How to Negotiate a Good Contract—Essential Tips from The Freelancer’s Bible
Every member of free agent nation can avoid headaches and profit financially and personally by reading the new book from Sara Horowitz with Toni Sciarra Poynter—The Freelancer’s Bible (Workman). I’ve read it, loved it, and marked dozens of passages useful to our own goals.
Horowitz is executive director of the Freelancers Union and CEO of the Freelancers Insurance Company; a MacArthur Foundation “genius grant” winner; and a pioneer for her work in establishing and advocating protections and services for independent workers. The new book is chock-a-block with tips and guidance on every aspect of being a freelancer or an independent consultant, with parts that include how to get started and find work to how to grow and manage your business.
The Bible’s tips on common contractual issues for freelancers are concise and complete. Here are some key takeaways:
- Scope and the Deliverables—Clearly define and quantify what you will deliver: nail down specs, and establish processes for reviews and meetings with your client; don’t forget to include a provision for additional work.
- Approvals—Think about the criteria for completing the project in a satisfactory manner. What approvals will the client have in place? What is the nature of client comments and requests for changes? What is an appropriate revision period?
- Payment Structure—Horowitz describes various payment structures: payment in regular stages at lower amounts; payment in larger chunks such as half up-front, half at completion; and payment in numerous smaller amounts if you think the client is apprehensive about cash flow. Here’s what I’ve learned: regular, timed payments (monthly, for example) aligned with how the project progresses tends to reinforce the best behaviors and stabilize cash flow. If a client hires you for a complex or unwieldy project that is riskier to complete (for example, ghost writing a celebrity athlete or a chef’s book where the individual may have many competing demands), larger, less frequent payments may be preferable. Finally, as the authors write, “your contract should specify when payment is due and what happens if it’s late.”
- Expenses—If you anticipate significant expenses, spell out whether you will be reimbursed or if expenses are built into the project fee.
- Non-compete Language—The client may ask you to provide assurances about working with competitors. My advice: Talk it out beforehand.
- Terms and Renewal—Depending on the nature of the work, you or the client may want to include language that addresses renewing the contract for continued business. Include provisions for increases in pay, inflation adjustments, and the need to mutually agree on deal points, and “nix language that automatically renews the contract unless you terminate in a certain time frame.” Always remember to protect yourself!
- Force Majeure—Consider whether to include language that says the parties won’t be liable if an event beyond their control, such as a natural disaster or calamity, occurs. This may seem a remote possibility, but in 2012, I had several projects moderately delayed because Hurricane Sandy made it difficult to get any work done for two weeks.
- Termination—Every agreement should include how parties address the early death of the project, due to outside events, or if either party is dissatisfied. Termination language should define the grounds for termination—make it as balanced as possible, lay out a payment scheme, and specify how notice will be given.
According to the Freelancers Union one in three workers are freelancers, which translates to roughly 42 million Americans. The reality is whether an independent worker by choice or not, the onus is on us to be clear of our needs and understand our options; The Freelancer’s Bible is the perfect resource to help achieve these goals.