Freelance Contract Failures: Are You Flushing Writing Success Down the Drain?

How to avoid a freelance contract failure. Makealivingwriting.com

If you’ve been burned by a client that doesn’t pay, there’s a good chance a freelance contract failure is to blame.

It’s a common theme among freelancers I’ve seen in 16-plus years as an attorney who helps freelance writers and small businesses.

I’ve seen too many writers land a “dream client,” start working without a freelance contract in place, and then have the whole thing fall apart.

Sound familiar?

Avoid a freelance contract failure

It happens. Especially for freelancers who are just starting out. You get excited about landing a new client. You start working and skip over getting a signed contract.

Before you know it you’ve sunk a lot of time into a project. Then the project changes. Or you never get around to negotiating important details for a freelance contract. Then the client fails to pay or refuses to pay because the work isn’t what they wanted. Now what?

Working without a contract is a gamble. It might work out, but you run the risk of flushing freelance writing success and your hard-earned money down the drain.

And in case you’re wondering, litigation usually isn’t the answer. Why? The cost to collect typically eats up the freelance check you were counting on, even if you do manage to squeeze out a payment from your client.

My advice, don’t get yourself in this situation. Before you start working for a client make sure you have a freelance contract in place with these five provisions.

1. Compensation

This one is obvious. But within your compensation provision, you need to include a retainer, late fees and kill fees in your freelance contract.

  • Never begin work without a retainer. And you should use a replenishing retainer to ensure consistent cash flow. Using a replenishing retainer is simple.For hourly-rate projects, your client will pay a retainer, let’s say it’s $750. As you work, you bill your hourly rate against the retainer. When the retainer balance falls below a certain amount, the client must “replenish” the retainer back to $750. And you don’t continue working until the retainer is replenished.
  • For flat-rate projects, your client pays a retainer up front and then additional amounts over time. The client might pay you each month, quarter or year. You don’t continue working until each retainer amount is paid. This also works on a subscription basis if you have a client who wants to pay you at regular intervals to ensure your availability to work as needed.
  • Late fees and kill fees. In addition, the compensation provision in your freelance contract must include late fees if a client fails to pay on time, and “kill fees” if the client cancels the project after you’ve begun work. A kill fee is a specific amount of compensation to cover the time you spent on the project up to the point the client “killed” it.

2. Attorney’s Fees and Costs

Many times, the cost of taking legal action is a barrier to freelancers. For example, if a client owes you $350, your legal costs will eat up most, and more likely all, of what the client owes you.

However, this provision in a freelance contract allows you to collect not only the $350.00, but also your attorney’s fees and costs if you prevail. And, just having this provision in your freelance contract can deter a client who may think about stiffing you.

3. Scope of Work

Avoid scope creep by specifically stating the work you will do. Anything outside of the scope of that work will have to be negotiated separately and memorialized in a new freelance contract.

4. Merger Clause

This clause states that all of the agreements between the parties related to the project are “merged” into the written contract. With this provision, neither party can claim that something that isn’t addressed in the freelance contract is part of the agreement. In other words, if it isn’t stated in the contract, it isn’t part of the agreement.

5. Amendments to the Agreement

All amendments must be in writing and signed by the parties. If it isn’t in writing, there is no amendment, and the parties are bound by the original freelance contract. Much like the merger clause, this provision will ensure that there are no misunderstandings between the parties about what is, and isn’t, in the agreement.

Bottom line to avoid getting burned: Get it in writing. Before you begin working on a project for any client, get a freelance contract in place. Take the time to address these five provisions with your client and negotiate terms you can both agree on. These five provisions must be in every contract you sign. They will protect you, and ensure that you get paid.

What freelance contract issues have you had as a writer? Let’s discuss in the comments below.

Steve Zakrocki is a Florida-based attorney who helps freelancers and other small business owners get paid and protect their businesses and families. He also runs the website Legal Ed for Freelancers, which is devoted to helping freelancers understand legal issues.

