Legal Agreements: Do You CYA?
As a freelancer, it’s sometimes easy to do a deal on a virtual handshake and feel confident that you know exactly what your client wants. Usually, this is because they told you exactly what they “think” they want – but that’s a post for another day. For the most part, doing business this way is just fine.
CYA (Cover Your, er, Butt) is a common term in business, and freelancing shouldn’t be any different. Misunderstandings about the work expectations can be costly in either your time or your money, or both. Many people think contracts and NDA (Non Disclosure Agreements) are only there to protect the client, but if you set them up properly, they can cover your butt when you need it most.
What kind of legal agreements should freelancers consider?
- Confidentiality Clause – Contract stating that no confidential information will be shared about you or your clients business.
- Statement of Work – What the project consists of. A very specific document to outline exactly what the client is paying you for.
- Terms of Payment – information that should be on each invoice as to how and when you should be paid. And from a previous post, here are eight things that you should include in your Terms of Service agreement.
- Change Order Agreement – a document that covers the specifics of a change outside of the original scope.
It’s not fun to formalize everything, but it’s a lot less fun to not get paid for the work you’ve done, or lose a client over a misunderstanding.
If you sign up with elance.com, you are allowed to use these sample contracts if they fit your needs.
There are some freelancers who have already learned the hard way the value of some of these contracts, and I’d love to know any tips or tricks you use to ensure you cover your butt while communicating your needs to your clients.
I absolutely agree about the importance of these formalities.
But I don’t set up extra contracts. Instead I already include the following items in my quotes or bids:
- a desciption of the work, as detailed as possible
- milestones
- dates and deadlines
- hourly rates for changes after signed-off milestones
- terms of payment
- usage rights for the client
- rights for myself to use the work in my portfolio
Marc
I think this is so important, sometime we trust people so much but sooner or later “PAPERS TALK”. So cover you back.
Great post. I admit, the legalities of things generally leave me cold, but I did enjoy this post!
Anyone have any resources to share on how to recover on unpaid work without spending more than you are owed in legal fees?
awesome point here – CYA is something that i preach to everyone i know! – i am the developer that will meet you at starbucks and have a project conversation like we are old friends, then as soon as you get home there will be a scope of work proposal for you to review and sign… getting stuck building the same website twice for the price of once is never fun!
great post!
Good post and it is really important to cover yourself as a freelancer. Spend a little time and get some contract together it will be well worth it.
Absolutely – every freelancer should work some CYA into their working agreements/contracts. Make them as simple and straight-forward as you can and collect a deposit before beginning any work. If you don’t CYA, you’re gonna get burned.
It would be nice to see more information/perspectives on how to handle situations with clients who insist on using their own contracts/working agreements.
I have a client that is looking for exclusive ownership to everything that is developed on his website. He’s veto’d my initial contract which states that I will grant a non-exclusive license for the use of design and programming created for his project. It’s a big project so I understand his concern of wanting to own everything completely.
He’s modified the agreement to gain Exclusive Ownership except what I define under “Preexisting Materials” of which I cannot / will not pass ownership to. Can anyone help me compiling a list of items that I’ll need to add here to cover my butt? By granting “Exclusive Ownership” would that jeopardize my career in any way?
Any help here would be greatly appreciated, thanks!
-Sam