Entrepreneur
Article
By Alyssa Gregory

Does a Freelancer Need to Use a Contract?

By Alyssa Gregory

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:

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  • 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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