Grow your writing income. LEARN HOW! Freelance Writers Den

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68 comments on “Freelance Contract Failures: Are You Flushing Writing Success Down the Drain?
  1. J. Writer says:

    Hi Carol,

    I just snagged my first freelance writing gig. The client asked that I contact her directly, outside of the freelance website on which she found me. Also, the contract requires my home address. Is this spooky? Am I just a noob?

    • Carol Tice says:

      I usually don’t allow comments from obviously fake names…but I really wanted to respond to this. There’s so many problems here.

      First off, you’d have to check with that platform to see if it violates their terms of service to work with them outside of their platform, if you connected on their initially. Rules differ. You’ll have to decide if it’s worth the risk to you of being banned from that platform, if it’s against the rules.

      The bigger problem is that ‘freelance website’ platforms are generally not good places for freelance writers to hang out. Rates tend to be super-low, so this client’s rates will probably be as well. Read this blog for 900+ posts full of info on how to find your own clients and get paid professional rates.

      As far as the contract asking for a home address…does it REALLY ask for that, or just ‘an’ address? Many freelancers who’re home-based rent a PO box to use for these sorts of situations. You’re free to do that, usually, if it worries you. But yes, with legit clients, like, say, the $100M chemical marketing company I’m writing for now, or my last client, Delta Sky magazine, I don’t have a concern about giving them my home address. It’s where they’re going to mail the check!

      What I wonder is…what do you KNOW about this client? How long have they been in business? Do they seem to have a viable business? Have they ever worked with freelancers before? There are a million scams out there, so be careful. I hear every day from writers who got ripped off and never paid…but they usually don’t have a signed contract. Be sure to research your prospect so you know who you’re working for…and have an address for THEM.

      Finally…you don’t have a freelance writing gig yet. When you have a 30-50% up-front deposit check that cleared (you asked for one, right?) and a signed contract, then you’ve got a gig.

  2. Katy Reiber says:

    Speaking of contracts…

    What is the most universally used way of getting signed contracts? Do most writers have clients print it out, sign it, and email it back? Is a “please type I agree and send it back to me” sufficient? Do many spend the cash and do an official e-signature thing?

    • Carol Tice says:

      Katy — I’ve found there is no ‘common’ anything in freelance writing! And I definitely don’t know of any poll data on how writers are doing contracts. I mean, it’s partly driven in the publications world by the standard practice of that magazine — they tend to send you a contract, however they do it.

      I know writers using Adobe Fill & Sign PDFs. Word docs they email back. Some people fax them over.

      I did take a day-long ethics training at one point, and was told that if you hammer out all your contract language in an email and have them reply with “I agree,” it has held up in court — it has a date stamp on it and does create a paper trail. But I think that’s best left for low-money deals. I want a formal contract for anything substantial.

      Hope that helps!

    • Steve says:

      Hi Katy.

      I agree with Carol – depending on the project, you will want a more formal contract than just an email stating that the parties agree.

      That said, it doesn’t have to be complicated, and you can use electronic signatures.

      In my jurisdiction (Florida), even the courts accept electronic signatures on filed pleadings. So, depending on your jurisdiction, an electronic signature should work.

      You just need to make sure that you have an offer, acceptance, consideration (payment for the work you will perform), and, of course, the provisions outlined in this article. Then, the parties should both sign the contract.

      If you have other questions, don’t hesitate to reach out.
      Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

  3. Tessa says:

    Thank you for your article, Steve. How do you determine what your replenishing retainer fee should be?

    • Steve says:

      Hi Tessa. That depends on the type of project, the client, etc. For example, in my practice, I set my retainer based on the type of work, the complexity, the time I think it will take to complete the work, etc. Let me know if that helps or if you have any other questions.
      Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

  4. Great advice. I started using agreements with clients when I had a magazine publisher not pay for several articles. Makes the working relationship so much easier.

