How to Write a Freelance Contract (Clauses & Tips)

A freelance contract is the single most valuable document in your independent career. Without one, you’re relying on trust, memory, and good intentions to get paid for your work. When those fail — and they will eventually — a signed contract is the difference between collecting your fee and writing off the loss.

This guide covers every clause that belongs in a freelance agreement, explains why each one matters, and shows you how to handle the situations that cause the most disputes between freelancers and clients. If you need a contract right now, our free Contract Generator produces professional service agreements with all of these clauses built in.

Why Every Freelancer Needs a Written Contract

The most common objection to contracts is that they feel adversarial. “We trust each other” or “it’s just a small project” are phrases that have preceded countless unpaid invoices.

A written contract protects both sides equally. For the freelancer, it guarantees payment terms, defines what work is included, and establishes ownership of the deliverables. For the client, it ensures they receive the work they are paying for, on schedule, and at the agreed quality standard.

Courts treat written contracts with far more weight than verbal agreements. If a client refuses to pay and the matter escalates, your contract is the primary evidence. Without one, proving what was agreed becomes a matter of “he said, she said,” which is expensive to litigate and uncertain in outcome.

Even small projects benefit from a contract. A one-page agreement covering scope, payment, and timeline takes five minutes to prepare and can save months of frustration.

The Scope of Work Clause

Scope definition is the single most contested area in freelance relationships. This clause determines what work you are obligated to perform and — just as critically — what falls outside the agreement.

How to Define Scope Effectively

Bad scope definitions are vague: “Design a website.” Good scope definitions are specific:

Scope of Services:
- Design homepage layout (1 concept, 2 revision rounds)
- Design 4 interior page templates (About, Services, Contact, Blog)
- Responsive design for desktop, tablet, and mobile breakpoints
- Deliver source files in Figma format
- Does NOT include: copywriting, stock photography, coding/development,
  hosting setup, SEO optimization, or ongoing maintenance

The “does NOT include” section is as valuable as the inclusion list. It sets a boundary that both parties can reference when new requests appear mid-project.

Preventing Scope Creep

Scope creep is the gradual expansion of project requirements beyond the original agreement. It’s the number one profitability killer for freelancers. Include these protections:

Change order process: Any work beyond the defined scope requires a written change order signed by both parties before work begins. The change order specifies the additional work, the additional cost, and the impact on the timeline.

Hourly overflow rate: If the client requests small additions that don’t warrant a formal change order, define an hourly rate for out-of-scope work. This gives both sides flexibility while ensuring you are compensated.

Revision limits: Specify the number of revision rounds included in the price. “Two rounds of revisions” means the client can request changes twice. After that, additional revisions are billed at your hourly rate.

Payment Terms and Schedules

Payment disputes are the second most common source of freelance contract conflicts. Clear payment terms eliminate ambiguity and protect your cash flow.

Deposit Requirements

For new client relationships, require a deposit before starting work. Industry standards vary:

• 25% deposit: Common for established relationships or lower-risk projects
• 50% deposit: Standard for new clients, large projects, or custom creative work
• 100% upfront: Used for small, clearly defined deliverables under $1,000

The deposit demonstrates client commitment and ensures you aren’t investing significant time in a project that may be cancelled before payment.

Payment Milestones

For projects exceeding $5,000 or spanning more than 30 days, milestone-based payments reduce risk for both parties:

Payment Schedule:
- 30% upon contract signing ($3,000)
- 30% upon delivery of first draft / wireframes ($3,000)
- 40% upon final delivery and acceptance ($4,000)
Total: $10,000

Milestone payments tie compensation to deliverables. The client doesn’t pay the full amount until they’ve seen tangible progress. The freelancer doesn’t invest months of work before receiving any compensation.

Late Payment Penalties

Include a late payment clause with specific consequences:

Payment Terms: Net 15 (due within 15 days of invoice date)
Late Fee: 1.5% per month on unpaid balances (18% annually)
Work Suspension: All work will be paused if payment is more than
15 days past due, and will resume upon receipt of all outstanding
payments.

The work suspension clause is your most effective tool. Nothing motivates payment faster than the knowledge that the project stops moving.

Accepted Payment Methods

List all methods you accept: bank transfer, PayPal, Stripe, check. Include the necessary details (account name, PayPal address) so the client can pay immediately upon receiving the invoice. Use our Invoice Generator to create professional invoices with all payment details included.

Intellectual Property Ownership

Who owns the work product? Without a clear IP clause, the answer depends on your jurisdiction, the type of work, and the legal classification of your relationship — and the answer may surprise you.

Work-for-Hire vs. IP Assignment

Under U.S. copyright law, the creator of a work owns the copyright by default, even if someone else paid for it. There are two ways to transfer ownership to the client:

Work-for-hire doctrine: Applies only in specific circumstances defined by copyright law (employee works, or certain categories of commissioned works with a written agreement). Most freelance work doesn’t qualify automatically.

IP assignment clause: The freelancer explicitly transfers all rights to the client upon full payment. This is the standard approach in freelance contracts:

Upon receipt of full payment, Freelancer hereby assigns to Client
all right, title, and interest in the Work Product, including all
intellectual property rights therein.

