As a freelancer, you’re most likely to be on your own, and so every aspect of working for clients is something you’ll need to know and understand to do it successfully.

One of those tasks is client contracts and understanding what’s typical with a contract and why they’re so important to making sure you get treated fairly and paid on time.

In this guide, we’ll look at what every freelancer should know before signing their next client contract.

Why handshake deals still get people in trouble

Handshake deals were often the traditional way to make a deal, but doing that nowadays would be a lot riskier and problematic, to say the least. There are many reasons why handshake deals can get people into trouble.

Difficulty proving terms

Without a written record of what’s been agreed, it’s effectively your word against theirs. That means proving the terms of your agreement over a handshake is a lot harder if it hasn’t then been formally written out into a contract.

Payment disputes

This is a common issue when agreeing to a project over a handshake. If payment terms, pricing, and late fees weren’t clearly documented, then a client may end up delaying or refusing payment. That makes it harder for freelancers to chase invoices effectively and ultimately, get paid.

Lack of legal protection and an exit strategy

With a formal contract in place, it often provides provisions for worst-case scenarios. Handshake deals will leave freelancers exposed, as there’s no agreed-upon process for when the business relationship ends fairly. 

That can make it hard to back out of a deal when it’s going south, and for getting paid, too.

The must-have clauses that protect your time and income

Several must-have clauses within your contract will protect both your time and income.

Firstly, make sure you’ve outlined clear payment terms so that if there we any legal disputes, you’ve got evidence of when you should have been paid. A company like GDH Law will help with such disputes if there’s a requirement for legal to get involved. Along with this, you should have late payment fees and penalties in place, too. 

Expenses clauses are helpful when you might need to cover additional project-related expenses like travel costs or specific software licenses, or tools required to purchase.

Cancellation clause helps you get compensated for work that has been completed, particularly where the client cancels and the project ends prematurely. This clause should include any specifics when it comes to the initial deposit paid and outline how your work in progress is invoiced.

As a freelancer, it’s an incredibly challenging career path to navigate, and client contracts are the basics in keeping you protected legally and financially. Make sure to speak to every client and draft up a contract that can be signed by both parties to legally legitimize the work that’s being done. Otherwise, all of your hard work is put at risk, and you could end up out of pocket.