  5. Karen Cioffi says:

    Great information. I do have a question. What if your client only pays half or 2/3 of the total project fee. Does the client have rights to the content?
    Karen Cioffi recently posted…Writing a Memoir – 5 RulesMy Profile

    • Steve says:

      Hi Karen. That depends on what your contract says, and when you deliver the project. If your contract is silent on that issue, and you’ve already delivered the work, you still have a right to payment.

      You should write a demand letter requesting payment by a specific date, and that if you don’t receive payment by that date, you will take appropriate action.

      Carol had a great suggestion in response to another comment – re-invoice the client with a late fee included. Even if your contract doesn’t specifically provide for late fees, it may still prompt the client to pay the original amount due.

      I think that the best way to work is to use a replenishing retainer, that way you get paid as you work. Also, you should include an attorney’s fees provision in your contract so that if a client doesn’t pay, you can recover your fees and costs if you are forced to hire an attorney. This provision can also act as a deterrent to non-payment.

      I hope that’s helpful.
      Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

      • Carol Tice says:

        Right on, Steve — one of the other things I love about retainers is they come with a 30 day termination notice clause, so you have a month’s notice if the account is wrapping up. I hear too many stories of writers who overnight, find themselves without a big client they were counting on.

      • Karen Cioffi says:

        Steve, this is very helpful. All these tips will certainly make a client think twice before not paying. It’s happened to me twice and I think I’m about to get stiffed for the final third payment once more. I’ll tweak my agreement before I send out any more!

        Thank you so much,
        Karen
        Karen Cioffi recently posted…Writing a Memoir – 5 RulesMy Profile

    • Hi Karen. I always put a copyright clause in my agreements. I’m not a lawyer, so someone like Steve would have to tell you how much legal weight it has:

      Copyright
      I guarantee that the texts that I deliver to you are owned by me. I will retain ownership of those texts until you pay in full my invoice that relates to that text. As soon as I receive your money, the copyright to that text will be transferred to you and your client.
      Helen McCrone recently posted…How Good is Your Grammar?My Profile

      • Steve says:

        Hi Helen and Karen. I can’t get into specifics about whether the language Helen quoted above works. Again, we lawyers have to be really careful about such things. But, in general, if you reserve the copyright until such time as you receive full payment, and that is stated in the contract that you and the client executed, then the copyright remains with you until you are paid in full.

        These issues can get really complicated. Remember, even if you reserve the rights to the work until you get paid, that doesn’t mean that a client will not use the work in violation of your agreement. Then you have a whole additional set of issues in addition to receiving the final payment.

        That’s why it is soooo important to have a written contract in place that spells out the entire agreement between the parties.
        Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

      • Carol Tice says:

        I believe we have a sample contract in Freelance Writers Den that has this sort of clause in it, making sure copyright stays with you until they pay in full. And it’s a TERRIFIC idea.

  6. Thank you for this post.I decided to work as a freelancer now. This post’s so helpful to me.Thank you for offering it.
    Kristi Cathey recently posted…What Is The Best Temperature For The Baby Room?My Profile

  7. Joe says:

    This looks like vital information for somebody just starting out, especially the details of each provision. Very good post, and thanks, Steve and Carol. This is a must-have.

  8. Eva Swain says:

    Thank you for this post.
    I’m in Asia and I’m an LLM student it means that I have to go to the university to focus on my study. So I decided to work as a freelancer now. But I’ve just working for a couples of months. This post’s so helpful to me.
    Happy St. Patrick’s Day!
    Eva Swain recently posted…Best Volleyball Shoes 2017 – A Guide for Women and MenMy Profile

  9. Amy Hardison says:

    Steve, thank you for your insightful post. I didn’t use contracts for my first 6-9 months of freelancing, and now I have them with all my clients. The kill fee and the attorney fees are new to me – I will be adding them to any upcoming contracts.

