All About Contracts For Freelancers

All About Contracts For Freelancers

I’ll tell you this, and I learned this the HARD WAY: It’s always a smart idea to protect your business and yourself with a contract in play before you begin being on a retainer or before you even start working on a project. There have been a lot of cases where I worked my ass off for a project and only to find out that I will not get paid for it or me getting a massive pay cut 9 months into the retainer work. It’s really frustrating, and having no contract gives you absolutely no legal leverage against a person or company. So it’s time you protect yourself and what you’ve invested on for the company.

Here are the 5 types of contracts that I’ve worked with, what it means, when it is used and a heads up on what it does:

  1. LETTER OF AGREEMENT (LOA) – Its a simple letter with an easy to understand 1-3 pages listing what each party agrees to do. It’s so easy, even a high schooler would understand what it means. It’s used only with parties that you trust and know (friends & relatives). It’s the least legally binding contractual document of all.
  2. NON- DISCLOSURE AGREEMENT (NDA) – It simply means you won’t disclose any of your client’s proprietary information and vice versa. If you tell anybody and you’ve been quoted for telling anything that you shouldn’t be disclosing, you’ll probably need a lawyer once you’re sued for breaching this agreement. It’s often used before any projects that enter sensitive discussions. In other words, don’t go posting about this on your social media accounts.
  3. NON-COMPETE CLAUSE (NCC) – This one asks you to sign away your rights to competition. It means that if you work with a direct competing brand while in contract with this company, you will get sued. Example is working for a Gas company on a project and doing another project with a competing Gas company. It’s used by clients to remove any competition under stipulations of name, geography including time enclosure.
  4. STATEMENT OF WORK (SOW) – This lays out the major details of a specific work agreement you have with your client. It’s used by large scale companies and clients or during complex new projects that has plenty of KPIs. This eliminates formal contracts legal languages and gives out clear, easy to understand words.
  5. FORMAL CONTRACT (FC) – It’s a document used by large companies and big clients. It’s used by clients for all their freelance agreements. I get this a lot being a Project Director for multinational companies I work with and a lot is usually on the line. I would recommend getting a lawyer friend to read this for you before you sign this (including SOW) because this is usually at least 10 pages long or more that you need to sign on every page. This is legally binding and most likely many words will sound foreign to you. I once signed an FC without me knowing that I cannot work with a similar type of company up to 5 years upon termination of the contract.

That’s all the contracts that I know that I have collected throughout the years. I have kept all my contracts in 1 folder and scanned all of them to keep on my online storage for reference as well in case I need to review some of them. You also can hire a lawyer to help you create reusable contract templates or you can access them online for free, but do take note that it could be very generic also.

Last note, read at least 2 times any contract before signing them. Don’t always be eager to sign anything anytime.

Question of the day: Was there any contract that you read that you didn’t sign? Why?

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What people talk 1 Comment

December 17, 2020 Khel Lawrence

Let’s face it. People tend not to read contracts especially if they would see “wordy” and numerous pages. They think of it as “ugh just sign.. I don’t want to read it anymore”. But reading contracts is the key in understanding what you are signing for. Whether that would be an employment contract, marriage contract, service contract, etc. Everything should be read because there might be something hidden in between the lines.

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