Back 7 Things That Should be Part of Your Freelancer Contract

7 Things That Should be Part of Your Freelancer Contract

A freelance contract regulates your cooperation with a company as a freelancer. Here you can find out what you should pay attention to.

Dunja Reiber
Dunja Reiber

Jun 30, 2022

As a freelancer, a contract is very useful when you work for a company. Even if your client does not insist on it, a written agreement is recommended. Here you can find out which contents are important.

What is a freelancer contract?

A freelancer contract is a contract you close with your client. It contains the terms of your collaboration. It can be a contract for work (Werkvertrag) or a service contract (Dienstvertag) - you can learn more about this difference later in this article. You can use a template or tailor the contract to the project by writing it from scratch.

Do I need a freelancer contract?

You are not obliged to sign a contract with your client as a freelancer. You can also come to an agreement in a conversation or in a short email about which services are to be provided and at what price. This is often sufficient if it is a short project or a one-time service. You might also write an offer that defines the collaboration. If the customer accepts it in writing, this also creates a contract. However, this is usually less clearly defined than a comprehensive contract.

Especially for larger and ongoing projects, a separate freelance contract is highly recommended. It offers you the following advantages:

  • Clear expectations on both sides: It is clear for both you and the client what the general conditions of the collaboration are. In a preliminary meeting, you never discuss every detail. However, the contract gives you the opportunity to clarify even uncomfortable questions - for example, payment deadlines and prices for additional work.
  • Disputes are avoided: It can always happen that the cooperation turns out differently than planned. The more that is clarified in advance, the fewer points of disagreement can arise later.
  • Basis for legal action: Hopefully it will not be necessary, but in the extreme case the contract serves you as proof, for example if a customer does not pay.

Contract for work or for services?

As a freelancer, you do not enter into an employment contract with the company, but rather a contract for work (in German: Werkvertrag) or a service contract (in German: Dienstvertrag) that defines your freelance work. With a work contract, a fixed result is produced, for example a website is created, a logo is designed, or an app is developed. The service contract is used when you instead provide a service at an hourly or daily rate, for example, you provide consulting services. Even if you produce something, but charge per hour and not per work result, you have a service contract.

An important difference: With a contract for work, you owe the customer a finished result; with a contract for services, you "only" owe your work performance. Therefore, with a work contract, there may be trouble if a customer is not satisfied with the result. With a service contract, you have nevertheless fulfilled your obligations if you have worked for the client as agreed. Of course, even with this option you should also make sure that your customer is satisfied with the result.

Freelancer contract: What do I have to consider?

Your client and you can design the contract as you wish. The following seven points are not required by law, but are very useful for defining the framework of the collaboration.

1. Contracting parties and subject of the contract

At the beginning there is your name plus address and the same data of your customer. You also define who is the contractor and who is the client. Moreover you specify the subject of the contract, for example a logo design or project management support. This makes it clear whether it is a contract for work or a contract for services.

2. Services and prices

Here, the agreed services are defined in more detail, which is particularly important in the case of a contract for work. Your remuneration is also specified, i.e. either the hourly or daily rate or the price of the individual services. In the case of a contract for work, you should also specify which revision loops are included (as well as in which time period) and how unforeseen additional efforts will be remunerated, for example with an hourly rate. If travel costs may arise during the collaboration, it should be specified who will bear them.

3. Runtime and termination

A contract for work usually ends when the result has been delivered, whereas a contract for services can have a specific term or be for an indefinite period. Specify which notice period applies (it can be two or four weeks, for example) and when termination without notice is possible (for example, in the event of late payment or failure to deliver).

4. Rights of use

Even if you are the creator of your work, the customer receives a comprehensive right of use that is contractually defined. You can also specify, for example, the use of ideas and drafts that you develop in the course. Can the client also use these or only the finished products? Also relevant for a freelance contract: Does it allow you to mention and present the project in your portfolio?

5. Payment terms

Is it a one-time payment or do you invoice monthly? Is part of the sum due as an advance payment when the contract is signed? Think about which terms make sense for you. Specifying the payment period for invoices in the contract is optional, because if you do not define anything, the statutory payment period of 30 days in Germany applies. However, you can agree that an invoice must be paid after 14 days, for example. In this way, you will notice more quickly if a customer has a bad payment record.

6. Status of the freelancer

The freelance contract should include that you are free in the way you provide your services, can also work for other clients in parallel and are not bound by instructions. This should always be the case for you as a freelancer, otherwise there is a risk of false self-employment (Scheinselbstständigkeit) in Germany.

7. Other obligations

Depending on the company and the type of work, it may make sense to stipulate certain obligations for both parties. For you, this could be, for example, confidentiality obligations (although larger companies often use separate agreements for this) or the obligation to always use an updated anti-virus program. For the client, you can stipulate, for example, that they must provide you with all the information you need for your service and that they must respond to your requests within a certain period of time.

Check contracts of the client

Companies that regularly work with freelancers probably have their own freelance contracts. There is nothing wrong with this in principle, but you should take a close look at such a freelance contract and check whether it meets your requirements. It is formulated from the company's perspective and may contain points that are disadvantageous for you. If this is the case, it is best to discuss the issue with the potential client and try to find a solution that suits both of you.

If you don't want to take care of your contracts yourself, you can use 9am's contract templates that were developed by labor law experts. Sign up for free here.

Please note: This text does not replace legal advice and does not claim to be comprehensive on the topic. It is recommended that you consult a lawyer or use a legally secure template when drafting your freelance contract. 

Dunja Reiber

Dunja Reiber is a writer and content marketer specializing in Future of Work topics. She has worked in a content marketing agency and a software start-up before becoming a full-time freelancer.

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