Freelance Contract Essentials Guide

The clauses to cover
Worked example: a payment schedule with a change order

A freelance contract is a written agreement between you and a client that sets out what you'll deliver, what it costs, when you'll be paid, who owns the finished work, how changes are handled and how either side can end the work. Put these points in writing before you start, so there's one document for both sides to check if questions come up later. Whether a particular clause can be enforced depends on the law where you and your client are, so ask a lawyer before relying on one.

Billed publishes this page. The US rules quoted below come from the IRS pages Independent contractor (self-employed) or employee? and Independent contractor defined, and from the U.S. Copyright Office's Circular 30, Works Made for Hire (revised August 2024), all opened on October 29, 2026. This is general information, not legal or tax advice.

The clauses to cover

Parties

The legal names and addresses of both sides, and who the contact person is for each. If you work under a business name, give your legal name and that name, for example Jane Smith, doing business as Smith Design.

Scope of work

List each deliverable, what's included (such as meetings or rounds of review) and what isn't. Describe each item in specific terms rather than a general description like design a website, so both sides can check the work against it. See how to handle scope creep.

Timeline and client inputs

The start date, milestone dates and final delivery date, plus the dates by which the client provides content, feedback or approvals. State what happens to your dates if the client's inputs arrive late.

Price and payment terms

The fee or rate, the payment schedule (deposit, milestones, final payment), the due date of each invoice and the payment methods you accept. Keep the due dates in the contract the same as the ones on your invoices. Whether you can charge interest or a fee on late payments, and how much, depends on the law that applies to you and your client, so ask a lawyer before adding one.

Revisions and change requests

The number of revision rounds included, what counts as one round, and how work outside the agreed scope is quoted and approved, such as a written change order with its own price.

Ownership of the work

Say who owns the finished work and when, and whether you can show it in your portfolio. US copyright law has a specific rule here.

The Copyright Office explains that when a work is a work made for hire, "the author is not the individual who actually created the work. Instead, the party that hired the individual is considered both the author and the copyright owner of the work." For freelancers, the relevant route is a work "specially ordered or commissioned". Circular 30 lists nine categories that qualify, for example translations and instructional texts, and only "if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire." It adds: "If a work fails to satisfy any of these requirements, it is not a work made for hire."

So a "work made for hire" label in a contract doesn't settle ownership for every kind of work. If your work falls outside those categories, how ownership passes to the client depends on what the contract says about transferring or licensing rights. Ask a lawyer how to word this for your work.

Confidentiality

What information each side must keep private, what isn't covered (such as information that's already public) and for how long.

Ending the work

How either side can end the agreement and with how much notice, what the client pays for work done up to that point, and any cancellation fee.

Liability

Some contracts limit how much either side can claim, or exclude certain kinds of loss. Whether such limits hold depends on the applicable law and the facts, so ask a lawyer.

Disputes and governing law

How disagreements are handled (for example, talking first, then mediation), and which state's or country's law governs the contract.

Your status as an independent contractor

A clause saying you're an independent contractor records what both sides intend, but it doesn't decide your status for US tax purposes. The IRS says that "all information that provides evidence of the degree of control and independence must be considered", grouped into three categories:

"Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?"
"Financial: Are the business aspects of the worker's job controlled by the payer?"
"Type of relationship: Are there written contracts or employee type benefits (that is, pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?"

On the IRS's independent contractor page: "What matters is that the employer has the legal right to control the details of how the services are performed." A written contract is one of the facts considered, not the deciding one.

Worked example: a payment schedule with a change order

The business and figures here are a sample, invented for this example.

A freelance designer agrees to a $6,000 website project. The contract sets this schedule, each invoice due 15 days after it's sent:

Deposit before work starts: 40% of $6,000 = $2,400.
On approval of the design: 30% of $6,000 = $1,800.
On delivery: 30% of $6,000 = $1,800.
Check: $2,400 + $1,800 + $1,800 = $6,000.

The contract includes two rounds of revisions and prices extra work at $100 an hour by written change order. The client then requests another round, which you estimate at 3 hours:

Change order: 3 × $100 = $300, invoiced separately.
Total if the project finishes: $6,000 + $300 = $6,300.

The contract also says that if the client cancels after approving the design, it pays for work invoiced so far plus a cancellation fee of 25% of the unpaid project balance:

Paid by then: $2,400 + $1,800 = $4,200.
Unpaid balance: $6,000 − $4,200 = $1,800.
Cancellation fee: 25% of $1,800 = $450.
Total the client pays if it cancels at that point: $4,200 + $450 = $4,650.

Write the amounts and triggers down like this, so both sides can check each invoice against the contract. Whether a cancellation fee like this can be collected depends on the applicable law, so ask a lawyer.

Using the contract day to day

Send it before work starts, and start once both sides have signed.
Keep it next to your invoices, so each invoice matches the agreed amounts and dates.
Put changes in writing, with the price, before doing the extra work.
Reuse your structure, but update the scope, price and dates for each client.

Where Billed fits

Billed publishes this page. Its invoice software page says you can "Set a due date on each invoice so your client knows when to pay" and that "Invoice reports show which invoices are paid, partially paid or past due, and you can see who owes you money and send them a payment reminder." Its estimating software page describes "converting approved estimates into invoices with just a few clicks." For hourly work, see Billed's time tracking and expense tracking pages. The contract itself is something you prepare yourself or with a lawyer. See pricing for plans.

When this guide isn't for you

This page gives general information for solo freelancers in the US. If you hire staff, work through an agency, work across borders, or are negotiating terms with significant risk, ask a lawyer.

Frequently Asked Questions

What should a freelance contract include?

The parties, the scope of work, the timeline and client inputs, the price and payment terms, revisions and change requests, ownership of the work, confidentiality, how either side can end the work, any limits on liability, and how disputes are handled. Ask a lawyer about the clauses that matter for your work.

Does a contract make me an independent contractor?

Not by itself. For US tax purposes, the IRS looks at all the facts about control and independence, in three categories: behavioral, financial and the type of relationship. A written contract is one of those facts.

Who owns the work I create for a client?

It depends on the work and the contract. The U.S. Copyright Office explains that commissioned work counts as a work made for hire only when it fits one of the nine categories the Office lists and both sides have signed a written agreement saying so. Otherwise ownership depends on what the contract says about transferring or licensing rights, so ask a lawyer.

Are late fees and liability limits enforceable?

That depends on the law that applies to you and your client, and on the facts. Ask a lawyer before relying on a late fee, cancellation fee or liability limit.

Do I need a contract for a small project?

Even for a small project, you can put the scope, price, payment dates and ownership on a single page, so both sides have the same written terms.

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Freelance Contract Essentials: Clauses Every Freelancer Should Cover