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.
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.
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.