7 Reasons You Should Have a Contract for Freelancer Gigs

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Gigs remain a great way to make extra cash. Some people work side hustles to save for down payments on homes, to purchase a new car, or to accrue fun money.

Other individuals have turned gigs into successful freelancing careers. Once you become a full-time freelancer, shift your mindset and start thinking like an entrepreneur.

When you pass the United States Internal Revenue Service thresholds for taxable income, recordkeeping becomes more important.

Entrepreneurs know that they must put everything in writing including their projects – enter contracts.

For freelancers, contracts protect their time, work, and pay. The written agreement puts both parties on the same page.

It outlines the project scope, timeline, and payment terms.

The following are seven reasons you should have a contract for freelancer gigs.

1. Establishes the Project

Does a gig exist if it’s not in writing?

Gigs started as side jobs. Teens could mow the neighbor’s lawn to make a few dollars. They could also shovel snow out of the driveway for cash.

In 2022, gigs have become far more sophisticated. Thus, they require a contract. The written agreement establishes the project. Once you receive it, the project becomes official.

Freelancers must avoid gray areas. The same is true for small companies, mid-size businesses, and corporations. The larger the business, the more complicated the contracts become.

Contracts help avoid unnecessary disputes. Negotiations should take place before entering into the agreement. Then, all parties will honor the terms.

Bartenders who opt to freelance benefit from having contracts too. Check out these tips.

2. Defines the Project Scope

Before starting work, freelancers must understand the scope of the project. For example, are you:

Writing 1,000 words or 2,500 words?
Graphic designing for a website or website and marketing campaigns?
Interior designing one room or an entire house?

The scope protects the freelancer. Ideally, you’ll find clients that work above board. However, everything is possible. You want to avoid situations where clients request many revisions or extra work and don’t pay for it.

3. Establishes the Timeline

Some clients require a fast turnaround. Others will give freelancers sufficient time to complete the project.

To avoid delivery issues, the contract outlines the timeline. It allows you to ensure that you can satisfy the expected turnaround. In the best-case scenario, you’ll turn in the work with time to spare.

4. Outlines Payment Terms

For freelancers, getting paid is important. Most operate as one-person shops. Therefore, obtaining compensation for all time spent completing projects is a must.

Otherwise, you give away your time with no recourse unless you want to take the client to business court.

A contract protects freelancers by outlining the payment terms.

If you have trouble acquiring clients whom you believe will pay you as promised, consider joining a freelancing platform.

For a fee, these platforms guarantee payment for work completed. Plus, they help freelancers compile financial reports that they need to pay their taxes each quarter and annually.

5. Addresses Legalities

Most work completed by freelancers becomes the property of the company that hires them. Thus, the contract addresses the legalities.

In employee environments, all work completed by them on-site automatically becomes property of the employer. Companies address this in their employee welcome packets.

Even though freelancers have no ownership of the final product, you can request permission to add it to your portfolio. If you make this request and your client agrees to it, ensure that the contract reflects it.

6. Establishes a Record of the Work

Freelancers must establish credibility. Every completed gig becomes proof that you deliver high-quality work, on time. In addition, contracts establish a record of the work.

For freelancers, portfolios become their resumes. Then, the contract backs every portfolio item.

7. Use it as a Reference for Future Work

Keeping good records as a freelancer serves several purposes. First, it ensures that you pay the correct amount of taxes each quarter and annually. Next, you can reference it in the future.

If you have trouble pricing a contract, sift through past ones to calculate your fees. You can also use them as comparative tools when onboarding new ones.

Conclusion

Freelancers take care of every aspect of their business. Contracts establish the validity of projects and ensure that you receive payment for your work. Plus, you can reference past projects when pricing new ones.