Legal contracts play a significant role in setting up business relationships and conducting business transactions. No matter if you are starting a new business, a freelance career or hiring a freelancer. You will need legal agreements to pursue your dreams at any point in life.

For freelancers, legal agreements set the rules for project requirements, deadlines, results, payment schedules and methods. Once everyone signs the agreement, it becomes legally binding. Legal contracts help you to build trust with clients, set clear expectations and improve satisfaction with project outcomes.

If you don’t have a legal contract for your freelance work. It is the right time to create one. This will help you to avoid misunderstandings and any possible legal disputes in advance.

In this blog post, I will talk about 5 essential contracts every freelancer should have. You can also download these legal contracts from The Cut Jen Stone website and modify them to suit your requirements.

1. Independent Contractor Agreement

Independent contractor agreement also known as a “ Freelancer Agreement.” It is an agreement between two or more parties who want to work together on a project or a series of projects.

This document outlines the terms and conditions of your work with others. It clarifies the work requirements, timelines, deliverables and payment details. Independent contractor agreement explains your status as a non-employee.

Being classified as an employee can wrongly affect your tax and liability implications. You can also use this document to outline your services to a client and cover these important details.

2. Non-Disclosure Agreement (NDA)

As a freelancer, you may get information about your client's business that must remain private. This could be business plans, client lists, unique processes, secret credentials and financial details. Your client will want to stop you from disclosing any confidential information. This is where a non-disclosure agreement (NDA) comes into play.

NDA also known as “ confidentiality agreement” builds a confidential relationship between the hiring company and freelancers. This legal document outlines the scope and duration of the agreement and the consequences of a breach.

It ensures that the freelancer will not share any sensitive information they may obtain with others. To protect both parties it is important to create a mutual non-disclosure document of any confidential information.

NDAs are legal documents that create a confidential relationship. It clearly explains how sensitive information won't be shared with competitors or anyone else.

3. Intellectual property agreement (IPA)

An intellectual property agreement (IPA) is a contract that explains the terms and conditions of intellectual property rights between a freelancer and its customer. This agreement outlines the transfer of intellectual property rights between parties.

Intellectual property rights can include patents, trademarks, copyrights and trade secrets. It protects the owner's ideas and inventions. They set clear rules about who owns them, how they can be used, and how they can be licensed.

In case of freelancers, they are not the owners of their work as they get paid in exchange for their work. So the client has complete intellectual property rights of their work. Clarify who owns the ideas and creations made during the project. Indicate if the client will have exclusive rights or if the freelancer will keep certain rights.

Specify the client has clear rights to any material they pay for. Mention if the freelancer keeps rights to any material they have created that the client hasn’t paid for. Additionally, provide details on the use of any pre-existing materials owned by you or the client.

4. Service Level Agreement (SLA)

A Service Level Agreement (SLA) is a contract that defines the level of service a freelancer is expected to deliver. It is important to ensure quality and timeliness in freelance work. It establishes clear performance standards, which help manage client expectations and serve as a benchmark for evaluating the freelancer's performance.

Service level agreement outlines the specific services the freelancer will provide. This includes the scope of work, including the tasks to be completed and the standards to be met.

It tells everyone what level of service will be given, including how quickly you'll respond, how often you'll be available and how well you'll perform. SLAs make sure everyone knows what to expect and help you provide high-quality service. They also help improve the service and manage risks.

If the freelancer fails to meet the agreed performance standards. Penalties for non-compliance can include fee reductions, additional work at no extra cost or contract termination. Including penalties in the SLA helps ensure accountability and motivates the freelancer to meet the agreed-upon standards.

5. Statement of Work (SOW)

A Statement of Work (SOW) is a detailed document that outlines the specific tasks, deliverables and timelines for a project. It is crucial to set clear expectations and ensure that both the freelancer and the client have a mutual understanding of the project's scope and objectives.

Statement of work (SOW) defines what the project aims to achieve. It provides a clear direction for the work and helps ensure that all efforts are aligned with the desired outcomes. This legal document also outlines what the freelancer is expected to produce.

It includes detailed descriptions of each deliverable, as well as the criteria for acceptance. SOW also highlights the timeline and deadlines for the project's completion. It includes start and end dates, as well as deadlines for each milestone and deliverable.

Conclusion

Having the right contracts in place is vital for freelancers to protect their interests and maintain professional relationships. These legal templates protect you and your business/career from any legal disputes. They clearly outline each person’s roles and responsibilities. It mentions the member’s rights, duties and regulations in a business partnership.

Using legal templates helps freelancers create clear and strong contracts that fit their needs. Getting these important contracts such as independent contractor agreement, intellectual property agreement (IPA) and non-disclosure agreement (NDA) can prevent legal problems. These legal contracts also help freelancers to build good and reliable relationships with their clients.