A freelance contract establishes working terms between a freelancer (or “contractor”) and a person or company that requires their services. A clear freelance contract helps both sides understand what to expect from each other, so projects get sent in on time and payments are made promptly.
1. What is a Freelance Contract?
A freelance contract is a document sent by an employer to a freelancer that explains the terms of their working relationship. It sets clear expectations between the two parties for a specific project over a set period of time. This type of document is legally binding and ensures that everyone working on a given task is on the same page in terms of service guidelines.
General terms in a freelance contract
A freelance contract normally addresses the following elements:
- The names of those involved in the project
- Details about the services delivered and the expectations for both parties
- Specific dates for the work
- Terms of payment
- Legal clarification of the contractor’s role
Other names for freelancer contracts
A freelance contract is also known as a:
- Client/Service Freelancer Agreement
- Company Contractor Agreement
- Contractor Agreement
- Freelancer Agreement
- Freelancer Contractor Agreement
- Independent Consultant Agreement
- Independent Contractor Agreement
Freelance Contract Sample
The sample freelance contract below shows what a standard one looks like:
Freelance Contract
| State of __________
|
Rev. 133EE8E |
| FREELANCE CONTRACT | |
This Freelance Contract (this “Agreement”) is made as of this ___ day of ___________, 20___, (the “Effective Date”) by and between __________ located at __________, __________, __________ __________ (“Client”) and __________ located at __________, __________, __________ __________ (“Independent Contractor”). Client and Independent Contractor may each be referred to in this Agreement as a “Party” and collectively as the “Parties.”
- Services. Independent Contractor shall provide the following services to Client (the “Services”): _________________________________________________________________________________________________________________________________________________________________. In addition, Independent Contractor shall perform such other duties and tasks, or changes to the Services, as may be agreed upon by the Parties.
- Compensation. Inconsideration for Independent Contractor’s performance of the Services, Client shall pay Independent Contractor: (Check one)
☐ A Fixed Wage. Client shall pay Independent Contractor $_______ ☐ per hour ☐ per week ☐ per month ☐ per year ☐ other: __________. Independent Contractor will be paid: (Check one)
☐ Weekly. Independent Contractor will be paid on __________ [Day of the week] of every week.
☐ Monthly. Independent Contractor will be paid on the __________ [Day of the month] of every month.
☐ After Independent Contractor sends Client an invoice. Independent Contractor will be paid within __________ days after receiving Independent Contractor’s invoice. Independent Contractor will submit invoices for payment ☐ at the end of every week ☐ on the __________ [Day of the month] of every month ☐ within __________ days after completion of the services ☐ other: __________.
☐ Other: __________.
☐ A Set Fee. Client shall pay Independent Contractor $_______: (Check one)
☐ After Independent Contractor completes the Services.
☐ After Independent Contractor sends Client an invoice. Client shall pay Independent Contractor within __________ days after receiving Independent Contractor’s invoice. Independent Contractor will submit invoices for payment ☐ at the end of every week ☐ on the __________ [Day of the month] of every month ☐ within __________ days after completion of the services ☐ other: __________.
☐ Other: __________.
☐ After Completing Certain Milestones. Client shall pay Independent Contractor according to the following schedule: $_______ for __________ [Milestone]. $_______ for __________ [Milestone]. Independent Contractor will be paid: (Check one)
☐ After the completion of each milestone.
☐ After Independent Contractor sends Client an invoice. Client shall pay Independent Contractor within __________ days after receiving Independent Contractor’s invoice. Independent Contractor will submit invoices for payment ☐ at the end of every week ☐ on the __________ [Day of the month] of every month ☐ within __________ days after completion of the services ☐ other: __________.
☐ Other: __________.
☐ Other. __________
- Expenses. (Check one)
☐ Client shall reimburse Independent Contractor for expenses. Except as otherwise specified in this Agreement, Client shall reimburse Independent Contractor for all pre-approved, reasonable and necessary costs and expenses incurred in connection with the performance of the Services.
☐ Client shall NOT reimburse Independent Contractor for expenses. All costs and expenses incurred by Independent Contractor in connection with the performance of the Services shall be the sole responsibility of and paid by Independent Contractor.
- Term and Termination. Independent Contractor’s engagement with Client under this Agreement shall commence on ___________, 20___. The Parties agree and acknowledge that this Agreement and Independent Contractor’s engagement with Client under this Agreement shall terminate: (Check one)
☐ Upon the completion by Independent Contractor of the Services.
☐ After ___________ ☐ months ☐ days ☐ other: ___________.
☐ On ___________, 20___.
