Freelance contracts: what they are and why you should use them

The company accepted your quote and you’ve now secured your first client. Nicely done. Next up is signing a freelance contract with your client.

While this process might seem cumbersome, such a contract provides protection and security, sets the scope of your work relationship with your clients, and builds trust.

If you don’t have a freelance work contract yet, consider creating one. Not even sure you need one? Looking to write one but not sure where to start? Then, lean in. We’ll share the key elements to draft a freelance contract and explain why such a contract is in the best interests of all concerned.

When an employee starts a new job, their new company has them sign a work contract. This written contract outlines all the elements previously discussed between the new employee and the company: work location and schedule, job description, pay, and so on. This work contract sets expectations for both the company and the new employee.

A freelance work contract is to a freelancer what a work contract is to an employee. One significant difference exists, however: no subordination link must exist between you and your client. You are free to set your working hours, vacation days, and so on. You remain fully independent from the company you’re collaborating with.

If, in practice, your independence as a freelancer isn’t respected, your freelance contract can be reclassified as an employment contract, with legal consequences for the company.

Specifically, your freelance contract cannot contain overly restrictive or abusive clauses. If your client is the one providing the contract, you can negotiate any element that doesn’t suit you.

A written contract with your clients is not mandatory, but it’s good practice to ensure a smooth collaboration with the company.

First, it defines the scope of the work, and how it’s to be carried out. Before accepting the mission, you discussed its main aspects with your client, which are now detailed in the contract. That way, if there’s any doubt, or an additional out-of-bounds request, you can refer to the contract to avoid any misunderstanding.

Then, even if one hopes a freelancer-company collaboration will go well, a contract protects both you and the client. On your end, you’re protected in case of unpaid invoices, in terms of professional liability, and so on. For the company, it ensures respect of issues such as the confidentiality of information and the deliverables’ intellectual property.

Lastly, signing a work contract is vital in helping you stay organized. It gives you visibility of your upcoming tasks and payments:

• You know how much work you’ll have in the coming weeks and months. This allows you, for example, to ask for a minimum work commitment duration of X hours/days over X months, with Y deliverables during that time. That way, you also know if you need to look for more clients and can sort out your schedule accordingly.
• You know when your clients will be paying and under what conditions. Being stressed out by unpaid or late invoices is sadly a common (and often overwhelming) aspect of freelancing. By defining specific payment conditions in your written contract, your mind is at ease because you know that aspect of the mission is handled.

When thinking about contracts, written contracts spring to mind first. However, it’s good to know that, in France, a verbal agreement is also common and has legal value. To cover your bases, in the event of an oral contract with a client, it’s best to get a written confirmation of that contract by email. Extra points if that written confirmation specifies the gist of the contract: scope of the work, deadlines, and payment amount. That way, in case of a dispute, you have written proof of the verbal agreement you struck with your client, including its main terms.

That being said, having a written freelance work contract is best to set the boundaries of the work and provide protection and security. So, if your client is used to working with verbal contracts, you can still suggest they sign a written contract with you.

You and your client are both protected and bound by the freelance work contract you sign together. This contract falls under commercial law.

On the freelancer’s side:

• You’re committing to completing your work according to the scope defined at the beginning: deadlines, compensation, mission content, etc.
• You have an obligation of means to carry out your work. This means you must use all possible means to fulfill your work objectives. However, you do not become liable if you fail to reach them.

On the client’s side:

• The company commits to paying the freelancer on time according to the terms set out in the contract, and to provide them with all the necessary elements to carry out their work.
• Before hiring them, the client can check the freelancer’s legal status by asking for a copy of their registration confirmation, a French K or Kbis, or any other document that prove the existence of the freelancer’s legal structure.
• The company must also ensure the freelancer declares and is up to date regarding paying their dues and social contributions. This can be done by obtaining an attestation de vigilance, a certificate of compliance from the URSSAF (the French social security organization in charge of collecting such contributions) - this is something the freelancer must request and send to their client.In fact, for any service contracts totaling over €5,000 before tax, whether paid out in one or several installments, this verification must be made when the contract is signed and every 6 months after that. Let’s imagine the client company doesn’t perform these checks, and an irregularity is later discovered. In that case, the client may be subject to legal action, due to a lack of due diligence.
•  In France, a work permit is needed if the company wishes to collaborate with a freelancer who’s a foreign national.