Conditional Transfer

Many freelancers add a condition: IP transfers only upon full payment. This protects you if the client uses your work but refuses to pay the final invoice.

Intellectual property rights transfer to Client upon receipt of
full and final payment. Until all payments are received, Freelancer
retains all rights to the Work Product and Client may not use,
publish, or distribute any deliverables.

Portfolio Rights

Even when transferring IP to the client, retain the right to display the work in your portfolio:

Freelancer retains the right to display the Work Product in
portfolios, case studies, and professional materials for the
purpose of showcasing past work.

Some clients (especially those under NDA) may object to this. Negotiate before signing, not after.

Confidentiality Provisions

Most freelance engagements involve access to private business information. A confidentiality clause protects the client and defines your obligations.

The clause should cover:

• What constitutes confidential information (business plans, customer data, financial records, trade secrets)
• How long the obligation lasts (typically 2-5 years after the contract ends)
• Exceptions (information that becomes public through no fault of yours, information you already knew)

For highly sensitive engagements, consider a standalone NDA in addition to the contract’s confidentiality clause. Our NDA Generator creates standard non-disclosure agreements that pair well with a service contract.

Termination Clauses

Every contract needs an exit strategy. Termination clauses define how either party can end the relationship and what happens to incomplete work.

Termination for Convenience

Either party may terminate with 14-30 days written notice. The freelancer is compensated for all work completed through the termination date.

Termination for Cause

Either party may terminate immediately if the other party materially breaches the agreement and fails to cure the breach within a specified period (typically 10-15 days).

Kill Fee

A kill fee compensates the freelancer when the client cancels a project mid-stream. Without a kill fee, a client can cancel after you have turned down other work and blocked off your calendar, leaving you with partial payment and a gap in your schedule.

Kill Fee: If Client terminates this Agreement for convenience before
completion of all Services, Client shall pay Freelancer for all work
completed through the termination date, plus 25% of the remaining
unpaid contract value as a cancellation fee.

What Happens to Deliverables

Specify that upon termination, the freelancer delivers all completed work, and the client pays for everything received. Incomplete work-in-progress may be delivered at the freelancer’s discretion.

Liability and Indemnification

Limitation of Liability

Cap your total liability at the amount the client paid you. Without this clause, a client could theoretically sue you for damages that far exceed your fee.

In no event shall Freelancer's total liability under this Agreement
exceed the total Compensation paid by Client to Freelancer.

Indemnification

Each party agrees to compensate the other for losses caused by their own breach or negligence. The freelancer indemnifies the client against claims that the work infringes on third-party IP. The client indemnifies the freelancer against claims arising from the client’s use of the deliverables.

Dispute Resolution

Lawsuits are expensive and slow. A dispute resolution clause establishes a faster, cheaper path:

Mediation first: Require both parties to attempt mediation before any legal action. A neutral mediator can resolve many disputes in a single session for a fraction of litigation costs.

Arbitration as backup: If mediation fails, binding arbitration through the American Arbitration Association (or local equivalent) provides a final resolution without a full court proceeding.

Governing law: Specify which state’s laws apply. Typically, the freelancer selects their own state for convenience.

Additional Clauses Worth Including

Non-Solicitation

Prevent the client from hiring your subcontractors or team members directly:

During the term of this Agreement and for 12 months following
termination, Client shall not directly solicit or hire any
subcontractor or team member engaged by Freelancer in connection
with this project.

Force Majeure

Excuse both parties from obligations during events beyond their control: natural disasters, pandemics, government actions, or internet outages that prevent work.

Communication Expectations

Define expected response times, preferred communication channels, and meeting schedules. This prevents the situation where a client expects instant responses at all hours while you operate during standard business hours.

Frequently Asked Questions

Do I need a lawyer to create a freelance contract?

For most standard freelance engagements, a well-structured template provides adequate protection. Our Contract Generator produces professional agreements covering all standard clauses. However, for high-value contracts (over $25,000), complex deliverables, or unusual arrangements, investing a few hundred dollars in attorney review is worthwhile. The cost of legal review is a fraction of the cost of a contract dispute.

Can I use the same contract for every client?

A template-based approach works well. Keep a standard contract with your core terms, then customize the scope, payment, and timeline sections for each engagement. The legal framework (IP, confidentiality, termination, liability) stays consistent across clients.

What if a client refuses to sign a contract?

This is a red flag. A legitimate client who intends to pay has no reason to avoid a written agreement. The contract protects them too. If a client insists on working without a contract, consider whether the project is worth the risk. Most experienced freelancers walk away from clients who refuse to sign.

Should I have the client sign first or sign simultaneously?

Either party can sign first. The contract becomes binding when both parties have signed. Digital signatures through services like DocuSign or HelloSign create a timestamped record that both parties agreed to the terms. Electronic signatures are legally valid under the ESIGN Act.

How do I handle international clients?

Specify which country’s laws govern the agreement, the currency for payments, and the dispute resolution forum. Include a clause covering exchange rate fluctuations if billing in your local currency. International wire transfers can be expensive; consider services like Wise for lower fees.

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