☐ At will. Independent Contractor acknowledges and agrees that the engagement with Client is at will, subject to being terminated at the discretion of Client at any time,
At the time of termination, Independent Contractor agrees to return all Client property used in performance of the Services, including but not limited to computers, cell phones, keys, reports and other equipment and documents. Independent Contractor shall reimburse Client for any Client property lost or damaged in an amount equal to the market price of such property.
- Independent Contractor. The Parties agree and acknowledge that Independent Contractor is an independent contractor and is not, for any purpose, an employee of Client. Independent Contractor does not have any authority to enter into agreements or contracts on behalf of Client, and shall not represent that it possesses any such authority. Independent Contractor shall not be entitled to any of Client’s benefits, including, but not limited to, coverage under medical, dental, retirement or other plans. Client shall not be obligated to pay worker’s compensation insurance, unemployment compensation, social security tax, withholding tax or other taxes or withholdings for or on behalf of the Independent Contractor in connection with the performance of the Services under this Agreement. Nothing contained in this Agreement shall be deemed or construed by the Parties to create the relationship of a partnership, a joint venture or any other fiduciary relationship.
- Confidentiality. (Check one)
☐ Independent Contractor will NOT be exposed to confidential information.
☐ Independent Contractor will be exposed to confidential information.
- Confidential and Proprietary Information. In the course of performing the Services, Independent Contractor will be exposed to confidential and proprietary information of Client. “Confidential Information” shall mean any data or information that is competitively sensitive material and not generally known to the public, including, but not limited to, information relating to development and plans, marketing strategies, finance, operations, systems, proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, data, databases, inventions, know-how, trade secrets, customer lists, customer relationships, customer profiles, supplier lists, supplier relationships, supplier profiles, pricing, sales estimates, business plans and internal performance results relating to the past, present or future business activities, technical information, designs, processes, procedures, formulas or improvements, which Client considers confidential and proprietary. Independent Contractor acknowledges and agrees that the Confidential Information is valuable property of Client, developed over a long period of time at substantial expense and that it is worthy of protection.
- Confidentiality Obligations. Except as otherwise expressly permitted in this Agreement, Independent Contractor shall not disclose or use in any manner, directly or indirectly, any Confidential Information either during the term of this Agreement or at any time thereafter, except as required to perform the Services or with Client’s prior written consent.
- Rights in Confidential Information. All Confidential Information disclosed to Independent Contractor by Client (i) is and shall remain the sole and exclusive property of Client, and (ii) is disclosed or permitted to be acquired by Independent Contractor solely in reliance on Independent Contractor’s agreement to maintain the Confidential Information in confidence and not to use or disclose the Confidential Information to any other person. Except as expressly provided herein, this Agreement does not confer any right, license, ownership or other interest in or title to the Confidential Information to Independent Contractor.
- Irreparable Harm. Independent Contractor acknowledges that use or disclosure of any Confidential Information in a manner inconsistent with this Agreement will give rise to irreparable injury for which damages would not be an adequate remedy. Accordingly, in addition to any other legal remedies which may be available at law or in equity, Client shall be entitled to equitable or injunctive relief against the unauthorized use or disclosure of Confidential Information. Client shall be entitled to pursue any other legally permissible remedy available as a result of such breach, including but not limited to, damages, both direct and consequential. In any action brought by Client under this Section, Client shall be entitled to recover its attorney’s fees and costs from Independent Contractor.
- Ownership of Work Product. The Parties agree that all work product, information or other materials created and developed by Independent Contractor in connection with the performance of the Services under this Agreement and any resulting intellectual property rights (collectively, the “Work Product”) are the sole and exclusive property of: (Check one)
☐ Client. The Parties acknowledge that the Work Product shall, to the extent permitted by law, be considered a “work made for hire” within the definition of Section 101 of the Copyright Act of 1976, as amended, (the “Copyright Act”) and that Client is deemed to be the author and is the owner of all copyright and all other rights therein. If the work product is not deemed to be a “work made for hire” under the Copyright Act, then Independent Contractor hereby assigns to Client all of Independent Contractor’s rights, title and interest in and to the Work Product, including but not limited to all copyrights, publishing rights and rights to use, reproduce and otherwise exploit the Work Product in any and all formats, media, or all channels, whether now known or hereafter created.
☐ Independent Contractor. Independent Contractor grants to Client a limited, non-exclusive license to use the Work Product. The Work Product is to be used only by Client, and Client may not assign, transfer, lease or sublicense any Work Product to any person or entity without Independent Contractor’s prior written consent.
- Insurance.(Check one)
☐ For the term of this Agreement, Independent Contractor shall obtain and maintain a policy of insurance, with appropriate and adequate coverage and limits, to cover any claims for bodily injury, property damage or other losses which might arise out of any negligent act or omission committed by Independent Contractor or Independent Contractor’s employees or agents, if any, in connection with the performance of the Services under this Agreement.
