Small Business Contract Series — What to include in a freelancer contract

What should a small business include in freelancer contracts?

This is the final article in our series exploring small business contracts. Today, we’re focusing on the contract that engages freelancers to help get excess work done. 

Note: this is not legal advice  

As your business grows and the work mounts up, you may need a helping hand on projects. Yet you might not be ready to commit to hiring another full-time staff member. That’s where freelancers come in. These free agents can help fill skill gaps and ensure you hit your deadlines. Question is, how do you secure their services?

Let’s take a look at the role freelancer contracts play in securely engaging contractors, and how to set one up for your business.

First, why use freelancers?

These days, it’s fairly common for businesses large and small to hire freelancers. Indeed, the ‘gig economy’ now accounts for more than a third of the Australian workforce, with an additional 900,000 people working a side gig on top of their day jobs for extra cash.

The benefits add up. First, there are the cost savings. Hiring freelancers can be significantly cheaper than hiring full-time employees, as you don’t have to provide leave entitlements or deal with overheads like office space and equipment.  

Then there’s the flexibility that comes with hiring workers for short-term projects, seasonal workloads, or even ongoing work. You can bring in niche talent to contribute to specific project requirements — no strings attached. It’s easy to scale or adapt your workforce as your needs change, without being locked into long-term employment contracts.

Not to mention the fact that freelancers are generally very productive. They get their work done without distraction, and have a great reputation for delivering high-quality work. Plus, they can bring fresh perspectives and new experiences, which can help stimulate creativity and innovation within your team.

To hire a freelancer, you’ll need a contract 

Freelancers are free agents, meaning they could come or go at a moment’s notice. To help protect your business from risk, it’s recommended to use a freelancer contract complete with specific milestones, guarantees and payment information. This way, both you and the freelancer know exactly what’s required and who’s responsible for what.

The specific clauses that go into your freelancer contract will depend on the nature and duration of the work required. There’s no singular formula, which is why you should always get your freelancer contracts reviewed by a lawyer before sending out into the world.

That said, most contracts will contain some common elements, including:

All the basics:

• Contact information for both your business and the freelancer

• The date the contract is entered into

• A clear and concise explanation of the project, including its purpose, deliverables, and any specific requirements

Scope of work:

• A detailed breakdown of tasks

• Milestones and deadlines for deliverables throughout the project 

Payment:

• The hourly rate, project rate, or any other agreed-upon compensation structure

• Payment schedule, including when and how payments will be made

• Any expenses that will be covered and how they will be reimbursed

Ownership and copyright:

• Specify who owns the copyright to the completed work

• Define any rights around using your existing intellectual property (or the freelancer’s) in relation to the project

Other considerations:

• Confidentiality clause to protect both parties’ confidential information

• Conditions under which the contract can be terminated by either party (e.g. breach of contract, non-payment)

• Specify how any potential disputes will be resolved

Once you’ve written your contract and had it checked over by a lawyer, then it’s ready to send. To make the contract legally binding, you’ll need signatures from both parties. The most secure way to capture these is with Docusign eSignature, which comes with enterprise-grade security and compliance controls without sacrificing the user experience. Plus, it’s an easy and convenient experience for freelancers — which can help build a great first impression with new contractors. 

With your freelancer contract in hand, you’re ready to find the right person or people to help grow your business or get a key project off the ground.