Contracts and schedules for freelancers

The terms you agree with your client ahead of starting work are critical in terms of protecting your business. As every freelancer will tell you need to document everything. Highlight the services you agree to carry out, the project's requirements, timescales and any other considerations to ensure successful project completion. You need to do this at the start before you have started working on the project.

Although the contract is the legal document, it can be supported by other documents to which it refers. Other documents can be:

THE PROPOSAL

Your proposal demonstrates your complete understanding of the client's requirements, your ability to satisfy that brief and the action that you are going to take in order to deliver that requirement.

SCHEDULE

Agreed start date, delivery date and progress points during the project where action needs to be taken by either you or the client (or related party) in order to enable the deadline to be met.

TERMS AND CONDITIONS

The standard terms under which you conduct your business.

Your standard T&C play an important role in protecting your business. This document lays down the standard way in which you do business and can include your credit terms, cancellation of work by the client - and any conditions attached to this such as when a cancellation fee is payable by the client, copyright ownership issues, obligations by both parties in undertaking work, any liability issues. Your contract also plays a very important role in documenting the terms of your service with regard to IR35. Your contract should therefore accurately reflect your role, please see our IR35 section for more details here. The PCG has freelance contracts available for members, or you can ask a legal expert to prepare one for your services, which you can adapt to each new client's details.

The pointers below are just some of the factors you need to consider when finalising negotiations with a client on a project.

INTERVIEW YOUR CLIENT

Before you start work on any project, hold a briefing meeting with the client and interview them thoroughly on what their objectives and requirements are. It is a very worthwhile way to spend your time to prevent any possible misunderstanding later that may cost you dearly. Interview them about the project, even if you have had a new business meeting where you briefly covered this as a possible project when presenting your portfolio and even if the client is familiar. Background questions on corporate policy, what role your project will have in the big picture of their business, their payment terms can all prompt other questions you may not originally have thought of. Document every detail in the proposal and pull out key information relating to the terms for delivering the project for the contract.

If you are finalising costs at negotiation stage, you may want to undertake an initial section of the work before firming up on costs.

SOME BASIC CONTRACT DETAILS

If you are drawing up a contract yourself, we strongly advise you seek legal advice. The pointers below are intended for general guidance only:

Your company name, title, address, contact details.
Client company name, contact, address and contact details.
Assign the project a number and keep a record of this.
Enter as much information in the description of your services as possible - enter the what, when, why, how, where of your agreed brief with the client.
Add a line with the option to renegotiate the fee to allow for work of greater scope or duration should the requirement change mid-project.
Add a line detailing what happens if either party chooses to cancel the contract (if a client cancels mid-project, a line warning that your client will be billed for the time and effort expended and expenses incurred up to that point avoids problems later. If a client cancels a scheduled project before it is handed over to you, consider how much notice you require in order to obtain other work and add a "late cancellation" fee to compensate for income lost if they fail to honour this notice period. Also, consider your position should the terms change such that you are unable to fulfil a contract and need to cancel (perhaps the work is extended such that it would compromise another scheduled project - do you subcontract or cancel?)
Add your proposal as supporting documentation.
Add your schedule as supporting documentation.
Add your terms and conditions as supporting documentation.

Other points to include

Your costs

Are you charging by the hour or as a fixed price for the project?
Are you providing an estimate or a final quotation? (Add a line that deals with what happens if the project looks set to go over the estimate in your contract)
What does your cost cover?
How will you charge expenses to the client? (Agree on a list of what expenses can be charged back at the start)
Build in adequate project management time (to include travel time, time spent with the client, either in a discussion on the telephone or in meetings)
Ensure there are no other outgoings related to the job that are not catered for in the above - unforeseen expenses can eat into your profit margin.
Are you asking for a deposit up front?
What are your payment terms? (include notification of any interest charged on late payments)

SCHEDULE

It is worth devising a separate schedule if you need to build in progress sign off points, if you rely on any client input by a certain date in order to fulfil your promised delivery or if it is a complex project. Generally, schedules are a good way of educating your client on how you work since they can see how the project is to be completed step-by-step (and therefore how costs are allocated too). It also gives you a backup if your deadline slips and you can then go back to the point where they agreed their interim approval process would only take 2 days - which turned into 5.

Use contact reports as a way of confirming in writing any client changes or requests that impact the end delivery date. (A contact report is a short memo-style document headed up with date/place/participants of conversation, followed by body copy of what action was agreed needs to be taken, by whom and when. If the action is for your undertaking, e.g. additional work, add a line underneath that states how much the additional charge is and any agreed impact on the project overall - such as leeway on delivery date as a result of this extra work).

TIPS

Do not be afraid to ask the client to sign the contract (getting their signature is no guarantee they will pay but it does increase your chances.)
Add a clause that says the client accepts your terms by signing the contract
Add a line to say that your contract relates to the proposal, including schedule, and terms and conditions. In signing your client agrees to honour these terms, including an input required from them in the schedule to allow work to be delivered on time.
Consider carrying out part of the work to better assess the complexity and how long you will need to quote for.
Leave nothing open to misinterpretation.

More on dealing with clients as a freelancer.