You’ve heard the advice a million times – never start a job without a signed contract. Yet somehow, it continues to happen. Here are three common scenarios to avoid.
In the first scenario, the freelancer pitches and wins the business and there’s a start date in place. That date arrives, and the primary client contact assures the freelancer that the contract is held up in legal and that signatures are coming any minute or any day now. The client proceeds to give company updates and, in good faith, the freelancer starts working on the business. In 99 percent of these situations, the contract is legitimately held up in the client’s system and the freelancer will get the contract signed and see prompt payment. However, without a contract in place, there’s nothing protecting the client’s confidential information, nor can they enforce a non-compete clause. From the freelancer’s perspective, there’s no recourse if things go awry.
Rolling Assignments Without a Formal Contract
Another common situation is when the client offers a month-to-month assignment without a formal contract. In many ways, this is a typical freelancing gig. It’s usually not an issue if you’re working on an hourly or project basis but if you’re working on retainer, it can be a problem because you might not get a two week or 30-day termination notice. If you’ve been working on a medium-to-large sized retainer, having zero notice about the end of the contract can leave you scrambling to find a replacement. Again, it also puts the client at risk with regard to confidential information and non-compete clauses.
The third scenario is rare, but it’s worth addressing. The client needs to hire a freelancer ASAP and there’s an inordinate amount of urgency around getting projects underway. When the freelancer asks for the contract, they are assured they will be paid and that legal is holding up the process. The conversation is quickly glossed over or dismissed, and the client rattles off a laundry list of urgent action items. The freelancer wants to make a good impression, so they dig into the work and start to rack up serious hours tackling the onslaught of assignments. When they again ask for the contract, the email is ignored, or the conversation is hurried and shifts back to the urgency of the work.
This isn’t a client engagement as much as it is an audition. The client isn’t intentionally planning to hold up payment or the contract. In all likelihood, they will make good on their word, but not until they’ve thoroughly tested the freelancer’s skills.
Again, in this situation, there’s absolutely nothing in place to protect the freelancer and ensure they get paid. Also, since a contract usually includes a scope of work as an addendum, without it there’s nothing formally in place to prevent scope creep. If you find yourself in a situation like this, you need to cease all work until the contract is signed and there is a conversation about the scope of work.
Clarify and qualify opportunities early
While you don’t want to appear too pushy or litigious at the start of a client engagement, you also don’t want to be a pushover. You can avoid some of these issues by asking the right questions in the first client meeting. Having a formal, signed contract is just good business sense. It protects the freelancer and the client, and it starts the engagement on the right path.