One of the toughest things about being a freelancer is protecting yourself from your clients. You are just an individual, while your clients can often be savvy business owners or larger organizations. We’ve all had disputes with clients large and small. They can often be soul-sucking, he-said-she-said arguments that can lead to all sorts of issues — from financial to mental.

The best way to protect yourself from these types of disputes is to start the project off by writing a solid statement of work and having the client agree to it and sign it before you begin. A freelance contract is an excellent way to solve disputes or miscommunications during the project and it can also be used as a legal document if legal action is necessary.

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What is a Statement of Work and how is it different from a Service Agreement?

A Statement of Work is a written contract between you and your client that defines the specific project work you will be doing for them in detail. It’s not to be confused with a Service Agreement, which is used to define more general terms on how two parties intend to work together over a longer period of time.

Sometimes these documents are combined for the very first project, while in other scenarios they are separate and Statement of Work contracts are written for each individual project under the Service Agreement.

Generally, unless you have a longterm relationship with the client, you don’t need a Service Agreement. Just concentrate on the Statement of Work for each project. A Service Agreement is often written by larger clients and you are asked to sign it; conversely, it’s your responsibility as the freelancer to write your Statement of Work and have the client sign it.

A Statement of Work outlines:

  • Clear expectations of what you will be doing for the client — which activities you will be performing and the items you will be delivering to them.
  • What you won’t be doing, which is often important to specify at the beginning to avoid any confusion later.
  • What the client must do. We often can’t do our work unless the client does some things as well; it’s always great to document their duties in the contract.
  • When you will be doing the work. This is more to protect the client than you and it can be omitted if the client doesn’t insist on it.
  • Expenses and change order terms. This documents the expenses the client will need to pay for and under what circumstances you can ask for more money to cover additional work the client requests.
  • Payment terms: exactly and under what circumstances the client must pay you for the work.

How to write an effective freelance contract

At our curated freelance network LocalSolo.com, these are the sections that we typically see freelancers and agencies put in statements of work:

Services:

Start with a summary of the project. Who the client is and what are they generally asking you to do. This can be relatively brief. An example is:

“Acme Corp has asked Julie Consulting to plan, design and develop a new responsive website for their company. This website will be located on their main domain URL of acme.com. The site will have a new organization, a new design and will be implemented on a content management system called WordPress.”

Project scope:

A freelance contract should be a comprehensive list of activities and deliverables for the entire project. It can be as long as you need it to be. Some examples of scope items are:

“Julie Consulting will create a new sitemap for the project. This sitemap will have 3 client requested revisions to get to a final approved version”

“Julie Consulting will create 6 full color graphic design templates for the new site. Each design will come with 2 client requested revisions to get to final approved versions”

“The client may request up to 3 in-person meetings during the project.”

“The new website will have full e-commerce capability. This will be accomplished through the WordPress Plugin Super ECommerce, which will be installed by Julie Consulting. All functionality for e-commerce will depend on the functionality of the installed plugin. Authorize.net will be the client’s payment provider. Julie Consulting will connect the client’s Authorize.net account to the Super ECommerce Plugin.

Project assumptions:

These are important as they detail any assumptions that need to be specified about the project — what is not included, what third parties need to do and what the client needs to do. Some examples of assumptions are:

“The client will be available during the project and will review all deliverables and provide feedback within 3 working days of delivery.”

“The client will provide all written content for the new website for implementation. This content will be delivered by January 23, 2017.”

“Super ECommerce is responsible for all issues and bugs in their product. They have agreed to provide email and phone technical support to Julie Consulting as needed.”

“The site will be built to function on the latest versions of the following exact platform and browser combinations: the latest versions of Internet Explorer, Chrome, Firefox and Safari on the latest versions of Mac OS and Windows and the latest versions of Safari and Chrome on the latest versions of IOS and Android. Any bugs reported on earlier browsers may require a change order to fix.”

“Either party may terminate this agreement with 2 weeks’ written notice. If the client terminates this agreement, they must pay in full for all portions of the project that have been delivered to date.”

Schedule and terms

This sets expectations regarding when the project begins and when it is projected for completion. It can also set terms for how the agreement can be terminated by both parties. An example is:

“Work will commence on this project on the contract signing date and is estimated to be completed XX days/weeks/months after the project commencement date. This SOW shall remain in effect until all deliverables under this SOW are provided to the CLIENT, or until this SOW is terminated with written 2 weeks’ notice by either party.”

Change orders

It’s always a good idea to set expectations upfront for how client-requested changes to the project will affect the budget and schedule. An example is:

“Any requested change to the scope of this contract will be evaluated for viability, cost and schedule impact. The cost and schedule impact will be presented to the client for review and approval before commencing. Applicable charges will apply.”

Expenses

Line item out any expenses that are part of the project that either the client needs to pay for directly, or that you will pay for upfront and invoice the client for later. Be specific.

Payment terms

Payment terms are super important as they dictate when you will get paid for the work that you do.

There are many different ways to set up payments terms. Typically if it’s a big company and you are on long term contract, they will pay “net 30,” which means you invoice them after set deliverables and they will pay you 30 days later at the latest.

It’s possible to ask for a retainer before you begin, and it’s always a good idea if the client is small or medium size. If it’s a large company, you could ask for a retainer; but they will probably still pay you 30 days after you send them the invoice, so you may have to just start work on faith with them.

Here are some common payment terms you can work into your freelance contract to suit your needs:

A 50% project retainer is due before work commences

A 50% project retainer is invoiced on SOW signature

The third 25% payment is due on delivery of the following project deliverable: [STATE DELIVERABLE]

The final 25% payment is due once the project beta is sent to the client for review

The final 25% payment is due once the project is complete (The website has launched live)

The final 25% payment is due once the project is complete. Final project code and root files will be delivered to the client once payment has been received

Signatures

This is just the simple area where the client can sign. It should contain both of your names and addresses. It’s also a good idea to have a small initials area on every page of the freelance contract.

Freelance contract templates:

Here is a simple Freelance Statement of Work Template from our curated freelance network LocalSolo.com. Feel free to copy this and use it however you like.

SuperFriendly Service Agreement / Statement of Work

SuperFriendly has a great combination Service Agreement/Statement of Work template that they have open-sourced to the freelance community. It comes in Keynote, HTML and Microsoft Word versions.

I hope that you found this article informative and useful! Remember to always protect yourself and your clients with a great statement of work. It will serve you well.

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Mark Fromson

Mark Fromson

Guest Author

Mark Fromson has freelanced for 14 digital agencies and hundreds of clients as a digital project manager and user experience architect. He is now the co-founder and CEO of LocalSolo.com, a curated network of 25,000 top local freelance professionals in major market cities around the world.