Of course, there’s not a one-size-fits-all freelance work contract. A good contract is adapted to your business and your field. As mentioned earlier, your freelance contract is governed by commercial law, so labor laws don’t apply. Your written contract with your client can therefore be tailored to each party’s expectations and needs - within reason, of course.

You want your freelance work contract to set the scope of the work to be done for the client. These are the basic elements to include:

• your identity and the client’s: trade name, address, and so on,
• the mission’s scope or, in other words, the contract’s objective: be as detailed as possible here, and list the collaboration’s main steps,
• duration of the mission: when it is supposed to start and, ideally, end (a freelance contract can also be for an unlimited amount of time),
• your compensation: this can either be your average daily rate or the total amount you’ll be paid for the work,
• payment terms: down payments, payment period… it’s up to you to negotiate specific payment terms with your client and to indicate them in your contract. You’ll also want to mention late payment fees.

A written freelance contract is there to set the scope of the work you’re about to carry out, but also to prevent any possible dispute. That’s why there are also certain specific clauses you’ll want your contract to contain, such as:

• Liability: being covered by errors and omissions (E&O) insurance, also known as professional liability insurance, is strongly recommended for freelancer workers. You’re covered for any errors or possible damages during your mission. While having to use it is rare, it’s a safeguard that could help you avoid major financial issues.
• Confidentiality: it is standard practice to add a confidentiality clause in your freelance work contract, to protect the sensitive information your client provides. This clause should specify which type of sensitive information you were given, and should also be limited in time.
• Non-competing: this clause is also commonly included in a freelance work contract. Clients usually request it to ensure you won’t be providing the same service to a direct competitor. You also commit to not creating a business competing with your client’s through this clause. To be valid, the non-competing clause should be limited in time and space, and clearly detail the activities involved. It should also be proportionate so as not to overly interfere with your freedom to do business. Unlike a non-competition clause in an employment contract, this clause doesn’t need to include financial compensation for the independent worker.

• Intellectual property rights: a freelance contract should include a clause about intellectual property rights, particularly for artistic or development work. Without one, your client doesn’t have any ownership over the works produced during the mission. Your intellectual property rights can be transferred entirely to the client, or a license agreement can allow the client to exploit its rights. In both cases, financial compensation is usually provided.
• Early termination: while we always hope a work relationship will go well, the whole point of a contract is also to prepare for potential conflicts. As such, including an early termination clause, with several scenarios, makes sense. For instance, the clause could terminate the contract in the event of failure to perform obligations, on either side. It can also define conditions for canceling or postponing the mission.
• Arbitration: to avoid going to court in the event of a dispute, you can add an arbitration clause. This “jurisdiction clause” (also called clause compromissoire in French) makes an amicable settlement possible.

If your client already uses a standard contract for freelance work, they no doubt will suggest you use it for your freelancer-company collaboration. This can especially happen when you work for large companies.

In that case, you’ll want to make sure that each clause matches the agreement you reached with your client and the contract doesn’t contain any excessive elements. Negotiate any clause that doesn’t suit you.

Hoping to draft a freelance contract quickly and for cheap? Go hunting for a freelance template online. Just make sure you adapt this template to your field and business to ensure they cover you well.

The best way to ensure optimal protection is to get your contract professionally written. A lawyer, in particular, is well-suited to help you draft a contract. While this may take longer and cost you a little more than the two options above, it’s also the best way to have at your disposal a contract approved by a legal expert and perfectly adapted to your field.

You’re technically considered an employee if you’re represented by an umbrella company. Your client will sign a contract with your umbrella company, not you, directly.

Whether you’re just starting out or are an experienced freelancer, using a freelancer work contract is a must to set the scope of your mission, set expectations, and build trust with your clients.

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