Freelance contracts: what to consider

Legal experts Mackenzie and Dorman provide advice on the five types of contract you may encounter as a freelance.

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Whether you want to call it freelancing, consulting or contracting – working for yourself is a highly desirable opportunity.

Yet, balancing being a mum alongside working for yourself can be a huge challenge. You need to learn how to juggle major responsibilities while having an entrepreneurial mindset, but taking care of your kids doesn’t need to stop you from being a successful freelancer.

Regardless of how busy your life may be, taking the time out to understand the different types of freelancing contracts will help you along your freelancing journey while guaranteeing your financial security too. This blog post breaks down the five most common types of freelancing contract and tells you everything need to know about them, read ahead and get the knowledge you need to protect yourself and ensure you get paid correctly.

Contract 1 – The Informal Contract or Letter of Agreement

A letter of agreement is the most informal variation of a freelancing contract and we would advise to only start a project following a letter of agreement if you have the utmost trust in your client, perhaps if they’re a family member or friend.

One advantage of an informal contract is simplicity, it can be created quickly by either freelancer or client and it should feature simple and easy to understand language that ensures both parties understand what is required of the other. The negative aspect is that an informal contract has less legal standing and therefore it is inappropriate for most working relationships.

If you want to keep your letter of agreement as legally tight as an informal contract can be, make sure it meets the below criteria:

● It should include all relevant provisions
● Freelancer and client should understand the letter fully in the first reading itself
● The Letter of Agreement should also contain the provision for its termination and out lay the conditions that would make this acceptable.

Contract 2 – The NDA

An NDA (non-disclosure agreement) is usually a contract a freelancer will sign before any form of work has begun. It may include project details, or it may need to be signed before those have even been discussed. That’s because an NDA will protect your client’s interests and by your agreement to this contract, you agree to not disclose any information around the work.

If you are signing NDAs, legal advice is recommended but not always necessary. Make sure you are happy with every detail and preferably ask that the NDA has a time limit. Ideally, you do not want legal exposure around work agreements hanging over you for all your career.

Contract 3 – Non-compete Agreement

If you are thinking about undertaking work for an agency or practice, then you may need to sign a non-compete agreement which ensures that you won’t reach out or pitch for work with their clients. You would likely be asked to agree to give anyway rights to ‘compete’ with them in any form and there’s a host of stipulations this could include. For example, if you’re working for a photography agency – you may have to sign away the right to work with photographers in any form for a certain period of time.

As a freelancer you should fully vet an agreement of this type to ensure you won’t lose out on any business opportunities or the possibility of monetary game. As with NDAs, one of the most important aspects of a non-compete is the time limit you’re restricted to.

Contract 4 – Formal Contract

This could be the perfect type of freelancing contract! A formal contract is a document that has been checked by a lawyer and should be provided to the freelancer by a client, but the client has the right to read it over and put forward changes.

A formal contract is generally the most legally airtight and many clients will often use a template for all of their freelance agreements.

In a formal contract, just as important as the service you’ll provide is for you to define elements of service you will not provide, especially if there’s any room for confusion in your service area.

Contract 5 – Statement of Work

A statement of work is a popular contract that sets out exactly what you as a freelancer are going to do for the client. It’s almost like a project plan, but it usually foregoes some of the legal aspects that a formal contract would provide.

The five contracts listed above are there as advice to help you as a freelancing mum, but you should not take this blog legal advice. If you want to ensure all your contracts stand up in a court of law in the UK, you may need to get them checked by solicitors to ensure they are bulletproof.

*This article was provided by Mackenzie and Dorman whose commercial and business advice covers contractors, freelances and small businesses.

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