Your contract: key commercial factors
Your circumstances will differ depending on whether or not you work directly with your client or you supply your services via an intermediary e.g. a recruitment agency. Regardless of exactly who is party to your contract, the key fundamentals will always remain the same and you should never underestimate the importance of having in place a written agreement detailing the services to be provided, the charging structure to be followed and making reference to any relevant timescales.
With this in mind, we have developed the following list of top tips to assist you in minimising your risk.
The written contract
- Avoid verbal contracts at all costs and ensure that you have a written agreement detailing clearly the services you are expected to provide along with any key dates for delivery.
- What provisions are made to revise the description of services if necessary? Can you also re-negotiate the fee?
- Can you charge VAT on your fees?
- Look at your payment terms. Do they dictate exactly how invoices are to be submitted? When will you get paid? If you employ staff will you receive the money in time to pay them? Can payment be withheld for any reason?
- What level of insurance cover is required under the contract? Does your policy contain an exclusion that means that you are accepting liability for a risk you are not insured against?
- Is your agency or end client attempting to prevent you from taking legal proceedings against it should something go wrong?
- Check exactly what agreed to be liable for. Do you need to correct defective works? Are you going to be required to meet the expense of a replacement freelancer should you be unable to deliver the services?
- Who owns the intellectual property rights in any material you produce? Having a clear understanding of what all parties intend at the outset will reduce the chances of problems arising further down the line. Be particularly careful if you are using a recruitment agency and make sure that all parties have the same understanding.
- Be familiar with the termination provisions.
- How can the contract be terminated? What are the consequences for early termination?
- Is there a notice requirement? It is not uncommon for monies to be withheld by clients and agencies if a freelancer does not comply with termination provisions.
- How is notice given? If the contract provides for you to give it in writing to the client/agency's head office then make sure this is how you give it. If you give verbal notice follow it up with written notice.
- If you employ staff to assist you in providing the services does the notice period you are required to give them tally with the notice period the client/agency is required to give you?
- If you contract via an agency then you will also need to be aware of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and how they apply to you. If you work via a limited company you can elect to opt out of them but this will have implications for the level of protection you may be accorded in relation to matters such as working for the client direct or withholding of fees.
Where you have the luxury of being able to contract on your own terms then you will be able to maintain a degree of control over the content and in particular the terms detailed above. If not, you may be asked to contract on standard terms and conditions with little or no scope for amendment. Even so, this should not prevent you requesting changes if the provisions are commercially unacceptable to you.
Article provided by law firm DWF Solicitors LLP.
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