6 Freelance Contract Mistakes and How To Fix Them

Most problems freelancers experience when working with clients are due to contract mistakes. Do any of these statements sound familiar to you?

“I started working on the design and when I called client to show my concepts he told me he had decided to work with someone else.”

“My client wants me to work up some ideas and then, if he likes them, he’ll give the his project.”

“It’s been 3 months since I finished the project and the client still hasn’t paid me.”

“My client says I owe her my working files.”

“My client keeps adding new things to the project.”

Most of the questions I get from freelancers are about getting paid, scope creep, and who owns what when the creative project is completed. I admit to becoming angry and frustrated when I hear their stories — angry because the client does not respect the freelancer, and frustrated because the freelancer does not know how to conduct business.

For some reason, the business world has a tendency to not take freelance designers, photographers and illustrators seriously. Instead, it takes advantage of them. Sometimes this is willful, an attempt to get something for nothing. Sometimes there is a lack of awareness on the client’s part that the freelancer is a business person. We don’t see this so often in other professions. Perhaps it’s due to a perception that, since we are “creatives”, we’ll work for free for the love of it.

When You’re a Freelancer, You’re a Business Owner.

If the freelancer truly wants to earn income through their creativity, she needs to think like a business owner and not as an artist. There are few client-related problems that a freelancer cannot avoid if she will simply engage in good business practices. Even when she uses a written agreement, it may not be detailed enough to protect her time, her process, her property rights or her livelihood. These are common mistakes in freelance contracts:

Contract Mistake 1: Not having a signed contract. Freelancers assume great risk in working on the basis of verbal agreements. With a verbal agreement, you cannot enforce anything. Misunderstandings can’t be settled when there’s nothing in writing. Neither the client nor the freelancer knows the exact scope of a project, the budget, the schedule, the terms or the rights to the work. Freelancers should never work without first having signed agreement. This is especially necessary when working with friends and family members.

The fix: Develop a contract template that you can modify for each client and project, and DO NOT START WORKING ON A PROJECT UNTIL THE CLIENT SIGNS IT.

Contract Mistake 2: Not requiring a down payment before beginning the work. In our culture, we show respect with money. Without a down payment, the freelancer is working for free. Working for free does not create revenue. On the client side, a down payment shows that they are serious about the project and respect the freelancer as a professional. The down payment puts the freelancer and client on the same level in the relationship — as peers.

The fix: In your contract, require a down payment in the range of 25%-50%, and consider it a show of good faith on the part of the client. again, DO NOT BEGIN WORKING ON A PROJECT UNTIL YOU HAVE BOTH THE SIGNED CONTRACT AND THE DOWN PAYMENT. Once you receive both, and the money is in your bank account, then you should begin the project.

The key here is to work only until the down payment has been “used up”. At that point, stop work and submit another invoice, and don’t begin work again until it is paid. In this way, you’re never working for free.

Contract Mistake 3: Not including billing and payment terms. These include how billing will happen and when. It’s not unheard of that the freelancer will get the down payment, begin the work, and become so involved that he forgets to invoice until after he’s delivered things to the client. So the client has what they need, and may delay payment or decide not to pay at all.

The fix: Include an invoice schedule in the contract. And include payment terms, such as on receipt, net 10, net 15 or net 30. Include a late fee amount in your contract. Include finance charge information if the payment goes past due.

Contract Mistake 4: Not including enough detail about the project deliverables and procedures for requested changes or additions. Scope creep happens more often than not. When the client adds to the job or wants changes, it impacts your work load and the project schedule.

The fix: Describe each component of the project in detail, including the number of concepts, revisions and reviews for each item. For example, for a brochure design might include 1 initial concept, up to 2 revisions/reviews, and final design in PDF format. Submit a separate change order for each additional item, and be sure to include the amount of time and additional fees. Have the client sign it BEFORE proceeding with the changes.

Contract Mistake 5: Not specifying what the client receives and how the client will use it. Creative freelancers sell rights to their work. They need to be exact about what rights transfer to the client, when they transfer, for how long they transfer, and when they revert back to the creator.

The fix: Include terms about what specific rights are being transferred. For example, for a web site design you might say Electronic rights for 2 year from date of first launch. For photography you might say First reproduction rights, North America, for 6 months from (date). Afer 6 months, all rights revert back to the photographer.

Contract Mistake 6: Not including copyright terms. The independent creator automatically owns the visual work and the copyright to it. Copyright is a bundle of rights which can be apportioned to the client for particular uses for a specified duration, in a specific form and in a specific distribution. Ultimately, it’s your creation. Protect your rights to it.

The fix: Include terms about what specific rights are being transferred. When, where, how and for how long can the work be used? You can assign exclusive or non-exclusive rights. For example, you can specify that your photographs be used exclusively on the client’s web site, or on the web site and 2 email campaigns, or on a web site and a social media promotion for 3 months. State that all other rights are reserved to the photographer. Additional uses, durations and locations require additional payments. After the specified time, all rights revert back to the creator. This protects your ability to earn additional revenue from your work, either from that client for additional uses, or through licensing. What rights are transferred to the client should be based on what the client needs. Keep in mind that clients think they need more rights than they actually do. I will discuss work-for-hire situations in another article.

Copyright is automatic for the work you create.

As the creator of your work you automatically own the copyright to it without needing to register your copyright. The reason we register copyright is to enforce our rights when they have been infringed. Since you own the copyright on what you create, you transfer rights to your client.

Bonus tip: I strongly advise against signing a contract written by the client. In fact, I no longer accept clients who insist that I sign their contracts.

A contract can be simple or complex, depending on the nature of the project and the client. You need to be able to customize a contract to fit the needs of the project. The rule of thumb is that, no matter what form your contract takes, it should be written, it should be signed, and you should not work without one.

Contract resources for you:

AIGA Standard Form of Agreement
Graphic Artists Guild Business Practice Essentials
ASMP Bad Contract Tutorial