☐ Independent Contractor is NOT required to maintain a policy of insurance.
- Non-Compete.(INITIAL if you want to include this clause. CROSS OUT if you do not.)
______ Independent Contractor agrees and covenants that during the term of this Agreement, and for a period of ___________ months following the termination of this Agreement, Independent Contractor will not, directly or indirectly, perform or engage in the same or similar activities as were performed for Client for any business that is directly or indirectly in completion with Client.
- Non-Solicit. (INITIAL if you want to include this clause. CROSS OUT if you do not.)
______ Independent Contractor agrees and covenants that for a period of ___________ months following the termination of this Agreement, Independent Contractor will not, directly or indirectly, solicit any officer, director or employee, or any customer, client, supplier or vendor of Client for the purpose of inducing such party to terminate its relationship with Client in favor of Independent Contractor or another business directly or indirectly in competition with Client.
- Mutual Representations and Warranties. Both Client and Independent Contractor represent and warrant that each Party has full power, authority and right to execute and deliver this Agreement, has full power and authority to perform its obligations under this Agreement, and has taken all necessary action to authorize the execution and delivery of this Agreement. No other consents are necessary to enter into or perform this Agreement.
- Independent Contractor Representation and Warranties. Independent Contractor represents and warrants that it has all the necessary licenses, permits and registrations, if any, required to perform the Services under this Agreement in accordance with applicable federal, state and local laws, rules and regulations and that it will perform the Services according to the Client’s guidelines and specifications and with the standard of care prevailing in the industry.
- Indemnification. (INITIAL if you want to include this clause. CROSS OUT if you do not.)
______ The Independent Contractor shall indemnify and hold harmless Client from any damages, claims, liabilities, loss and expenses, including reasonable attorney’s fees, arising out of any act or omission of Independent Contractor in performing the Services or the breach of any provision of this Agreement by Independent Contractor.
- Governing Law. The terms of this Agreement and the rights of the Parties hereto shall be governed exclusively by the laws of the State of __________, without regarding its conflicts of law provisions.
- Disputes. Any dispute arising from this Agreement shall be resolved through: (Check one)
☐ Court litigation. The dispute shall be resolved in the courts of the State of __________.
Attorneys’ Fees
☐ If either Party brings legal action to enforce its rights under this Agreement, the prevailing party will be entitled to recover from the other Party its expenses (including reasonable attorneys’ fees and costs) incurred in connection with the action and any appeal.
☐ Arbitration. The dispute shall be resolved through binding arbitration conducted in accordance with the rules of the American Arbitration Association.
☐ Mediation. The dispute shall be resolved through mediation.
☐ Mediation then arbitration. The dispute shall be resolved through mediation. If the dispute cannot be resolved through mediation, then the dispute will be resolved through binding arbitration conducted in accordance with the rules of the American Arbitration Association.
- Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
- Assignment. The interests of Independent Contractor are personal to Independent Contractor and cannot be assigned, transferred or sold without the prior written consent of Client.
- Entire Agreement. This Agreement constitutes the entire agreement between the Parties hereto with respect the subject matter hereof, and supersedes all prior negotiations, understandings and agreements of the Parties.
- Amendments. No supplement, modification or amendment of this Agreement will be binding unless executed in writing by both of the Parties.
- Notices. Any notice or other communication given or made to either Party under this Agreement shall be in writing and delivered by hand, sent by overnight courier service or sent by certified or registered mail, return receipt requested, to the address stated above or to another address as that Party may subsequently designate by notice, and shall be deemed given on the date of delivery.
- Waiver. Neither Party shall be deemed to have waived any provision of this Agreement or the exercise of any rights held under this Agreement unless such waiver is made expressly and in writing. Waiver by either Party of a breach or violation of any provision of this Agreement shall not constitute a waiver of any subsequent or other breach or violation.
- Further Assurances. At the request of one Party, the other Party shall execute and deliver such other documents and take such other actions as may be reasonably necessary to effect the terms of this Agreement.
- Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in whole or in part, the remaining provisions shall not be affected and shall continue to be valid, legal and enforceable as though the invalid, illegal or unenforceable parts had not been included in this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first written above.
| Client Signature | Client Full Name |
| Independent Contractor Signature | Independent Contractor Full Name |
2. When Do I Need a Freelance Contract?
You need a freelance contract for a single project over a clear time frame, as opposed to a permanent, general work relationship. A company also may not involve the freelance worker as an official part of the company. Note that this type of worker is not the same as a temporary worker, or “temp,” which are often placed at a company through an independent staffing agency to fill a position for a short period of time — such as during an employee’s maternity leave. Temporary workers are technically employees of the staffing agency, whereas independent contractors are self-employed.
