Getting your primary contracts set up
Once you have decided on your business structure, have trademarked your logo, it's time to think about your contracts., It is very important that you always have valid and enforceable contracts with all your clients. You may think it’s a waste of time to draw up a lengthy document for a project that’s going to last just a few days. However, running a business without contracts can only guarantee you frustrations and misunderstandings. You already face many challenges as a freelancer, you don’t need any more avoidable challenges.
It may seem like a daunting task that you want no part of, but for your business to run well, you cannot afford to operate without contracts. Contracts are of great value and can protect you and your client in cases of unforeseeable circumstances.
You may have worked with oral agreements before and it may have worked but it leaves so many blurred lines and can create expensive misunderstandings. For example, imagine you forget to discuss who will pay for your transport costs when you travel to shoot a client’s wedding and the client insists that you did not agree that they would pay and you are left with a hefty transport bill to pay.
A contract sets out the relationship between you and your customer, helps you cover the bases in case a problem arises, and more importantly, ensures that everyone is on the same page in terms of expectations for project scope, deliverables, payment, timeline, etc. You need a solid contract whenever you’re doing business with a client, no matter how small the job may be.
Here are some of the contracts you need to have in place
Service Level Agreement
A Service Level Agreement sets out the deliverables that you have agreed to provide to your client as well as the deliverables for the client.
You would need an SLA if you are rendering services to a client and you would like to outline the expectations of both you and your client. For example, a photographer who has been hired to shoot a client’s event, a social media influencer who has been asked to promote a brand or a developer creating software or applications.
A good Service Level Agreement will ensure that you and your client are clear in terms of expectations and will help with ensuring that your clients stay up to date with payments.
Independent Contractor Agreement
An Independent contractor is a person/ business who is contracted to perform work or provide services to another for compensation. Independent contractors do not work regularly for an employer but rather as and when they are required. You will be considered an Independent Contractor if you have a somewhat continuous relationship with your client, but you only do work for them as and when required, for example, if you’re a blog writer.
An Independent Contractor Agreement provides for the terms of working between you and your client. This contract gives you the necessary freedom to work on different projects simultaneously as opposed to the traditional employment agreement, freedom which you may require especially when you’re starting out.
It is important that you have a good idea of the terms that you would like in the contract and you may want to consider having a personal Independent Contractor Agreement template that you adjust and customise for each client. Remember- contracts are not ‘one size fits all’.
What the difference between a Service Level Agreement and Independent Contractor Agreement?
An SLA is mainly about performance measuring and outlines the deliverables between you and your client. An SLA is required for projects and does not create any kind labour relationship whereas, an Independent Contractor Agreement creates a relationship that is similar to that of an employment relationship. As a freelancer you would decide to use an SLA for once off projects, whereas you would opt for an Independent Contractor Agreement when the work that you will be doing is continuous but required on an ad hoc basis.
Termination of Independent Contractor Agreement
It is natural that you may want to terminate your Independent Contractor Agreement for one reason or another.
Your Independent Contractor Agreement will most likely have a clause in it which allows for the termination of the Agreement for any reason or no reason at all.
A Termination of Independent Contractor Agreement basically serves as a written notice to terminate the Independent Contractor Agreement and frees you from the contract.
Letter of Demand for Unpaid Invoices
Unfortunately, in business there will always be some clients who do not pay on time. In any business and even more so when you are a freelancer, you need all your invoices paid. A demand letter is an important first-step in a proceeding for debt recovery before legal action. A demand letter, or overdue payment letter, states how much is owed, what for and when the invoice needs to be paid. It may also include a warning that you will consider legal action if the debt is not paid by a certain date.
A letter of demand for money owed to you is an important step to attempt to resolve your debt recovery matter without investing your limited time and expense into commercial litigation or alternative dispute resolution.
Acknowledgment of Debt
If you’ve gotten to this stage where your clients/ customers have still not paid you after several attempts to get them to pay up, you can ask them to sign an Acknowledgment of Debt.