    Question for you: I always worry that my contracts won’t stand up because they are not written by a lawyer, in legal language. They are just plain old terms written by me. I haven’t had any problems so far, but I’m wondering if I should try to convert my terms to legal language so they’ll have more weight in court (if needed).

    • I’m interested to see how Steve replies to this excellent question, Amy. Personally, I believe legalese is a block to clear communication with clients. Plain old terms sounds great to me, as long as they are complete and reasonable. That’s what a court would judge your terms on – are they reasonable and what’s the intended purpose, not whether they’re written in fancy lawyer terms.

      There are campaigns in the UK and US to get lawyers to write in plain English. Apparently, the National Conference of Commissioners on Uniform State Laws says: ‘The essentials of good bill drafting are accuracy, brevity, clarity and simplicity. Choose words that are plain and commonly understood. Use language that conveys the intended meaning to every reader. Omit unnecessary words.’

      There’s a great guide to eliminating legalese and drafting in plain English on the Plain English Campaign website. There must be a US version too.
      Helen McCrone recently posted…How Good is Your Grammar?My Profile

    • Steve says:

      Hi Amy and thank you.
      You don’t need to have “legal language” in a contract or have a lawyer draft it for you.
      But you do need to have certain things (for lack of a better “non-legalese” term) present in the agreement to create the enforceable contract. In a nutshell, a contract requires an offer, an acceptance and “consideration”.
      Okay, I’m going to get a little lawyerly here 🙂 The first two terms are pretty straightforward. Someone makes an offer, and the other person accepts it.
      But then we have to add in this other term, consideration, to complicate things. But it’s really not that complicated. Consideration is the bargained-for exchange between the parties. Each party must give something to the other party for the contract to be enforceable. So, if you agree to write an article for a publication, that’s the consideration you give. And the publication will pay you for that work (the article). That’s the consideration for the publication.
      Once you have this “bargained-for exchange”, you have a contract. Now, you can add other terms, such as the kill fee and the attorney’s fee, which become part of the contract as well.
      As long as the contract is clear and unambiguous, and you have that bargained-for exchange, you have a binding contract. You don’t need to have any special legal terms or anything like that.
      I could really go on and on about this stuff, but that, in a nutshell, is what you need to have a contract.
      Let me know if that helps or if you have further questions.
      Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

      • Amy Hardison says:

        Thanks for your reply, Steve. I have all 3 of those things in my contracts (offer, acceptance, and consideration), so that’s good to know. I am now thinking of little tweaks I could make to make them more clear. For example, I currently put names and contact info at the top, but I should probably outline it and say “this agreement is between Jane Doe of XYZ company, and John Smith of ABC company.” So I have some homework to do. Thank you!

  10. Allison says:

    Regarding kill fees – how do you determine how much those should be? Are they typically a certain percentage of the total project cost?

    • Carol Tice says:

      With magazines, they usually HAVE a kill fee, in my experience, and they’ll tell you what it is. IF they offer one, that is.

    • Steve says:

      Hi Allison. Like I tell my clients, everything is negotiable 🙂 It depends on the type of client, the project, etc. You could also have a graduated kill fee schedule. In other words, the kill fee increases the farther you get into the project. My suggestion is to go as high as you feel comfortable with the fee. Take into account the other work you could be doing while working on this particular project, the amount of time you anticipate spending on the project, etc.
      Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

      • Carol Tice says:

        Ooh, that’s a good idea for big business-writing projects — love it, Steve!

        • Steve says:

          Thanks Carol. And if anyone is concerned about getting a little creative with such provisions, don’t be. As long as both parties’ interests are protected, your client should understand and appreciate your concerns with provisions that protect you for your time and effort, as well as other opportunities you are giving up. And if they aren’t, you probably want to reconsider whether you want to work for that client.
          Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

          • Carol Tice says:

            Right on — writers, I have asked for revisions to MANY contract provisions, including in two print book contracts. Everything IS negotiable.

  11. Doug McClellan says:

    Steve, great job with your post. The information is valuable and en pointe.
    Carol, thank you for offering it.

