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Starting a new freelance gig always feels exciting. You can utilize your skills and earn a living. You are thrilled to begin this journey. However, before you dive in, you must be well-versed in contracts that contain the terms of your engagement as a freelancer. I have seen many freelancers skip this part or rush through it. They think it’s just paperwork. They end up making this mistake.
The contract is not a formality. It defines the scope of work, remuneration, and expectations. Simply, it protects your time, energy, and rights. A poorly negotiated contract is a pain. These are the kinds of freelance contract mistakes that can cost you dearly.
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Let me start with a quick story. A freelance logo designer I knew got a gig with a new client. They agreed on a project. She started working right away. She did not read the contract carefully. There was no clear payment schedule. She finished the work. She requested the client to make the payment. The client kept promising. She never received the payment.
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This is what happens when payment schedule or details are missing, vague, or weak. When reviewing a contract, carefully read the terms related to payment. Ask these simple questions. When will I get paid? How much will I get paid? What happens if they pay late?
According to Freelancers Union, every freelancer should have payment terms, deliverables, and timelines clearly written out before starting a project.
When freelancer payment terms aren't clearly spelled out, you leave too much to chance-and that can lead to non-payment or endless delays.
Take these steps at the very outset. Define a clear timeline for payments, such as every two weeks or upon completion of a project milestone. Set a due date for each invoice, e.g., seven business days. Add a clause stating a late fee will be applied if the client fails to make payment on time, e.g., 1% per day as a penalty for late payment. Set a deposit upfront before you commence the work, e.g., 30% of the total remuneration.
Never start work without upfront payment. It protects you from wasting your energy, skills, and time on someone who might not be reliable.
Interestingly, I have seen freelancers doing double the work for the same paycheck. Clients can request that you make a minor change or adjustment. Then another. Then another. And then another. Before you realize it, you end up doing more than what you agreed to in the first place. To resolve this issue, your contract must clearly outline what you will do. It must clearly explain what you will not do. It must include the due date and the number of revisions allowed.
If the client requests additional services, the contract must clearly state that any work beyond the scope of the original freelance agreement clauses will require the signing of a new contract or payment of an additional fee.
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The devil is in the details. Details matter a great deal, and you must be specific, listing out every possible eventuality. What if the client unilaterally ends the project halfway? You have already worked hard. The question is, do you still get paid? Fairness demands that you must be paid for the work you have done. The world is not fair. Most of the contracts do not guarantee this. Some contracts let the client walk away even after you have put in tons of work. This is a problem because you have not read the agreement fully.
To fix this issue, you need a fair exit plan in your contract. The contract must contain a notice period for termination, e.g., seven business days' notice. You must ensure that it includes a clause stating that you will be paid for work done until termination. You can play more safely by having a cancellation fee, e.g., 25% of the total remuneration for services. This ensures your time, energy, and income are protected. As a freelancer, you must treat your freelancing business as such. Businesses need insurance in case things go south.
These were the three primary big red flags to look for. But there are a few more red flags you need to catch before signing that contract. For instance, you create an amazing work for a project. But who owns it? If the contract is silent, then the client owns everything.
In the U.S., creators generally retain ownership of their work unless a contract states otherwise. The U.S. Copyright Office outlines this in Circular 9 under the "Work made for hire" doctrine.
This might be troublesome, especially if client disputes arise over who holds the rights to your creative output. You must fix this before signing the contract with the client. The client retains ownership of the final work. You must include a term in the contract that allows you to retain the right to showcase the project in your portfolio.
Sometimes, contracts provide that if anything goes wrong, the freelancer is the one who pays, even if it’s the client’s fault. Resolve the issue by negotiating and including a mutual liability clause. The freelancer will be liable for their actions, while the client is responsible for their actions. Moreover, you can limit your liability to the cost of the project. This way, you are not stuck with a huge legal mess for a small gig.
If your contract does not contain an explicit dispute resolution clause, you could head straight to court. Going to court is expensive and time-consuming. Trust me, nobody wants that pain. There is a straightforward solution to this issue. Your contract can include a plan to mediate the dispute first. In the event mediation fails, the parties can go for arbitration. You must keep in mind that, most of the time, you can fix a bad contract by negotiating and asking good questions. This may allow you to ensure you are exposed to zero or minimal risks.
But this is not always the case. Negotiations allow you to walk away if the client won’t change completely unfair terms. A signed contract is like a commitment. Sign it only when you feel you are protected.
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Here are the final thoughts. Freelance work indeed sounds exciting. For you, a good contract is everything because it is your safety net. It is your navigator if things start to go south. So you must always read every word, ask questions, fix what feels unfair and wrong, and never feel bad about walking away from a dishonest client. Whether you're new to the field or experienced, freelance legal protection isn't optional—it's essential.