancer may not want the client to terminate the freelance contract prematurely for no reason either.
Also, the freelance agreement template should include grounds for immediate termination for certain cases, like insolvency or unacceptable behaviour.
12. Indemnities and liabilities
Another important term that should be clear in the freelance agreement template is the limitation of liabilities.
The client will want to limit its liability as much as possible for any damages the freelancer may suffer. The freelancer will want to limit its liability as well.
But neither party can completely exclude their liability for everything, so the parties will limit their liabilities to the fees paid or the amount received from the insurer if either of them has liability insurance.
Also, what if the clients or customers of the freelancer's client make claims against the freelancer's client for work provided by the freelancer? Should the freelancer indemnify the client in those cases? (Exclusions of) Therefore, indemnities for third-party claims should also be included in the freelance agreement template.
13. Choice of court and arbitration
Another important term often overlooked is the choice of court or arbitration term.
Often, the party drafting the agreement will use its own country as the place for court proceedings or arbitration. But if you are located in a different country, you do not want to be dragged to the country of your client or freelancer in the case of legal proceedings.
Also, you don't want to choose a legal proceeding (court or arbitration) that might not even result in a decision that is enforceable in the country of your counterparty.
Whichever freelance agreement template you use should provide an explanation of which legal proceeding you should choose for each situation.
These were the basics that should be included in every freelance agreement template should have. However, there are more important terms which may be beneficial for specifically freelancers or clients that should be included, too.
If you are a freelancer, read my next blog post on the important terms a freelancer must have in a freelance agreement template.
Do you need a freelance work agreement template?
Are you in need of a freelance agreement template? I draft reusable freelance agreements for both freelancers and businesses hiring freelancers! My templates include all the crucial elements I discussed in the blog post (and more) that you can customise for each project.
If you are a freelancer, you need to get your freelancer-friendly template on this page of my contract shop!
If you are hiring a freelancer, you need to get your client-friendly template on this page of my contract shop!
Using a simple freelance contract template free of charge?
Suppose you don't want to purchase a freelance agreement template and would rather use a simple freelance contract template free of charge from someone else or a freelance agreement template pdf from Google. In that case, you can use the overview in this blog post to ensure that your free freelance agreement template includes all the essentials so you have the rights and protections you need as a freelancer or business owner hiring a freelancer!
This post was all about the crucial elements every freelance agreement template must have for freelancers and business owners hiring freelancers.
Get the freelancer-friendly freelance agreement template that includes all the essentials (and more) on this page of my contract shop!
Get the client-friendly freelance agreement template (also including all essentials) on this page of my contract shop!
If you are a videographer doing freelance projects, read this blog post on the 7 Essentials Every Freelance Videographer Needs in a Freelance Videographer Contract Template.
