If there’s one takeaway from this blog post, please let it be this: Contracts are there to be negotiated.
Many freelancers panic when a client pushes back on their terms, but this should be a normal part of the negotiation stage. Similarly if your client introduces terms that don’t sit right with you, have the confidence to open discussions.
Establishing what you are and aren’t willing to compromise on
What is your non-negotiable with your contract? Asking this question is an excellent way of understanding what boundaries you’re absolutely not willing to budge on.
If a client is being tricky with your non-negotiable, maybe the relationship isn’t right. It’s best to discover this before work begins.
When I was a wedding photographer my non-negotiable was my turnaround time. It always made me feel uneasy if a client was being pushy about a quicker turnaround.
I had a backlog of other weddings to edit, and I wasn’t going to prioritise a more recent wedding because the client was difficult. Also, I carefully selected my turnaround time because I factored in my work / life balance. Clients that didn’t respect this were a red flag.
After settling on your non-negotiables you can think about your nice-to-haves. These are clauses you’re open to removing or compromising… if a client asks you to.
Why is it important to establish this before onboarding clients? Instead of flapping when clients push back, we know from the outset if these terms are something we’re willing to negotiate on or not. It minimises time wasting and reduces the risk of making poor decisions because of panicking.
What’s at risk with this project?
Every project is different, so it’s OK if the contract requires a little tweaking on a case-by-case basis. Think about what your client is looking for out of the deal as well as yourself.
Because your role might look different for each project, start by identifying where your risk lies at the beginning of each project.
- Developers working on an e-commerce website will want to consider what’s at risk if a bug causes products to be offline for a period
- Graphic designers working on packaging are at risk of expensive reprints if a mistake is discovered after the packaging has went to print
- Marketers responsible for managing ad campaigns face the risk of accidentally overspending or targeting the wrong audience
Now you’ve identified where your biggest risks lie, it’s over to you to manage that risk throughout the project. However, here are some contract clauses to consider that will also pair nicely with your insurance and give you some control.
Clauses to consider including in your contract
Limitation of liability
You can include a contract clause that limits the amount of damages a client can claim against you. Insurers love when freelancers do this because it minimises the risk of excessive claims.
How do you know what that number should be? Some freelancers limit it to the fees they’ve received for a project, and others cap it at their level of professional indemnity.
You should limit your liability as much as possible whilst also considering the Unfair Contract Terms Act 1977. If the cap is considered unreasonable or unfair to your client, then it will be unenforceable.
In our experience, most people limit their liability to match their professional indemnity level of cover. You can find this on your insured schedule.
Appropriate insurance limits
If a contract asks you to carry £2,000,000 of professional indemnity insurance but you only have £1,000,000, you’re now in breach of the contract.
Check contracts for the insurance limits. You can either amend your existing policy to adhere to the terms, or (and especially in the cases where clients are asking for excessive levels of cover) negotiate on the insurance limits.
Some clients use a boilerplate contract for all contractors, big and small. These can include unreasonable terms for a freelancer so it’s worth reviewing and negotiating.
Another thing to be mindful of is the length of time a client asks you to be insured for. Some freelancers cancel their insurance once their project has ended, yet the contract states they should hold insurance for a period after work has ceased.
This is because historical issues can arise or errors are picked up on only once a project has gone live. Make sure you’re not breaching your contract by cancelling your policy.
Termination clause
I’m surprised by how few freelancers have a blueprint for themselves and their clients to follow when it comes to ending a project prematurely.
If it’s a fixed term contract without any termination rights then you’re stuck. This can be an awful situation to find yourself in—especially if working with a tricky client, or if the project changes over time and is no longer suitable for you.
The termination provisions in your agreement should cover things like:
- notice period. How much notice does either party have to give to end the contract?
- the handover process
- data retention (if applicable)
Include a termination clause in your favour to get out of a loss making contract.
Dispute resolution
All good contracts should include a clear dispute resolution clause that outlines the process of resolving conflicts without court.
Dispute resolution is where both parties agree to use their best efforts to negotiate and settle any disputes. Where they’re unable to do so, the contract will usually suggest mediation as the preferred next step.
Depending on what cover you have you may find your contract of insurance states the insurer will try to resolve your dispute by arranging Alternative Dispute Resolution, such as mediation.
When outlining how both parties should resolve any conflicts, be sure to include the jurisdiction the agreement is governed by. This is especially important if working with clients outside of the UK. Handling disputes under UK law is simpler and more straightforward.
Again, this ties into your insurance nicely because most professional indemnity policies exclude US and Canada jurisdiction by default.
Further resources
- Contract clauses for clients that ghost you mid-project
- Contract reviews
- Busting a common freelancer myth. “I don’t need insurance because I have a contract”
With Jack is an insurance broker. We’re not contract lawyers. It’s a good idea to have a solicitor create or review your contract for you.
