Freelancers: Contracts Won’t Protect You
Everyone says freelancers and small agencies should have contracts with clients.
Should you? Yes.
Will a contract ensure you get paid? No.
So, why bother? Let’s dig in.
A Few Words About Terminology
At my agencies, we didn’t use contracts. We used detailed estimates that included all the essential points of a contract.
What’s the difference?
In theory, there’s no difference.
In practice, contracts are usually created by lawyers and loaded with dense legal language. They’re designed to protect you but often result in paragraphs of hostile and unfriendly language.
We avoided that. We always wanted to be on friendly terms with our clients and weren’t going to let any legalese get in the way.
Why Should You Have a Contract?
The contract, or detailed estimate, should cover the following:
An outline of the scope of work you’re providing. In some cases, you should specify what’s not included. (Example: if you’re building a website but not providing hosting.)
How many rounds of revisions are included? What constitutes a round of revisions?
A timeline or calendar for the work
The amount of the estimate
How and when you’re getting paid
The Most Important Reason for Having a Contract
Before you start working with a new client, it’s critical that they understand the terms of your estimate. Go over it with them in person or on the phone. Get explicit client agreement to your terms.
Too many freelancers make the mistake of just sending the estimate to the client, assuming they will read it. They believe that if the client doesn’t say anything, they’ve agreed to the terms.
Freelancers often hide when presenting estimates because they’re uncomfortable talking about money. They may worry about pushback on the amount or specific details. So, they just “send it over” and don’t review it, hoping to get approval to proceed. Learn more about how to talk to clients about money.
Not having that discussion could be a fatal mistake. If there’s a disagreement later, the client can claim they didn’t read it. “I glanced at it, and it looked fine. I didn’t know it said THAT.”
Don’t let anyone have that excuse. The first time you work with a client, get on a call and:
Review what you’ve included in the estimate and how you propose to do the project
Discuss revisions and what you mean by a revision
Review the calendar together—do the dates make sense for the client?
Go over the amount and terms and conditions for getting paid
If there are changes required to your estimate, it’s better to do them now than argue about them later.
Finally, you want some type of written agreement to the estimate. That could be an email, text, or a checkbox on an estimating form. Both you and the client should know what you’ve agreed to do.
Watch Your Language!
If you’re a writer, you know that words carry hidden messages. It’s not just what you say but how you say it.
Think about this when you write your estimates.
I’ve seen this kind of language in estimates:
“Any work not explicitly stated in this contract is out of scope and will be dealt with under a separate agreement.”
On one level, it’s okay. But it struck me as cold and unfriendly.
“Explicitly stated” and “dealt with” feel like a lecture. Do you want to be dealt with? I don’t think so.
How about restating this? It could be:
“This estimate covers all of the work we discussed. We will be happy to provide further estimates for any additional work.”
Same meaning and a nicer way of saying it. Use friendly language in your estimates. It should be easy to read and understand while communicating your points.
How to Get Paid (Or, Prevent Clients from Not Paying You)
In an ideal world, your jobs run smoothly, and clients pay quickly. But sometimes, things go sideways.
Be careful what clients you take on. If they seem sketchy, if red flags are flying, take it as a warning. It’s easier to say no at the beginning.
Your chances of getting paid fairly and completely increase dramatically by avoiding certain clients.
What clients should you stay away from? On Twitter, we came up with lists. Consider saying no to:
No written brief
No defined budget
No defined goals
No experience marketing
No research
Wants a free “test project”
Won’t agree to cost or payment terms
Needs it done much faster than your proposed schedule
All of their former writers or designers were “no good”
Changes their mind often
Late for meetings or keeps postponing them
Wants to micromanage
These are all signs that you may have trouble getting paid later.
The Best Way to Ensure You Get Paid? Get It in Advance
How do you avoid payment arguments later? Get paid in advance. Whether that’s 100% in advance of starting, 50%, or even 25%, it’s much better than 0%.
Asking for and getting advance payment is also a sign of trust. The client is giving you money before you’ve shown them any work. That’s a good sign.
For bigger jobs, get progress payments by key deliverables.
You don’t want to be in a position where you’ve completed the job, and now the client starts arguing about fees.
Make sure your payment terms are clear in your estimate.
What About the Signed Estimate or Contract? Won’t That Force Them to Pay?
No. Clients who do not want to pay a portion or all of the invoice will come up with 101 reasons (excuses) not to pay.
Even if they signed off on the contract, they’d claim you didn’t do your part to their satisfaction.
You can argue about that all you like, but in the end, you can’t enforce payment.
Business still depends on the goodwill of all parties.
Two Options for Forcing Payment
You can hand over the receivable to a collections agency, who will hound the client for payment. But you’ll end up paying a hefty percentage if they do collect and might even have to pay fees if they’re unsuccessful.
Or you can pursue the matter in court. If it’s a small amount, you may be able to do this in small claims court, where no lawyers are required. Check for the limit for small claims court where you live. Sometimes you can win there, and the court compels them to pay.
If it’s over the small claims court limit, you’re in the land of lawyers. Fees are likely in the thousands, so you have to determine whether it’s worth it. Spending time and energy here will be a huge distraction from your business.
Last Option: Just Walk Away, Write It Off
Sometimes, it’s best to let it go. If you sense you’ll never get paid, if you don’t want it to drag out in court, you’re better off putting it behind you.
We once wrote off over $6,000. The client could never make up his mind, no matter what we showed him. He refused to pay until he was 100% happy. We got to the point where we knew we could never resolve it, and we wanted to move on.
We simply told him we were done with him. Didn’t give him any files and wished him well.
We made a few mistakes on that one. No deposit. We should have stopped after the second round of revisions. We didn’t spend enough time defining the project.
Last Reason for Detailed Estimates
Creating a detailed estimate forces you to think through how you want to run your business. What are your terms and conditions?
Are you happy with them? Do you want to make any changes? Take the time to review.
And then include your terms on every estimate.
Review them with new clients so that you’re sure they understand what you’re proposing.
Finally, get agreements in writing.
There’s much more on detailed estimates in my book, How to Start a Successful Creative Agency. It’s the essential business guide for graphic designers, copywriters, filmmakers, photographers, and programmers.
With over 300 pages and 23 chapters, it’s available at Amazon (Paper & Kindle), Kobo (ebook), Apple Books (ebook), and Gumroad (PDF).
Recommended to Other Creative Friends
“Hi Andy, just finished reading your book. Loved the sections on estimates, billable hours, and timesheets. Recommended to some other creative friends who are running their own biz. Thank you for writing the book :)”
Kasun Pathirage, Freelance B2B Writer, DM Twitter
The book is packed with useful information to help creatives start and grow their business.
Want a free taste first?
Sure! Sign up below to get a free PDF of Chapter 14, Working With Clients.
Questions? On Twitter, I’m @StroteBook. DMs are always open. Ask away.