  12. Nora King says:

    Carol,

    I have questions pertaining to the logistics of this. As freelancers working from home and freelancers having no face-to-face contact with clients, how do you carry out these steps? Snail mail? Fax? Scanner? Snail mail will delay the process and I currently do not have a fax. I would need to put out for this added expense. Is there another way to do this efficiently?
    Nora King recently posted…Show Off Your WorkMy Profile

  13. DL Stickler says:

    Back when I was freelancing as an SEO Consultant, I took a client without an agreement. Just as you said, I got burned and did not receive the last payment due. Excellent advice as always.

  14. Great to have practical tips from an attorney, Steve. Like most other freelancers, I’ve had a few painful lessons. I’ve discovered that it’s vital to be extremely specific about the project scope & brief and what you will and won’t do.

    Don’t leave room for interpretation. Don’t do what I did and write ‘client briefing to include a couple of phone calls with xxx’. My imagined two short conversations of about 15 mins each turned into five calls of over 30 mins each. Therefore, write ‘two phone calls of 15 mins max.’

    Scope creep is another problem, but I’ve recently resolved that with a’Change to Order’ form that the client must sign before I continue work.

    Currently, I have a 1099 client who – despite a clear payment clause in our agreement – is refusing to pay me until his client pays him. I’ve told him twice that my contract is with him, not the client, but so far nothing received, despite having completed the project at the end of January. Once I get my payment, I’ll be advising him that he’s no longer a client of mine, but I’m wondering what the next best step is.
    Helen McCrone recently posted…How Good is Your Grammar?My Profile

    • Steve says:

      Hi Helen and thanks for the comment. Scope creep can be a huge problem for attorneys too when the engagement letter (lawyer contract) doesn’t specifically state the legal services to be provided to the client. It hasn’t happened to me, but I have heard horror stories.

      With regard to a next best step with your client, I can’t advise you on the specifics of your matter, since you are not my client – we lawyers have to be really careful about those things 🙂 If you want specific help, you’ll need to consult an attorney.

      But I can tell you how I generally proceed, or advise clients to proceed, in such matters.

      First, if you haven’t written the client a letter demanding payment, that should be your next step. It is always best to try to work things out informally, and many times such a letter will at least start the process. In the letter, you should demand payment by a certain date and tell the client that you will follow up with appropriate action if they don’t pay by that date.

      If you have an attorney’s fees provision in your agreement, you could seek help from a lawyer if the client still doesn’t pay. Sometimes a letter from a lawyer will do the trick. Most people don’t want to get drawn into a court matter, and even though you might be able to sue them yourself (see below), a letter from a lawyer usually ratchets up the concern that litigation is right around the corner.

      If you don’t have an attorney’s fees provision, then you need to weigh the cost of retaining a lawyer to help you versus the amount owed. Unfortunately, as I state in the article, many times it is not cost effective to hire an attorney. That said, many attorneys will write a simple demand letter for a flat rate.

      If all else fails, depending on your jurisdiction and how your business is set up (what legal entity you operate under, if any), you can bring an action in small claims court without an attorney.

      I hope that is helpful. I’d be happy to answer any other questions you have. Just let me know.

      Thanks!
      Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

    • Carol Tice says:

      Ooh…I just hate when they say that. Your cash flow is not my problem, buddy!

      Personally, I find the #1 mistake writers make is lack of payment TERMS. WHEN do they have to pay you? Particularly, when it comes to FINAL payment.

      If that’s not well defined, sleazy clients will simply say ‘we haven’t finalized it yet’ forever, and try to stiff you on that final payment.

      If you have defined payment terms based on when you submit your copy, then he can’t use that ‘I haven’t been paid’ argument. You’ve clarified that it’s not relevant to your contract.

      • Exactly, Carol. What’s doubly annoying is that my payment terms are very clear indeed. I even specify when the project is considered approved: ‘when you sign off my work, begin using it on the client’s website or ten business days after I have delivered my work, whichever is the sooner’.

