Freelancers: What You Need To Know About Contracts And Service Agreements With Clients

If you just begun your foray into the exciting world of freelancing, chances are you would have to face the prospect of drafting freelance contracts or service agreements with your clients before beginning work with them.

Whether you engage a lawyer to draft a contract out or simply decide to have an email exchange, when you agree to freelance work with clients, you are agreeing to a viable working agreement for your effort, time and skills in exchange for clients’ fees.

As you focus on producing high quality work for your client, here are some aspects to look out for before signing freelance contracts to safeguard your interests.

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Indemnity Clauses

Besides checking if your prospective client is reliable and financially solvent, consider what kind of indemnity clause to include in your freelance contract.

An indemnity clause is extremely important because it indicates who would have to indemnify the other party if the other party is sued due to work produced by you as a freelancer.

For instance, you would not want your client to insist that you include information or images for your work without getting the required copyright clearance. You do not want to be ultimately left by your client in the lurch for you to rectify for any damages should external parties sue you.

Clearly Define Your Role As A Freelancer And Your Scope Of Work

Once negotiations are underway, clearly define your role as a freelancer and demarcate the scope of your work with your client. By properly indicating on paper what types of work you would and would not be doing, you would avoid a lot of misunderstandings in future should your client pile up new tasks for you to do without paying you more.

Moreover, agree with your client in writing on whether you would be allowed to freelance for other companies at the same time.

You might want to include a clause that indicates that clients would have to pay you additional fees to be mutually agreed on in writing if they wish additional work from you.

Payments Terms

Always ensure that the timeline for payments is written in black and white on your freelance contract. Indicate additional important details such as the billing structure (instalments or a full-fledged fee upon completion) and payment deadlines in your contract to ensure that all parties are on the same page.

To further motivate your client to pay you on time, include clauses about late payment penalties and a possible grace period for your client to pay if they have financial difficulties doing so.

You might consider including an interim charge clause in your freelance service agreement or contract to prevent the dire possibility of your client disappearing without paying a single cent after you have poured effort and time into completing a long-drawn project.

A common practice is to charge an upfront, non-refundable fee to ensure their commitment to whatever project you are working on.

CPF Contributions And Tax Liabilities

This situation is peculiarly unique to the Singapore context, but it is nonetheless crucial. As a freelancer, you are required under Singapore law to make Medisave contributions if your annual net trade income exceeds $6,000.

If you are a Singaporean freelancer, negotiate and agree with your client in writing on who will bear the responsibility of CPF contributions and tax filing. Chances are, you as a freelancer would be responsible for making your own CPF contributions and filing your own taxes, but some clients prefer to do it for all their in-house and freelance staff.

 Intellectual Property Rights

This point is a sensitive one especially if you are the type who is very attached to your work and what you produce. 

Your client might insist that whatever work you produce would belong to them. In these cases, a possible compromise would be to retain your rights of displaying your previous works on your resume when you hustle for other gigs with other clients.

Rejected Work Cannot Be Used By Client

To further protect your interests as a freelancer, include in your contract that any work that you produce that is ultimately rejected by your client cannot be used entirely or partially. Should the client use your work even though they have previously rejected it, their actions could be dealt with in court. 

Contracts Are Meant To Safeguard All Parties

While contracts and agreements must safeguard your interests as a freelancer, they should also be fair from your client’s perspective. Being trustworthy and having a client that keeps to their end of the agreement is the way forward for a long-term and rewarding partnership.

Read Also: Are E-Signatures Valid And Legally-Binding In Business Documents For Companies In Singapore?

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