The basics of the right freelance contract

Freelancers like those taking advantage of Freelancer Accounting’s (http://www.freelanceraccounting.com) accountancy services work from contract to contract, so as the months and years pass, they will become especially well-versed at spotting the important factors in securing the right one. They say that an oral contract is ‘not worth the paper it is (or isn’t!) written on’, and although that is by no means true in every way, a contract in writing definitely leaves no doubt as to the parties’ joint commercial intentions and visions.

Ensuring that each of their contracts is in writing is therefore rightly the first priority of most savvy clients of contractor accountants. There are two basic parts of a contract – the commercial provisions and the legal background – the former tending to be in the form of a schedule and the latter making up the body of the agreement. The commercial provisions will include information on the parties, dates and the basis on which payment is made, as well as – most importantly – the work that is to be undertaken.

In fixed-priced contracts, there should be clearly set boundaries for the services that are to be provided, so that contractor accountancy clients aren’t at the receiving end of what is known as the ‘evolving spec’, or the ‘just jobs’ – in other words, the tendency for a client to give ‘just one more job’ to do within the contract. After all, you will have probably priced the job on the basis of what you judge to be the time and resources required to do the work and what the customer is willing to pay.

The part that covers the legal background, meanwhile, will include terms that will probably be the same for all of the work that you carry out for that client. Sections may be included in broad relation to ‘how’ each party will fulfil its end of the contract, which for you, could cover such issues as the quality of your work or responsibility for work that is defective. For the client, meanwhile, the likes of detailed payment provisions are likely to be included here. Also included in this section of the contract will be provisions affecting both parties, relating to such areas as termination, confidentiality and IPR.

Across all of these provisions, the client of a PCG accountant should ensure that the contract is understandable. Although you may benefit from a lawyer’s help in the production of the contract, you shouldn’t require one to understand what it says and means. The best contracts will always be clear and unambiguous in what they mean, with any third party reading it being able to understand its terms. After all, the document will be an invaluable point of reference for both parties, particularly in avoiding potential disputes.

The controversial and often confusing IR35 legislation should also not be far from your mind when you are putting together a contract – and the IR35 accountants of Freelancer Accounting (http://www.freelanceraccounting.com) can help to ensure that your contracts support your compliance with the law.

Editor’s Note: Freelancer Accounting (http://www.freelanceraccounting.com) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.