Free Freelance Contract

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.

Table of Contents

• What is a Freelance Contract?
• When Do I Need a Freelance Contract?
  • Common Uses of a Freelance Contract
• Consequences of Not Using a Freelance Contract
• What to Include in a Freelance Contract
• Freelance Contract FAQs

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 document type is legally binding and ensures that everyone working on a given task is on the same page regarding service guidelines.

What is a freelancer?

A freelancer is an individual that works on one-off projects or tasks for businesses and organizations and is not committed to a particular employer on a long-term basis. Freelancers are generally self-employed and typically have multiple clients at one time and earn income per project. They are not company employees, and most freelance work is short-term.

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:

2. When Do I Need a Freelance Contract?

You need a freelance contract for a single project over a clear time frame instead of a permanent, general work relationship. A company also may not involve freelance work as an official part of the company.

Note that this type of worker is not the same as a temporary or “temp,” who is often placed at a company through an independent staffing agency to fill a position for a short period, such as during an employee’s maternity leave. Temporary workers are technically staffing agency employees, whereas independent contractors are self-employed. You can also hire temporary employees using a temporary or fixed-term employment contract.

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 enter 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.

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 is 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 workers still do not receive employee benefits, including overtime pay.

According to the Harvard Business Review, misclassifying 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 company equipment.

3. Consequences of Not Using a Freelance Contract

Without a freelance agreement, expectations of the freelancer and their required services may be unclear. Both an independent contractor and their client must have a common understanding of the project’s scope 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 and be responsible for any liabilities arising from the project.

There are serious consequences for misclassifying a freelancer as an employee and vice versa, including large fines and potential jail time. You must understand the distinction between independent contractors and employees 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. A freelance worker earning more than $600 from a company will receive a 1099 form. You can find instructions regarding this legal requirement on the IRS’s website.

Freelance workers cannot have employees but delegate work to other independent contractors.

There are many legal guidelines that a company must be aware of to treat its workers fairly. The Department of Labor’s website clearly explains the major employment laws in the US.

4. What to Include in a Freelance Contract

A freelance agreement should detail the following specifications:

• Description of work and services -What components must be included? What is the scope of the project? What does it seek to accomplish? You may wish to include services that are not provided to ensure clarity. An explanation of the services that the contractor will provide the client.
• Pricing and rates – How much will the client pay the contractor? Will it be paid according to an hourly or fixed price for the project?
• Payment terms and schedule– How and when will the client send the payment? Should the project be canceled part of the way through, is there a baseline payment guarantee? Will the freelancer receive an upfront deposit? Will there be a late payment fee?
• End product ownership rights and licenses (copyrights) – Will the client be granted exclusivity to the contractor’s work? Or will a license be used? Note that a freelance worker has different intellectual property rights than an employee.
• Terms and termination – Is the worker at will? Are there circumstances by which the relationship may be terminated? Will there be any expenses or penalties if the contract is terminated early?
• Competitive engagements – Will the freelancer work with any competing business or service of the client? Will there be an exclusivity duration?
• Non-disclosure, right to disclose, and confidentiality – Is there a non-disclosure agreement or other confidentiality form?
• Changes and revisions – Are there guidelines if the client wishes to change the project once it is underway?
• Indemnity clause – Who is responsible if something goes wrong?
• Party signatures – Include signatures of all parties involved.

General terms in a freelance contract

A freelance contract normally addresses the following elements:

• The names of those involved in the project – include the names and contact details of the parties involved in the agreement.
• Details about the services delivered and the expectations for both parties – establish the project’s scope and what is expected of both parties.
• Specific dates for the work – Are there multiple deadlines? Is there a certain time the project must be finished?
• Legal clarification of the contractor’s role – Why is the work completed by an independent contractor instead of an employee? This helps clarify to the IRS that the company will not pay for the same work benefits for the worker as the company would for an employee.

Freelance Contract FAQs