An acknowledgement of debt is a document which contains an explicit admission of liability by the debtor. In the Acknowledgment of Debt, the debtor acknowledges that they owe a particular sum of money to you and undertakes to repay what is owing. It is legally valid and binding on the debtor.
This is important for you to ensure that you recover all your debts. Every cent counts!
A non-disclosure agreement (NDA) is a contract between you and your client that outlines confidential material, knowledge, or information that you and your clients wish to share with one another for certain purposes but wish to restrict access to.
In this agreement you and your client agree not to disclose information covered by the agreement. The NDA creates a confidential relationship between you and the other party, typically to protect any type of confidential and/or proprietary information or trade secrets. The NDA protects non-public business information.
If you are considering doing business and need to understand the processes used in your and or the other party’s business for the purpose of evaluating the potential business relationship you may enter into an NDA before even starting business with your client or customer.
Once you’ve entered an NDA, you may share sensitive information without fear that it will end up in the hands of your competitors and if it does, you will have a right to recourse.
As a freelancer, your position in business may be weaker than that of other businesses that are bigger and more established and thus, is it important that your confidential information is protected to avoid putting yourself at a competitive disadvantage.
If you find yourself in a situation where the information you have to share with your client is confidential and the disclosure of that information would cripple you and your business, then you should consider entering a One-Sided NDA. If your client will also be sharing confidential information, then a Mutual NDA is advisable. However, if you feel like it is not necessary for you to enter an NDA with your clients, your information will still be protected because most agreements still include a confidentiality clause for your protection.
Copyright Assignment Agreement
A copyright is a collection of rights that vest in someone who creates original work. Copyright may subsist over work such as literary works, blog articles, code, movies or software. A copyright allows you the right to reproduce the work, to distribute copies, to prepare derivative works and to perform and display the work publicly.
As a copyright owner, you can transfer or assign your rights to your clients. Copyright assignment allows your client to take ownership of the copyright. In order for the assignment to be valid, by law, it needs to be reduced to writing in what is known as a Copyright Assignment Agreement.
In addition to outlining how you will use the information, the policy includes how it will meet its legal obligations, and how those sharing their data can seek recourse should the company fail to meet those responsibilities.
Website Terms and Conditions
Website Terms and Conditions govern the use of a website by visitors, it’s about how the website should be used.
While it is not a requirement by law for you to have Website Terms and Conditions, ensuring that your users understand the limitations of how they can use any website content, including text, images, videos and music, helps to secure your intellectual property.
Providing your website visitors with clear and detailed Terms and Conditions helps the visitors trust you and puts them at ease when using your website.
Equipment Rental Agreement
A Moveable Rental/Lease Agreement is a document that outlines the arrangement between the lessor, someone who lends items and someone else that is willing to pay rent while using the items, known as lessee. It’s a document that allows you to use moveable property for a period of time in exchange for periodic rent.
If you will be leasing any equipment like cameras, musical equipment, furniture etc, then it is important that you have a good Equipment Rental Agreement with your lessor.
It is important to have this agreement in place no matter how small the item you are renting may be. Aim to reduce all your business and dealings to writing to avoid unnecessary and costly problems for your business.
BBBEEE Exemption Affidavit
If you ever want to conduct business with government or state-owned enterprises, it is mandatory for you to have BEEE Affidavit. Even if you won’t be getting into business with the government, any other person or organisation you supply will benefit from you being BEEE compliant.
From 2011 a business cannot conduct business with municipalities, government departments and any state-owned entities without a valid BEEE-rating certificate.
A BEEE-rating certificate is a document that indicates a company's level of BEEE compliance. A level one contributor is the highest achievable status and the lowest level of BEEE compliance is level eight. The higher the BEEE status level, the stronger the business is in relation to its competition.
The certificate is valid for a year and renewed annually based on evidence submitted for BEEE implementation during the period under measurement.
Fortunately for you, Hello Contract can help ensure that you have all the contracts you need.
It’s as simple as this; When you start the questionnaire, you will be guided through the questions with the help of information and explanation. Based on your answers, the contracts will be tailor-made by our system. If you log in or create an account, you can also save the progress of the questionnaire and come back later.