Top 10 practical tips every freelancer must know to legally protect themselves from clients
Author : MyLegalWork Staff
As a freelancer you already know that a lot of effort is involved in making sure that your clients come back to you for your services again and again. You need to make sure nothing gets left behind in delivering your best results, keep on acquiring projects and start working with branded clients. In all this excitement and thrill of growing your profile and reputation, being legally safe is one aspect which usually gets ignored. Well, not anymore with our help.
There are always possibilities of having legal issues with your clients or partners. Most freelancers are not aware of how to avoid legal trouble and what to do if you do end up in a legal soup. That’s why it is important to keep yourself protected from any future legal action.
While accepting any project/ contract, keep in mind these things that a freelancer must check before building a professional relationship with the client:
1) Check the client’s reputation
Find out if the client has a website and take a look at it. While a professional website doesn’t mean that a company is legitimate (anyone can create a website), when combined with other positive factors it is a good sign. Type the client’s name into a search engine to find out what people are saying about them. Also, if you are friends with freelancers who have worked for this client in the past, always ask about their experience with the client. Working with bad clients creates delayed payment issues, bad debts, and a general host of issues which can be avoided with a little bit of a background check.
2) Clarify the client’s requirements
Ask questions until you are sure that you understand exactly what the client wants in as much detail as possible. Remember, it is easier to do a project correctly from the start than it is to correct a project that has taken a wrong turn. Most clients would rather have you ask a few questions, than guess at what they want. A mismatch between client expectations and your deliverables can have you rework the same thing without getting paid extra for re-iterations.
3) Negotiate for realistic deadlines and project expectations
If you feel that a project has unreasonable requirements, you can negotiate your way to better terms before the project begins. Areas that are open to negotiation include: scope of project, the quality of project, module-wise due dates, and payment terms. If you are dissatisfied with what the client proposes in any one of these areas, suggest alternatives to the client for a win-win situation.
4) Keep written communication between you and the client
Before receiving a project, always get a written confirmation from the client. Make sure that you have email communication (as a minimum standard, if not a signed contract) from the client that outlines the terms of the project clearly. Never accept a project based solely on an oral agreement between you and the client. Also make sure that any further changes in project requirements, deadlines, follow-ups are also communicated through mail or in a written format.
Asking for acknowledgement once they have read the mail is a smart way of safeguarding yourself because that way the client cannot state that they never received the mail or that it was lost in the servers.
5) Be clear about who will be the owner of Intellectual Property so created
Technically speaking, a freelancer who creates a computer program, writes content for others, artwork, piece of music, photography or multimedia work owns that intellectual property. In other words, you could take that great website you created for the ABC company and sell, license, or publish the work.
Since that will understandably make most companies uncomfortable, they will insist that the project will be their intellectual property. At best, spell out the details of the ownership rights and make sure it is clearly mentioned in written communication.
6) Have a Legal Contract
Speaking of legal contracts, always have one! Always! A client who insists on contracts is more likely to be professional and less troublesome for payments. But beware of legal traps - read each and every word, every clause very carefully or else you might end up liable for something that you do not agree to. For example: all the damages incurred by the client in case the project fails to deliver. If you find the contract language too technical for you to understand, you can get your agreement reviewed from lawyers for a nominal fee.
A legal contract will protect you and your client and should spell out all the details of your arrangement, including:
- Payments – how much and when they are due
- Scope of work – exactly what you will do and when you will have it completed
- Drafts, changes, edits – how many iterations are acceptable, additional payment for revisions, etc.
- Rights to the work – we already discussed who owns the property, but be sure to spell out any intention you may have to use that content in promotional or marketing materials.
7) Income and Taxes
If you work on multiple projects with incomes running into lakhs per year, you will be responsible for self employment taxes. Keep diligent records of all your business-related transactions, send payment invoices and get receipts from clients to know your income sources and how much tax you need to pay to the government.
8) Sign Non-Disclosure Agreements (NDAs) if required and honor them
A Non Disclosure Agreement (NDA) is a confidentiality contract between two parties. If you are working on a product concept or ideas with co-founders, it is likely that you may be asked to sign a NDA with them. In this case, agreeing to sign such a contract instills confidence and trust while they discuss their ideas with you. Dishonouring such a contract can have serious legal implications if you are found guilty and the product is a potential game changer in the market.
9) Get Registered as a Company and Trademark your Brand
If you are an established freelancer, have a regular inflow of projects and a good network of business partners/clients, you might want to establish yourself as a brand. In that case starting a One Person Company (OPC) will be the logical decision. Registering your business activities as a company and trademarking your product/projects will give you a better legal right of owning your brand and help you benefit from the value addition.
10) Copyright your content/projects
A company usually retains the copyright on the piece of work that you submit to them. If you cannot negotiate to own that right, you can ask them to show credits somewhere in their project. Also, if you want to showcase the project in your portfolio, you should have permission from the client or else you might face legal action.
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