Independent contractors need contracts that suit their work and protect their business from any future misunderstandings or other issues, such as early terminations. In this post, we’ll highlight five tips for writing these forms, including the benefits of an independent contractor agreement template.
1. Use Clear Language
No contract should get bogged down in legal jargon or vague half-promises. This document will decide if and when you get paid for your work; don’t take any chances.
Neither side should sign anything they don’t understand. If the client tries to add a clause that’s unclear or confusing, ask them to rephrase. It’s better to be upfront than to sign and realize your mistake later.
In addition, unclear language is hard to enforce. For example, any section about payment has to be specific, giving exact dates if possible, rather than simply saying you’ll be paid eventually.
2. Consider Contract Templates
Some sites offer low-cost or even free independent contractor forms, ones you can customize to fit your work. You can specify the exact services you offer, and even set your own clear payment terms.
These templates already use plain language that’s sure to hold up in court. This means if you do enter into a dispute with your client, you’ll know your agreement backs you up. You’re also able to put these forms together in minutes.
These sites let you pick your industry and ask questions about the contract you’ll need. This lets you get a tailored agreement that you can present to your client, though you should still consider customizing it further to be more specific.
3. Add Custom Clauses
Including bespoke sections in your contract lets you make it your own and gives you more of an opportunity to protect yourself. Here are just seven extra clauses worth thinking about:
Scope Creep Clause
Make it clear where your work starts and ends, or give an hourly rate for miscellaneous tasks. Some clients push their contractors by giving them extra unpaid work, taking time away from their actual services.
Kill Fee Clause
You should still get paid even if the client kills the project partway through. Ask for 25% of your full project fee, or to be paid in full for the hours worked to that point — whichever’s higher.
Client Delay Clause
You also deserve payment if the client’s delays slow down your timeline or stop you from taking on other work. You might even consider adding a set restart fee for resuming after a pause.
Late Payment Clause
Around 85% of freelancers have faced late payments at some point. You shouldn’t be afraid to charge a late fee of 1-2% of your invoice total; this alone can push your clients to pay sooner.
IP Rights Clause
Your contract must outline who owns the final deliverables and if you can add them to your work portfolio. If your services are “work for hire,” the client only owns the work once they pay you.
Rush Fee Clause
Some clients rush their contractors with last-minute jobs and tasks. Consider adding a rush fee, where work without at least 24+ hours’ notice comes with a surcharge of at least 25%.
4. Avoid Disguised Employment
You have to keep a clear separation between being a contractor and being an employee. Some clients deliberately muddy the waters, hoping to get a full-time employee without paying you the benefits you’re owed.
Here are some signs that a contract might be leading you towards disguised employment:
- Strict control over your working hours or days off
- No ability to take work for other clients
- Not allowed to use your own tools or equipment
- More focus on time commitment than deliverables
- Not allowed to delegate or subcontract the work
Don’t accept a situation like this unless the client is willing to hire you full-time. Even then, you’ll have to consider if this is what you want — after all, you likely went freelance for a reason.
5. Approach Disputes Carefully
You should stick up for yourself in a client dispute, but you must avoid burning bridges wherever possible. Fracturing your relationship with a big client in the heat of the moment could harm your business’s longevity.
Your contract should have a dispute resolution section that prioritizes informal resolutions. If this doesn’t work, try mediation; this gives you a semi-casual space to discuss your grievances and hopefully reach a compromise.
A clear contract helps you avoid most disputes by clarifying payment terms and other potentially contentious issues. However, if a dispute escalates beyond mediation, you might have to opt for arbitration, which includes a legally binding decision.
Final Thoughts
Your contract must go beyond a default template; it needs clauses that advocate for your rights and your freelancer status. This is the only way to guarantee you aren’t forced into an unfair arrangement that deprives you of money you’re owed.
