Part 5

3 Terms every good freelance contract must have

The terms covered in this section are the most likely hang you up as a freelancer. Watch them closely.

Hopefully, by this point, you’ve realized the importance of contracts to protect your creative work.

But what should a simple creative contract include?

Below are a few key terms and conditions you should always pay close attention to in order to get the most out of your contract.

Remember, this is not an exhaustive list of what can or should go in your contract. These 3 suggestions are meant for simple, standard creative-work contracts. If you plan to invest a lot of time, money, and effort in a substantially larger project, you may want to consult professional legal help.

1. Work-for-hire

When you’re working on a freelance basis for your clients, it’s important to understand the difference between being an “independent contractor” (or a freelancer) and signing on as “work-for-hire.”

From what we learned earlier in this guide, the creator of any original work automatically owns the copyright to their creative work.

Such is the case when you’re hired as a freelancer or independent contractor.

But beware: the tables turn when your client requests you agree to a “work- for-hire” contract. Under U.S. Copyright Law (and copyright law in many countries), creative work that comes out of a “work-for-hire” relationship become property of the client, not of the creator.

If your client requests you change “independent contractor” to “work-for- hire” in your contract, make sure you know what you're getting into.

You’ll be sacrificing complete ownership of your creative work, which makes it impossible to use anywhere else.

It’s important to note that contrary to popular belief in the creative community, all nations and governments that abide by the Berne Convention regard copyright and moral right differently.

While you may not own the official copyright to use your creative work in a commercial way, you do have the moral right to identify yourself as the creator of your work.

That means, under the Berne Convention, you’re legally allowed to display any of your creative work (regardless of who holds official copyright) in a portfolio.

You’re legally allowed to display any of your creative work in a portfolio—even if you don't own the copyright.

In order to claim ownership through “work-for-hire” your client must explicitly include it in the original contract.

If the parties don’t agree on a work-for-hire relationship, the creative professional retains copyright to their work.

Preliminary Work vs. Final Work

If you do decide to enter into an agreement with your client where they end up owning your creative work once you’re completed, then you’ll want to make sure they only own the final work you deliver to them.


What if you’re a web designer and you create a really fantastic navigation menu, but they choose to go another route? If you’ve signed on as “work- for-hire” and haven’t included a clause defining the difference in ownership for preliminary work as well as final work, that means your client now owns your navigation menu.

Even though they never used it, you made it during the time you worked for them.

And if you’re not careful, they’ll own it all.

In a work-for-hire situation, specify who owns the work you do that doesn't get used. It should be you.

Then when another client comes along and wants a fantastic navigation menu, you’ve got to start from scratch.

The same goes for elements of logos, custom typography work, illustrations, portions of written work, and more!

Protect yourself and your work by including a phrase in your contract outlining that, even in a “work-for-hire” situation, your client only owns the final work you deliver.

Third-party Content

The following section is more relevant to designers than any other group of creative professionals. If you’re a writer, an artist, or some other creative professional, you may want to consider lightly skimming through this section to see if it applies to you.

Many times, when it comes to creating a web site, brochure, or other project that involves lots of graphical elements, many designers choose to include third party content.

Third party content can mean anything from stock photos to purchased code snippets and more.

It’s important that you remember two things when including third-party content in your creative work: first, use your contract to define who pays for third party content, and second, disclose who owns the third party content and what usage rights they have after the project is completed.

First: who pays for third-party content? There are two general camps of thinking on this issue.

Either the creative professional pays for the content and then gets reimbursed for any costs they incur, or the cost of third-party content is automatically factored into the cost of the project and is paid by the client when the project is paid in full.

Both have their advantages and disadvantages, so you’ll want to give it a try and see which works best for you.

A word of warning for anyone considering getting reimbursed: make sure the contract clearly states that the cost of third party content goes above and beyond the cost and scope of the original price quote.

There's much more

Keep in mind: while these three terms are extremely important, they're only the beginning in what you should include in your contract. For more info, see the final section in this guide (complete with contract examples) and consult a legal professional in your area.

   One key exception
Who owns what?