How to read a freelance or contractor agreement
Scope, payment terms, revisions, IP and kill fees explained in plain English for freelancers and contractors — with sample clauses and the red flags that lead to unpaid work.
The short answer
A freelance agreement is mostly about four things: exactly what you are delivering, exactly when you get paid, who owns the result, and what happens if the project stops. Most freelancer disputes are not about bad faith — they come from a scope that was never written down clearly and payment terms that let the client pay whenever they feel like it.
Scope is the whole contract
The single biggest cause of unpaid freelance work is a scope written as one sentence. 'Design a website' can mean five pages or fifty, one round of feedback or eleven.
A good scope lists deliverables, quantities, format, and what is explicitly not included. 'Out of scope' is not rude — it is the clause that protects the relationship.
- What exactly you deliver, with numbers (pages, revisions, assets, words, hours).
- The file formats and how they are handed over.
- How many rounds of revisions are included, and what an extra round costs.
- What is explicitly excluded from this price.
Payment terms decide your cash flow
'Net 30' means the client has 30 days after the invoice to pay. 'Net 60' or 'Net 90' means you are financing the client's business for two or three months.
Watch for payment tied to a vague event rather than a date: 'payable upon final approval' with no deadline for approval means the client controls when — or whether — you get paid.
- Ask for a deposit, typically 25-50% upfront for new clients.
- Tie milestone payments to delivery, not to approval.
- Include late payment interest, even a modest rate — it changes behaviour.
- State the currency and who pays transfer fees and taxes.
Who owns the work
By default in many places, a contractor owns copyright in what they create until it is assigned in writing. Most client contracts therefore include a full assignment of IP.
Full assignment is normal for paid client work. Two things are worth negotiating: whether the assignment happens on payment rather than on creation, and whether you can show the work in your portfolio.
What happens if the project stops
Clients cancel projects. A termination clause without a kill fee means a client can cancel at 90% complete and pay for nothing beyond the last milestone.
A kill fee is a fixed percentage payable if the client terminates for convenience. It is a standard ask, not an aggressive one.
Sample clause language
Illustrative wording, written for this guide — not copied from any real contract.
Payment shall be made within sixty (60) days following the Client's acceptance of all Deliverables in its sole discretion. The Client may request revisions until the Deliverables are satisfactory.
Unlimited revisions plus discretionary acceptance plus Net 60 means there is no date on which you are entitled to be paid.
The Client shall pay 40% on signature and 60% within fourteen (14) days of delivery of the final Deliverables. Deliverables are deemed accepted if the Client does not provide written revision requests within seven (7) days of delivery. Two rounds of revisions are included; further rounds are billed at the hourly rate in Schedule A.
Deemed acceptance, a fixed payment window and a revision cap. Everything has a date attached.
Red flags to look for
- Scope described in a single sentence with no deliverables list.
- Unlimited revisions, or revisions 'until the Client is satisfied'.
- Payment triggered by approval with no deadline for the client to approve.
- You indemnify the client for everything, including their own use of the work.
- IP transfers on creation rather than on payment.
- No right to show the work in your portfolio, with no compensation for that restriction.
- A non-compete stopping you working for anyone in the client's whole industry.
What to ask for
- Add a deposit and split the rest into delivery-based milestones.
- Cap revision rounds and price the extras.
- Add deemed acceptance after a set number of days of silence.
- Make IP assignment conditional on payment in full.
- Ask for a portfolio right, even if it is delayed or anonymised.
- Add a kill fee for termination for convenience.
- Cap your total liability at the fees paid under the contract.
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Frequently asked questions
Do I need a written contract for a small job?
Yes, and it can be short. A one-page scope, price, payment date and IP line beats a handshake and takes ten minutes.
The client sent their standard contract. Can I still change it?
Yes. Standard contracts are drafted for the client's benefit and are routinely amended. Reply with two or three specific edits rather than a full rewrite.
What is the difference between a contractor and an employee?
Broadly, a contractor controls how the work is done and works for multiple clients; an employee works under the employer's direction with set hours. The label in the contract does not decide it — the reality of the working relationship does, and misclassification has tax and legal consequences in most countries.
Related guides
This guide is general educational information about how these clauses usually work. It is not legal advice, and contract law differs by jurisdiction. For a decision that matters, speak to a qualified lawyer.