Picture this: You’ve just completed a major project, investing countless hours and your best creative energy. But when it’s time to get paid, your client goes silent, disputes the deliverables, or demands endless revisions.
Sound familiar?
If you’re nodding your head, you’re not alone – and your contract might be the culprit.
A recent study by the Freelancers Union found that 71% of freelancers have struggled to get paid at some point in their careers, with the average freelancer losing $6,000 annually due to payment issues.
Make sure it includes these essential clauses to safeguard your business:
1. Crystal-clear payment terms
“Net 30” or “Upon completion” aren’t good enough anymore.
Specify exact payment dates and amounts:
- 50% upfront deposit before work begins
- 25% at project midpoint (clearly defined)
- 25% upon final delivery
- Payment due within 7 business days of invoicing
Include accepted payment methods and currency specifications. One of my clients in Europe assumed they could pay in Euros when my contract specified USD, causing unnecessary complications.
2. Bulletproof scope definition
Scope creep can turn a profitable project into a money-losing nightmare.
Include:
- Detailed deliverables list
- Timeline with specific milestones
- What’s explicitly NOT included
- Process for handling scope changes
If you don’t define scope, your project will define it for you – usually at 2 AM when you’re trying to meet an impossible deadline.
Jason Fried, Basecamp founder
3. Revision limitations
Endless revision cycles eat into your profitability and sanity.
Clearly state:
- Number of revision rounds included (typically 2-3)
- Timeline for requesting revisions
- Hourly rate for additional revisions
- Maximum response time for feedback
4. Kill fee protection
Last-minute cancellations can leave you with blocked time and no income.
Include a cancellation clause specifying:
- 50% kill fee if cancelled within 5 business days of project start
- 75% kill fee if cancelled after work has begun
- 100% fee if cancelled after final delivery
5. Late payment penalties
Late payments affect your cash flow and business operations.
Implement:
- 5% late fee after 7 days
- 1.5% compounding monthly interest
- Work pause clause if payment is 14+ days late
6. Intellectual property rights
Clients using your work before paying in full.
Include:
- Clear IP transfer terms
- License limitations until final payment
- Usage rights specifications
- Portfolio usage rights for yourself
7. Termination clauses
No clear exit strategy when things go wrong.
Define:
- Notice period requirements
- Payment for work completed
- Final deliverables process
- Data/asset handling post-termination
8. Confidentiality provisions
Sensitive information protection gaps.
Specify:
- What constitutes confidential information
- Duration of confidentiality
- Permitted uses of information
- Return/destruction of confidential materials
9. Indemnification protection
Liability for client-provided materials or decisions.
Include:
- Client warranties for provided materials
- Limitation of liability clause
- Professional liability insurance requirements
- Force majeure provisions
Implementation tips
- Get Legal Review: Invest in professional legal review of your contract template.
- Use Plain Language: Make your contract readable and understandable.
- Create a Contract Checklist: Review each clause before sending.
- Stand Firm: Don’t waive important protections, even for “dream clients.”
The best time to fix your contract was before you needed it. The second best time is now.
