For most freelancers, their most important contract, by far, is their terms of business. Sometimes referred to as 'terms and conditions' or occasionally a 'services agreement'. This is the document where you may stipulate:
How you work
What you agree to supply (including who gets to own the outputs of your work!)
What the fee is for your work
How fees should be paid
What you require from the client in order to deliver
Your cancellation policy
Why Do Creative Freelancers Need Terms Of Business?
Without a proper contract, freelancers can run into all sorts of problems. There may be disagreements over the deliverables and these can be hard to resolve if they were not already laid out in a written agreement. You may find project timescales move and make it difficult or even impossible for you to complete the work, or you may find that projects get cancelled entirely with no notice period and no fees paid for the time you have invested so far. You may also find that some clients struggle to pay your invoices on time, or even at all.
Terms of business set out rules for how you and your client will work together and if these terms are broken then you have a legal document to back you up when you contest this. Without this document, disputes and disagreements can be much harder to resolve. Not only can you lose out financially, but such things can cause stress and perhaps even knock your confidence or even make you question your decision to become self-employed.
As a self-employed individual myself, and being connected with a large number of creative freelancers, I’ve seen first-hand the effect that client disputes can have on my clients. In these cases, having client contracts to refer back to can make all the difference. Not only in resolving the issue but in assuring the freelancer that they have fulfilled their obligations and have a right to respond. Most often, such disputes don’t even make it to legal proceedings. Not if there is an air-tight contract in place, because no measured business person would risk paying legal costs if it’s likely they’ll lose. Moreover, terms of business work as a preventative tool because they are a reminder of the professional nature of the relationship and the obligations that the client and freelancer have to one another.
Yet, it can feel very awkward to present a new or returning client with terms of business. Many people have the unfortunate idea that it is beginning the relationship from a place of negativity. This can be difficult for some freelancers to overcome so they avoid this stage and proceed without having a signed agreement in place. Whilst a positive attitude is something to be admired though, you do need to be protecting yourself. After all, you wouldn't accept a job without an employment contract.
Most businesses will be used to signing agreements before working with creative freelancers and other suppliers. This is a necessary formality and actually, not having terms and conditions could make you appear unprofessional or naive. So, now that you know how important it is for creative freelancers to have terms of business in place, let’s look at what needs to be included:
How You Work
It is important to define your relationship with the client, especially to specify that you are not an employee but a contracted freelancer hired to carry out specific work for a limited time.
This is important for several reasons but tax obligations are one. As an independent contractor, you will be responsible for your tax and NI payments
What You Will Supply
Managing client expectations is crucial. Although it is not usually necessary to create a new contract for each client you work with, it’s likely your services will broadly amount to the same deliverables. For instance, you may work on an hourly rate or you may have a fixed rate for a project. You should specify what is included in this - A fixed amount of edits, for example. You may also use this part of the contract to define your process which may include discovery meetings, first drafts, edits and handover.
A photographer, for instance, may specify the length of a shoot, the time it will take to supply photographs and how many photographs will be included in the fee. They may also specify whether these will be high-resolution or low-resolution as well as if a second round of edits will be included as standard or will result in an additional cost.
Not only is defining your service deliverables important for your contract but it can also be valuable for a freelancer to set out a general way of working to ensure they have consistency. It can also make it easier for a creative freelancer to provide quotes and put together proposals if there is a standardised service delivery plan in place. Of course, this can still be amended and adapted to fit specific client requirements and project demands.
Fees And Rates
It is essential to specify what the client will pay for the work you undertake before you begin. This is a crucial part of your contract and agreeing to fees in person or through email communication will not protect you as much as having a written contract that specifies these fees will.
Naturally, there may be some fluidity, especially if you are paid by the hour or if there are additional costs for additional services. Yet, these can be explained in your terms of business.
In addition to how much you will be paid, you need to outline when you should be paid and how. You may choose to take a deposit before you begin work (and I would usually advise this), receive payments when various specified milestones are reached, and expect full payment upon completion of the work.
Completion of the work can be ambiguous so it is important to define what this means within your contract. For instance, if you are building a website for a business, is work completed when you have sign-off approval? When the website is launched? Or when you have transferred management of the website to the client? This is the kind of advice a commercial lawyer, such as myself, can help you with. So, please do get in touch if you have any questions about how to define your deliverables, your fees or any of your other terms and conditions.
What You Require From The Client
You cannot be expected to deliver work unless you have the necessary information and sometimes materials you need from the client. Yet, you will need to specify what these are and when you'll need them by, in your contract. This may be a brief or it may be certain pieces of information or access to systems or software.
It’s important to make clear to the client what you will need them to provide so that you may carry out the level of service needed to meet their requirements. If you do so, and they fail to meet these conditions, then you need to also explain what will happen next. For instance, you may suspend the project and recoup expenses (or retain the deposit). You may specify a time period within which the materials or information should be supplied in order for you to commence work and stipulate that if these timescales are not met, you will not be able to honour your commitments.
This is important for freelancers who have multiple clients or who may be pursuing other contracts because, if a client keeps you waiting to commence work then this can affect your ability to take on other work. Looming or delayed projects can impact your availability and therefore your ability to manage your income. So you should be clear that if you are not given what is required to undertake the work within a specified time, then the client will have to rebook your time at a later date and deposits may be lost.
It is important to have a policy in place if the client wishes to terminate the relationship. In most cases, you will deserve and be entitled to some notice, so use your client contract to specify the length of this notice.
When operating on a set hourly or day rate, terminating contracts is usually straightforward. There is a notice period to protect you from suddenly having a portion of your expected income removed. However, it can be trickier when projects are cancelled and the client may have a case to argue that full payment is not appropriate since the work was not delivered. In this case, we’d look to fault - to which party was responsible for the termination of a project. Within your cancellation policy you should provide guidelines for this and for what portion of the fee a client would be expected to pay should the project be cancelled. You may wish to cover a range of scenarios.
Terms of business must also cover copyright issues. Who will own the work produced and who will have the right to use it. It's really important that you get to hold onto ownership of your IP if you need to re-use with other clients. See my blog on copyright for more information.
You may also need to add clauses to protect yourself from being pursued for losses that you were not at fault for. For example, if you create a website for a client and they provide you with images, would it be themselves or you who would be liable if these are found to be breaching someone else’s intellectual property? On this point, you need to set out your liability levels (and what you won't be liable for), so a liability clause to protect you is crucial.
Robust terms of business can protect you from all sorts of scenarios. So, whilst it may be tempting to use a free template or even attempt to draft these yourself it is worth considering using a commercial solicitor. Especially since your contract will only be legally binding if it is found to be fair and reasonable for both parties. Therefore, even if you have a signed terms and conditions agreement, if you were to have a dispute and the document is judged to be unfit for purpose, it cannot be used to back you up.
If you are a creative freelancer in need of a client contract, please do reach out and I’ll be happy to help you. I am passionate about creating user-friendly business T&Cs that focus on setting out the commercial terms in a clear handy front table, with the all important legal T&Cs to accompany the commercial terms - to properly protect your business and IP.
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