Independent contractors will generally cost a company less money than an employee does because they do not receive traditional work benefits such as health care, vacation pay, sick pay, or retirement.
Independent contractors usually work on their own schedules and are not expected to come into an office. Unlike salaried workers, freelance workers have no upward limit on their potential earnings. They are, however, expected to pay for out-of-pocket expenses unless approved by the company.
A company’s insurance does not cover the contractor, making freelancers responsible for obtaining their own insurance.
3. Consequences of Not Using a Freelance Contract
Without a freelance agreement, expectations of the freelancer and their required services may be unclear. It is imperative that both an independent contractor and their client have a common understanding of the scope of the project so as to avoid confusion or extra work.
In addition, a freelance contract establishes to the IRS that the worker is not an employee of the company. Otherwise, the company may be expected to cover the individual’s Medicare and social security taxes, as well be responsible for as any liabilities that may arise from the project.
There are serious consequences of misclassifying a freelancer as an employee and vise versa, including large fines and even potential jail time. It’s crucial that you understand the distinction between an independent contractor vs employee and the implications for yourself and/or your business.
Consequences for the contractor
- Loss of payment
- Loss of time
- Stolen work
- Freelance workers may incur a fine for not disclosing accurate earnings information on their personal income tax return
Consequences for the hiring company
- Loss of money, particularly in unanticipated expenses
- Loss of time
- Legal expenses, including lawsuits
- Breach of company information
A 1099 form marks self-employment earnings for the IRS. If a freelance worker earns more than $600 from a company, they will receive a 1099 form. You can find instructions regarding this legal requirement on the IRS’s website.
Freelance workers cannot have employees, but they can delegate work to other independent contractors.
There are many legal guidelines that a company must be aware of in order to treat their workers fairly. The Department of Labor’s website has a clear explanation of the major employment laws in the US.
4. Common Uses of a Freelance Contract
A freelance contract has a wide variety of uses. There are many types of short-term projects that an individual worker can complete for a company. These are situations in which there is a specific task that the client needs the contractor to complete.
- A magazine hires a journalist to write an article
- A small business hires a programmer to create a website
- A theater company hires an actor to perform in a play
- A think tank hires a speaker to deliver their conference’s keynote address
- A family hires a pet sitter to watch their dog while they are on vacation
- A couple hires a photographer for their wedding
- A company hires a marketing consultant to increase awareness of their brand
- An office hires a plumber to fix leaky pipes
- A mother hires the next-door neighbor to watch her child for the evening
- A student hires a tutor to help them study for the SAT
If it seems like there’s a huge range of freelance jobs, you are right: contract workers are a growing part of the population. A 2018 poll by NPR and Marist found that one in five American jobs are carried out by an independent worker.
Interestingly, many independent contractors today actually work for a single client, as opposed to multiple clients, due to in-depth projects or work agreements. However, under the Fair Labor Standards Act, these works still do not receive employee benefits including overtime pay.
According to the Harvard Business Review, misclassification of employees as contractors has resulted in major wage losses for workers.
Companies usually look to freelance workers for projects that will not require extensive training or use of company equipment.
5. What to Include in a Freelance Contract
A freelance agreement should detail the following specifications:
1. The names of the hiring company and the independent contractor
2. The services that the contractor will provide the client
- What components must be included? What is the scope of the project? What does it seek to accomplish?
- How will the work be submitted? You may wish to specify whether the file should be submitted as a PDF or a Word document, for example. Is there a file-sharing website the client wishes to use?
- Is there a non-disclosure agreement or other confidentiality form? Will the client be granted exclusivity to the contractor’s work? Note that a freelance worker has different intellectual property rights than an employee does.
- What are the client’s responsibilities? Are there guidelines for if the client wishes to change the project once it is underway?
- You may wish to include services that are not provided in order to ensure clarity.An explanation of the services that the contractor will provide the client:
3. Mutually agreed-upon project schedule with specific dates
- Are there multiple deadlines? Is there a certain time the project must be completely finished? Does the worker need to come to particular meetings?
4. Compensation
- How much will the client pay the contractor? What is the rate of payment?
- How and when will the client send the payment?
- Is there a baseline payment guarantee should the project be canceled part of the way through?
5. A clarification of your legal relationship
- Why is the work being completed by an independent contractor as opposed to an employee? This helps make it clear to the IRS that the company will not pay for the same work benefits for the worker as the company would for an employee.
- The contract has a binding effect to make sure that the work gets completed.
- Is the worker at will? Are there circumstances by which the relationship may be terminated?
In addition to signing a freelance contract, it may also be necessary for you to sign a non-disclosure agreement.