Are you a freelancer looking to protect your interests and streamline your working relationships with clients? Or on the other hand, is your company in need of specialised expertise or short-term support? Hiring a freelancer can be a great solution to secure certain skills or knowledge when a business needs it most, but it's important to ensure that your working relationship is well-defined and legally binding. That's where Docue's fully-customisable freelance contract template comes in.
What is a freelance contract?
A freelance contract, also known as a freelancer agreement or freelance services agreement, is a legally binding document that outlines the terms and conditions of a working relationship between a freelancer and a client or company. It typically covers important aspects of the project or services, such as the scope of work and/or deliverables, payment terms, ownership of intellectual property, confidentiality and termination procedures.
Not an employee: This freelance contract template is to be used where a company will be engaging a freelancer to carry out work for the business, but will not be employing them. The term 'Freelancer' is a general term to describe such a person, but you may call them a ‘Sub-contractor’, ‘Contractor’, 'Consultant’ or 'Adviser' depending on what they're doing for the business. This template contains customisable party names to ensure your freelance contract reflects the language that suits your situation best.
When would you use this freelance contract template?
You would use this agreement when you need someone to carry out work for your business, but you don't want to employ someone. That individual would be an independent freelancer and free to work with whoever they want, whenever they want and would generally be able to decide where and how they provide their services to you.
What are the key benefits of Docue's freelance contract template?
Efficiently transfer IP rights: Works that are created by employees in the course of their employment will generally automatically belong to the business. However, intellectual property rights in deliverables created by freelancers do not automatically belong to the company commissioning the work. The IP rights must be assigned from the freelancer to the company. This freelance contract template transfers the ownership of the intellectual property rights in the work or deliverables created by the freelancer to the company.
Helps to avoid disputes: A well-drafted freelance services contract can help reduce the risk of disputes between a company and freelancer by clearly outlining the scope of the works to be created, any deliverables, timelines, obligations and expectations of both parties. This can help to prevent disagreements or miscommunications later down the line.
Dynamic clauses: This freelance contract template includes optional clauses so the freelance contract template can be tailored to your specific needs and preferences. You can easily add or remove sections, adjust the language to fit your style, and include any additional terms or clauses that you feel are necessary. Every freelance services engagement is unique, and Docue’s dynamic freelance contract template gives you the ability to create a legal agreement that reflects yours.
What are the key terms that a freelance contract should include?
Key terms: Docue’s freelance contract template contains the following key provisions:
- Scope of the services and deliverables (if applicable);
- Appointment of a substitute;
- Exclusivity and conflicts;
- Payment terms;
- Expenses;
- Tax and national insurance;
- Intellectual property;
- Confidentiality;
- Data protection;
- Liability and insurance;
- Termination and post-termination procedures; and
- Governing law and jurisdiction.
What is IR35 and how does it affect freelancers?
IR35 is a tax law in the UK that aims to stop workers (i.e. freelancers, consultants or contractors) from using a limited company (known as a personal service company or PSC) or other intermediary who are effectively employees, to disguise their employment status and reduce the amount of tax they pay on their income. If a freelancer is genuinely a self-employed business, they are considered to be “outside of IR35” which means that the usual income tax and national insurance contributions will not apply in the same way they would in an employer/employee relationship. For this reason, the parties to a freelance contract are often keen to ensure the freelancer's status falls outside of IR35.
For more information about IR35, check out these Government's guidance. answered by our legal experts.
What factors can indicate if a worker is outside of IR35?
There are several factors that determine whether a worker falls outside of the off-payroll working rules or not. However, there are three key employment tests that are considered to be strong indicators of a worker’s genuine “outside IR35” status:
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Control: A customer shouldn’t have direct control over the way that the freelancer provides its services. If the contractor has autonomy over how they carry out the work according to their own schedule, they are more likely to be outside IR35.
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The right of substitution: If the freelancer has the right to substitute themself with another freelancer to provide the services, and they can be substituted in practice, this can be helpful in determining that a freelancer is an independent PSC rather than an employee.
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Lack of mutuality of obligation: “Mutuality of obligation” exists in a conventional employment relationship where there’s an obligation on both the employer and the employee to provide and accept work. This isn’t the case with a freelancer that’s genuinely self-employed. As the freelancer is just paid to deliver a specific piece of work - there's no obligation for the customer to give the freelancer any more work and therefore, no mutuality of obligation.
This freelance contract template includes optional clauses that can be selected to suit the circumstances of the freelancer/customer relationship (i.e. if the freelancer will have the ability to appoint a substitute and take on other clients, etc.). However, please note these factors are not the only factors considered when assessing a freelancer's IR35 status, and the determination must be made on a case-by-case basis, taking into account all relevant factors. For more guidance about IR35, check out the government website.
When should this freelance contract template not be used?
As this freelance services contract template is designed specifically for engagements between freelancers and customers for freelance services, if the service supplier will be providing a broader range of services, then a services agreement may be more suitable.
What other agreements may come in handy for freelance services?
If you will be sharing confidential information when discussing a potential consultancy engagement, either as the freelancer or as a company seeking expertise, then a non disclosure agreement should be signed to ensure each party's confidential information is kept a secret. Once the freelancer agreement has been entered into, the NDA will come to an end and the freelance contract will contain confidentiality provisions to keep your confidential information, well, confidential!
Why use Docue?
Up-to-date with English laws: This freelance contract template was designed and is continuously updated by qualified lawyers. Docue’s cutting-edge technology combined with our lawyer-made content allows you to create, customise, e-sign, store and manage your contracts all in one place.
Easy to use with favourable terms: The freelance contract template includes clause-by-clause guidance to help you through the drafting process. You’ll have a comprehensive, tailored, and ready-to-use freelance services agreement in no time. Once you have selected which party you are, the terms are automatically drafted in favour of the party that you are acting as (i.e. the customer or the freelancer).
Predictable pricing: Our pricing is clear and cost-effective, we don’t believe in hidden costs buried in the fine print.
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