        I won’t be working with them again (definitely a crummy client). They promised me two or three projects a month, but that’s never transpired because they always have bottlenecks in the pipeline, and they’re now telling me they want to treat me the same as the others on the team (website designer and project manager), who get paid only after the website goes live.

        The way I see it, if they want to accept such poor terms, that’s their problem. I’m not going to have my payment dependent on a whole bunch of factors and people I can’t control.

        As you said in another article, better to put my energy into finding my own great clients!
        Helen McCrone recently posted…How Good is Your Grammar?My Profile

  15. Hi Carol !
    This is a great post, but I am a newbie who does not know what goes inside a freelancer’s contract.
    So when i clicked on the ‘make sure you have a freelance contract’ link, it redirected me to another post of yours that had a link to ‘what belongs on a freelancer’s contract’

    This second link is a dead end and does not work. So if you could please fix it up somehow or provide a back up link, or maybe actually tell us what belongs in a freelancer’s contract and how should a freelancer go about it, I’d be grateful.
    Thanks in advance !

    • Steve says:

      Hi Meehika. I clicked on the links and they all seem to be working.
      Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

      • Hi Steve

        Thank you for letting me know as to what a retainer is. I’m still trying to find what actually goes inside a freelance writers contract.

        About the link,
        On your article, the red words “make sure you’ve a freelance writer contract” redirects to a post that has this particular link .
        So basically this link has been provided in the post that’s linked with this article on Carol’s website which doesn’t seem to direct me as the red letters in the post say – read what goes inside a freelancer’s contract.

        • Carol Tice says:

          The WM Freelance site may not be up anymore, Meehika — sorry! But inside Freelance Writers Den, we’ve got a Freelance Business Bootcamp that goes clause by clause through the typical things you’ll encounter in a freelance contract.

          There’s also an ebook version of that bootcamp that’s available to nonmembers — you can see it up on the ebooks tab here on the blog.

  16. I remember the first time a client asked me for edits 5 times. When I said, this is just too much, he said – ‘But, you never said anywhere that you wouldn’t do it’

    That was the day I sat up all night to create the perfect freelance contract. Over the time, I have had to deal with a lot of different situations, but I always learnt my lesson from them and make edits to the freelance contract accordingly.

    Even now, I don’t care if the client has ‘urgent work’, if I haven’t received advance payment and signed contract, I do not start work
    Ritika Tiwari recently posted…How to File for Taxes as a Freelancer in IndiaMy Profile

    • Steve says:

      Thanks for the comment Ritika.

      Frankly, I learned the hard way too when I started my own solo practice. I was so excited to have a new client that I would begin work without an engagement letter (a “lawyer contract”) or retainer. Now I don’t begin work without a signed engagement letter which specifically outlines the work to be performed, and a Replenishing Retainer.

    • Hi there !

      I have been a freelancer for a year and I definitely don’t want to make the same mistakes as you did. I don’t know how to put together a freelance writer contract. Never did. To be very honest, I don’t even know what a retainer is?
      Could you please help me out here?
      Meehika Barua recently posted…Blurred Lines On The Border Of Childhood And AdulthoodMy Profile

      • Steve says:

        Hi Meehika. I know you were responding to Ritika’s comment but thought I would jump in with regard to the retainer question. A retainer is a sum of money that is paid by the client up front before you begin work. I like to use a Replenishing Retainer because that it provides consistent cash flow for you as you work. With regard to contracts, this article addresses some of the most important clauses you should include. Carol has some resources on contracts here, and I’ll have more information on contracts on my site.
        Steve recently posted…Getting Paid: Written Contracts Are A Must!My Profile

      • Carol Tice says:

        Meehika, some clients will provide you with one — but it’s good to know what to look for in one. See my other note about other resources I’ve got on contracts. And I should add, we also have SAMPLE contracts inside Freelance Writers Den.