How to make a freelance contract.

Scope of services.

A definition of the scope of the services to be provided should be detailed in the contract. Include specific deliverables, milestones, timelines, delivery schedules, and any other specific requirements.

Term and termination.

Outline the duration of the contract, including expected start and finish dates. State the conditions under which either party can terminate the agreement. Include notice periods and any penalties for early termination.

Pricing and payment terms.

Specify the charges you are agreeing to for the provision of your services. Include the total amount and whether your work is based on a fixed price basis or an hourly rate. Detail any additional fees or costs that may be chargeable, as well as any applicable taxes, such as GST. Specify your payment terms and conditions. For example, invoicing procedures, due dates for payment, payment methods accepted, penalties for late payment, discounts for early payment, and so on.

Intellectual property rights.

Define the ownership rights to any intellectual property created or used during the provision of services. Include any licensing requirements, restrictions, and confidentiality obligations.

Confidentiality and non-disclosure.

Include clauses to protect sensitive and confidential information exchanged during the contract term. Outline any obligations of both parties regarding confidentiality and non-disclosure of information to third parties. State any data protection requirements.

Warranties and guarantees.

Define any warranties or guarantees regarding the quality of services, performance standards, or specific outcomes. Include procedures for addressing guarantee or warranty claims.

Laws and regulations.

Specify compliance requirements for regulations, industry standards, and legislation throughout the term of the contract.

Insurance requirements.

If applicable, include clauses where certain types of insurance coverage are required of one or both parties, such as liability or professional indemnity insurance.

Reassignment and subcontracting.

Specify whether either party can assign or subcontract any of their obligations under the contract and under what conditions any subcontracting is permitted.

Non-compete, exclusivity, and restraint of trade.

Consider whether you need to include non-compete, exclusivity, and restraint of trade clauses in your contract as an independent contractor. These clauses are also often included in other contracts, such as employee contracts and contracts for the sale of a business. They are included to prevent a party from working or collaborating with any competitors after the contract ends for a specified period.

Dispute resolution procedures.

Establish methods and procedures for resolving any disputes, such as negation, mediation, or arbitration. State clearly who is responsible for covering legal costs in the event of any disputes.

Liability and indemnification.

Specify each party's liability limitations and indemnification obligations should there be any breaches, damages, or legal claims arising from the services provided.

Changes and amendments.

Outline the process for making changes or amendments to the contract and any requirements for written consent from both parties.

Severability.

Include a severability clause that states if any other clause in the contract is found to be invalid or unenforceable, the remaining clauses in the contract will still be valid. A severability clause eliminates the need to create, agree to, and sign an entirely new contract should this happen.

Use plain language.

Write in plain, understandable language that both parties can easily comprehend. Avoid using overly complex terminology. While some legal terms may be necessary, try to avoid using unnecessary and dense legal terminology. Use plain language equivalents whenever possible.

Keep sentences and paragraphs short.

Long, complicated, and rambling sentences can be difficult to read and follow. Keep sentences and paragraphs short and to the point.

Avoid ambiguity.

Clearly define terms and concepts to prevent uncertainty. Ambiguous language can lead to misunderstandings and disputes.

Break down complex concepts and acronyms.

If your contract involves technical or specialised terms, provide definitions or explanations to ensure your clients understand what they mean. If you do use acronyms, explain what they stand for the first time you use them. For example, Portable Document Format (PDF).

Be specific and detailed for both parties.

Clearly outline the rights, responsibilities, and expectations of both parties. Use clear and concrete terms and provide specific examples when necessary.

Use headings and formatting.

Structure and organise your contracts using headings, bullet points, numbered lists, and bookmarks. This makes them easier to navigate and understand.

Consider incorporating visual aids.

In some situations, visual aids such as tables, diagrams, or flowcharts can help to clarify processes, timelines, and deliverables. These can be incorporated within a contract or attached as appendices, if appropriate.

Review your contract.

Before finalising your contract, always check that both parties understand the terms and conditions. Consider getting another neutral person to read your contract to test whether it is written in a way that is easily understood. Seek feedback from legal experts if you have any doubts about the wording before you present it to a client or sign a contract yourself.