How to protect your freelance business

Freelancers: Approach - Think Worst Case Scenario

When starting your first client project as a creative freelancer, it is vital that you plan ahead thoroughly to legally protect yourself as an individual or trading company.

Look ahead before you start the client’s project. Make adequate contingency allowances for unforeseen circumstances - in other words, things that could go wrong.

Never assume that anything to do with the service you will provide will happen as you planned it; assume you are going to make less money than you anticipated; assume the money will take longer to come in than you thought it would; and assume that things you plan to do are actually going to take longer than you expected.

If you make these adequate allowances for contingency, in terms of margins for both time and money, then you won’t be unpleasantly surprised when one of the things you intended to happen doesn’t go to plan, because sooner or later; that will certainly happen.


Freelancers: Action - Get it in Writing

A written contract is generally going to be better, than an oral agreement, provided the 'magic' is not in having it written, but in the fact that the writing actually preserves the words. If you have a written contract, you have a tool for preserving certainty.

The key point about having a contract in writing is that the wording needs to be clear and unambiguous. If it is, the written contract is a record of the joint vision that both parties had at the outset of the commercial relationship.

A written contract provides reference points to which if the work or project begins to drift off track or falter, then you can look back at them to get the project back on course. Moreover, if the contract is properly drafted it should provide contingencies for events that might actually happen. This helps you avoid disputes and the associated costs of lawyers and court hearings.

All employees who decide to take the ‘odd job on the side’ or ‘make the jump’ into freelancing full-time would be wise to put the terms of service they agree to provide in writing. This is recommended even if the individual simply puts the terms in writing to the client, alongside a letter of engagement, spelling out ‘this is what I am going to do,’ ‘this is how I am going to do it,’ in so far as how the individual is affected, and ‘this is what you have agreed to pay me for my service.’


Freelancers: Advice – Grab a Standard Contract

If individuals don’t know how to write or frame a contract for services, it is not advisable that they begin this process alone. Members of the Professional Contractors Group, the freelance trade group, have access to the PCG contracts library. One of the PCG documents – Draft Standard Terms and Conditions – is very suitable for small jobs for the creative person starting out as a freelance or self-employed worker.

Alternatively, creative freelancers could approach their industry’s professional associations or trade groups to obtain a suitable contract, or even ask them for suggestions about words to insert in order to tailor the contract to their services.

When writing a contract for services or tailoring a standard contract for services, the individual must use simple, clear and unambiguous English. Don’t try and translate into legalese.


Freelancers: Articulate – Speak up if it’s Secret

Legal disclaimers at the bottom of e-mails are common in most industries. But for the one-man creative company, the suitability of these disclaimers depends on the content of the e-mail they author. Does the message contain something that could cause commercial risk or commercial upset? If so, the disclaimer is a must.

One example common to freelancers is the emailing of an idea for how to approach a client’s project. Although it may not solve the dispute, if the client then refuses the worker’s services, to subsequently proceed using that very idea, a legal disclaimer would offer the worker more protection.

In general, if you intend that what you are saying in your e-mail should be confidential then you must clearly say so, by spelling out in the footer of the email that the information within is only for the recipient.


As told to FreelanceUK by Roger Sinclair, a legal consultant with Egos, a contract and commercial law advisory. He specialises in legal issues affecting individuals who provide a service, particularly to the IT, Entertainment and Media industries.


May 9, 2008
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