Does a Freelancer Need to Use a Contract?

contractsI am a firm believer in written contracts and the need for them with almost all projects. While they certainly don’t protect you from everything nor guarantee you will be paid and paid on time, contracts are an important part of business that shouldn’t be overlooked.

Yes to a Written Contract

Other than affording legal protection to both you and your clients, there are a lot of benefits to be gained from using a contract, and some are less obvious than others. A written contract:

  • Gives clarity on the project terms
  • Specifies payment amounts, methods and due dates
  • Outlines warranties, liabilities and other legal responsibilities
  • Helps to avoid misunderstandings about what will be done, when and by whom
  • Presents you as a professional and experienced freelancer
  • Works against project scope creep
  • Provides a standard format for collecting necessary client and project information

Without some kind of written documentation, it can be very difficult to conduct business in a way that ensures both parties have a full understanding of the situation, and better yet, the same understanding. A written contract can really go a long way in reducing miscommunication, resolving disagreements and helping move a project along.

Once you’ve created a standard contract, it’s easy to modify it as necessary for new work. Although, you should consider hiring an attorney to review and/or draft your initial contract so it’s a valid and clear document.

Of course, not all written contracts have to be formal and filled with legalese. A contract just needs to outline the terms you’ve agreed to and have signatures of both parties to be legally binding. In fact, a chain of e-mails (provided you retain the thread of the entire conversation) may be used as a binding contract in some situations.

No Contract Needed

I do recognize that there are some situations when a freelancer may opt to forgo the written contract. Some such situations may include:

  • Very small or very quick projects with little risk
  • New projects with long-term clients who you currently have a separate agreement with
  • Some cases of pro bono work
  • Informal projects you do for family and friends

My perspective is that an argument can be made in each of these situations as to why a contract is still necessary. If you’ve ever worked with family or friends, you probably know what I mean! But as long as you are weighing the benefits and risk of each situation and making a careful decision, you should trust your instinct.

Do you use contracts? For every project?

Image credit: Steve Woods

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  • http://cydewaze.org cydewaze

    I agree with always having a written contract. I once built a fairly extensive site once for a customer. I got some money up front, but around a week after completing the site, the customer “changed her mind” and decided the didn’t need a site after all. I wasn’t able to recoup any payment for time spent.

    Won’t be doing any sites that big in the future without a contract.

  • http://www.optimalworks.net/ Craig Buckler

    No contract for friends and family? They’re the worst! I would always recommend a contract no matter who it is. Saves any confusion and bad-feeling later on.

  • João Pedro Pereira

    Hi, nice post! I would like to see a “template” of a contract to get some ideas. Thanks

  • http://www.idea15webdesign.com idea15

    You absolutely need a contract for all but the smallest, most simple bits of work. I make it clear to my clients that I will not do one mouse click worth of work for them until I’ve received both the signed contract and a 50% deposit. That requirement has a funny way of weeding out the timewasters right away.

    I have written some guidance on contracts here (IANAL):
    What goes into a good web design contract

  • richardb1

    I have done a few pro bono sites for non-profit societies without a contract other than a verbal agreement.

    Other than that I would not even commence work for anyone without a contract. From the reading I have done, the consensus is 50% of funds upon signing the contract, 50% on completion. That is what I will be including in all contracts I create for all clients.

  • http://www.genexbs.com Genexbs

    Apart from legal considerations a contract is an opportunity for both parties to write down and clarify project requirements, objectives and outcome. However we do skip contracting paperwork if project budget is very low, family & friends project etc. But still I think we must write a contract.

  • http://www.tyssendesign.com.au Tyssen

    Like you mention, I don’t use contracts for quick jobs or when subcontracting out to other agencies that I have a long-standing relationship with.

    When building sites for direct clients I always do though.

  • nachenko

    I use my cost estimation as “contract”. It sounds rough, but my cost estimations are like five pages long and every feature is detailed there, plus the specifications of the features that won’t be implemented and must be requested separately. It’s saving my ass these days for these kind of discussions:

    “I thought…” – “Not, actually, check page 2″

    “Yeah, I saw it, but I thought…” – “Sure, no problem, just check page 2 and think again”.

    I know this customer is pissed off, he tries to get more for his money from time to time, but my “hiper-detailed” cost estimation saves me from those “you said, I understood, I thought, I don’t remember that”

    GO WRITTEN. Period.

  • solas

    I didn’t ALWAYS use a contract until I got stung once. I lost out on 3000 euros and had no come back when the person disputed we had agreed a price.

    We actually had a contract, but it wasn’t signed…

    Protect yourself and your client. Always include a schedule and include payments on that schedule…

  • http://www.acmedigitaldesign.com s. janell

    As a producer in theme parks for years, I knew the value of a contract. I now have my own website/graphic design business and put together a very thorough contract and “boiler plate.” I took most of the boiler plate, which I call Terms and Conditions from the Graphic Artists Guild Hand Book of Pricing and Ethical Guidelines. It is under Website Development-TERMS. I changed the “Ownership of Copyright” to let them own any logo I designed for them outright, but I retain the rights to the design of the website (stung by a client who sold my design for thousands of dollars as a template!)

    In the Contract itself I outline the deliverables, schedule, cost and payment terms. Depending on the amount, it is usually 1/3, 1/3 & 1/3, with the first 1/3 due with the signed contract to commence the project.The final payment is due before the site goes live (keep it on your own server if you can!) I know this is probably old hat to you journeymen, but to the new ones to the business, this could save you a lot of angst.
    Good Luck,
    Janell

  • http://webguy303.com WebGuy303

    If you do decide to go without a contract, it works well to bill incrementally. For example, if you have a 100 hr project, bill after every 10 hours. If they don’t pay the first bill, then at least you don’t get in too deep before getting screwed.

    However, a contract is still the best way to go.

  • Trenttopia

    Can any one here help me? I would like to know if a contract that I sign at the age of 17 would be valid because of my age, for freelance web design work. I am in Texas. Thanks for your answers!

  • http://www.acmedigitaldesign.com s. janell

    To Trenttopia:
    The age in Texas to legally be able to sign a contract is 18 so you would need your parent or legal guardian to sign for you.
    http://www.justanswer.com/questions/xaoh-legal-age-sign-contract-texas
    Cheers,
    Janell

  • http://www.webz.co.nz S Black

    Thanks for this article it addresses some very good points especially to get agreements written down.

    Also remember that you don’t have to get too formal or legal on your customers. You can achieve the same result by simply sending an email outlining items like:
    – requirements (site will do this; and that)
    – responsibilities (i will do this; your will do that)
    – timeframes (this will be completed by this date)
    – milestones and payments (on completion of task x payment of y will be made)

    No lawyers of formal contract required.

  • biswa

    Alyssa Gregory great topic you have choose.Excellent work.

  • Pete

    If you’re not going to have a contract then you not going to be in a position of strength when things go wrong – and we’ve all seen things go wrong. My view is that the few jobs you’ll lose by forcing the contract requirement issue are outweighed by the trouble some of those jobs can bring you where you end up out of pocket, repuation issues, wasting your time when you could be working on another job etc…