Contract non-negotiables for independent consultants

When I made the leap and decided to go independent, my first clients were people who were already in my extended network. Because there was already an initial layer of trust between us, I didn’t understand at the time the importance of having a rock solid contract in place, particularly for independent consultants like me. Let’s just say that I ended up learning the hard way that leaving out the right clauses leads to confusion, scope creep, and payment delays, no matter how well you and the client already know each other. I began to understand that a contract isn’t there just to ensure that everyone follows up on their initial promises, but that it exists to clarify all the key terms beyond a doubt, and make sure — upfront — that everyone’s aligned on what’s expected. 

But my client has a standard contract they give to every independent worker, you might think. I don’t need to know all this! The fact is, even if you’re not creating your own contract, you need to fully understand the terms and how they apply to you. Additionally, you should determine if there’s any wiggle room to negotiate points to better suit your situation.

If this seems overwhelming, I’ve put together a list of what I consider the most important terms to look out for. These are the non-negotiables that every independent professional, no matter where they are, should know about their contract.

Scope of Work (SOW) – Avoid the scope creep trap

Be as detailed as you can with the deliverables and the expected tasks leading up to their completion. Verbal agreements or vague conversations won’t suffice. Expectations on scope also include any time spent training. Though unlikely, the client may train you on specific processes or tools needed for your project. Ensure the contract captures the time spent on these activities.

Though I usually capture my deliverable details correctly in the contract, unexpected meetings often lead to scope creep for me. Clients sometimes abruptly ask for check-ins, brainstorming sessions, or invite you to meetings on tangential topics to share your expertise with the team. One of my clients set up spontaneous meetings that could run between fifteen minutes to two hours. We ultimately adjusted the contract’s payment plan to account for varying meeting lengths and actual work completed.

Without a detailed SOW, you may end up working on unplanned tasks, stretching your time and energy thin. When the contract is airtight, you can simply point to it as the reason why you can’t take on out-of-scope tasks. Since everything is already captured on paper, there’s no need for a long discussion. If the client requests longer or different projects, schedule a discussion about the possibility of a contract extension.

Payment terms – Because you deserve to get paid on time

Getting paid on time isn’t just a ‘nice to have’ — it’s your right. Make sure your contract clearly outlines when and how you get paid. Depending on the region that you’re working in, there might be some standard practices that apply across the board in terms of payment. For example, your first payment might not arrive until 45 days have passed, a duration that drops down to 30 days for the following cycles. Some clients might pay on an employee-like schedule, while others might offer flexibility based on milestones and deliverables.

"I personally add a ‘late fee’ to my contracts, which increases as a percentage of the payment the longer the payment gets delay lasts. This really helps hold clients accountable to pay on time."

Set clear expectations and simplify the payment process, especially when working across regions.

Learn more about how you can maximise your freelance income with the help of effective pricing

Intellectual Property (IP) rights – Who owns what?

There are two main points to consider when you’re determining what happens to the intellectual property you create for the client. The first consideration is whether the completed project can help you reach new potential clients. The second is whether the NDA prevents you from discussing it, even in general terms. The second issue to look at is whether you’re comfortable with the client’s right to use, modify, or even resell your work as their own IP. 

Confidentiality – Trust is good, a contract is better

While you’re working as an independent professional, you’ll likely be handling sensitive information. Get clear with your client what’s confidential. Are you able to discuss the project with others if you steer clear of the details? Some clients might not even want you to mention that you’re working for them at all. Maybe certain details will be okay to discuss after a certain time has passed. I’ve negotiated agreements with a couple of clients that allow me to share project details privately. Potential clients often request this information to determine if we’d be a good fit.

The client may present their standard NDA for you to sign, but remember, you might have room to negotiate terms specific to your work and deliverables.

Termination clause – Know when to walk away

Sometimes, things go awry. It’s important to have an exit strategy in place, for both parties. A good termination clause enables you to walk away from an unworkable situation without burning bridges. It also ensures payment for the work you have already completed. Like payment cycles, notice periods and termination clauses may differ regionally. A 30-day notice period is common, though sometimes one party or another can push to cut that time in half. 

Limitation of liability – Protect yourself

As consultants, we often assume responsibility for the outcomes of our work, but you need to protect yourself from liabilities outside your control. By having a strong limitation of liability clause in place, you can limit your financial exposure if something goes wrong. Nothing is more terrible than an unexpected event forcing you to pay all your earnings—or more—in damages.

Governing law – Settle disputes on your terms

Speaking of things going wrong, which laws determine where and how to settle the matter? Every contract needs to mention a governing jurisdiction in case a legal dispute arises. If you’re in the same region as the client, then the details of this clause can be pretty straightforward. But if you’re working across borders, the client will likely want to settle in their jurisdiction. Research or consult a lawyer about jurisdictional differences to ensure you’re comfortable with the terms.

A good contract is your safety net

Whether you’re just starting out or a seasoned independent professional, take the time to check that your contract includes all the non-negotiables mentioned above. It will protect your work, ensure fair payment, and save you (and your client) a ton of stress.

Tune into our community conversation to get direct insights from fellow independents about their contract non-negotiables.

If you’re still shaky on whether you’re protecting yourself properly and fairly, don’t hesitate out legal guidance to create a contract that’s airtight, clear, and comprehensive. Only then will you be ready to get to work.