January 18, 2020

A guide to who prepares freelancer & MSA contracts & what's covered

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A guide to who prepares freelancer contracts & what's covered

27 January 2021

As a freelancer, you’ll likely work with a mix of businesses - some small and some large.

So, who prepares the contract terms? You ? or the business your'e working with?

Here’s a guide. 

Master Service Agreement (MSA)

If you are working with a larger business, you’ll likely receive a contract from that business outlining the work you’ll complete, sometimes its called a master service agreement (MSA). 

This agreement covers the products and services you will be delivering. 

If you receive an MSA, it's a good idea to have it reviewed by a business lawyer. 

Below is what's usually covered: 

  • project start/end date 
  • product/service description 
  • fees
  • supplier code of conduct (if any) 
  • fees , expenses and payment
  • jurisdiction - the law that will apply e.g. NSW, Switzerland etc
  • record keeping & audit rights
  • transfer of IP rights
  • insurance
  • Indemnity 
  • liability limitation 
  • termination & consequences
  • confidentiality 

As a small business you'll want to pay special attention to payment terms as sometimes these can be quite long and onerous on small business cash flow. 

Ideally, you'll want payment terms that are 30 days or less wherever possible. 

Small and medium businesses

Small and even medium sized businesses may be happy to accept your freelancer contract terms (i.e. if you have already had them drafted beforehand).  

So what goes into your freelancer contract terms? Below is an idea of typical terms. 

Freelancer contract terms

Below are the typical key items in a freelancer contract:

  • product/service description 
  • term of contract
  • client responsibilities
  • fees & payment terms
  • expense reimbursement
  • late fees
  • intellectual property
  • warranties
  • indemnity for third party claims - for protection from client’s breach of a third parties IP rights
  • liability limitations
  • dispute resolution 
  • termination & termination consequences
  • confidential information 
  • marketing & promotions - ability to promote your work to add to your client portfolio 
  • relationship clause - clarify its not an employee/employer relationship 
  • subcontracting - ability to subcontract (if this will occur). 

Freelancer contract terms

Do you need to have your own contract terms prepared?

Ideally yes, because that way you can be prepared for situations where another party does not have contract terms ready and you can set your work terms clearly. 

I have worked with clients that have used their own terms in some instances and when working with larger clients, have used the larger businesses' terms. 

And, if you are going to use terms prepared by the other party, it's always a good idea to have them reviewed by a lawyer as well to make sure they are fair. 

How to display your freelancer contract terms 

How should you display your contract terms?

You may attach the terms to your invoice and make reference to them in the invoice for example, on top of the invoice you can write ‘by paying this invoice you agree to our terms over page.'  

Do you have questions or comments about freelancer contract terms? Be sure to leave them below. 

About the author 

Vivian Michael

As founder and lawyer at Michael Law Group, Vivian advises Australia's top entrepreneurs on business and employment matters. Clients benefit from Vivian's commercially focussed and pragmatic legal advice, business experience, and commitment to deliver the best quality business legal services to her clients.

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