The Importance of Contracts4:00 with Pasan Premaratne
Many freelancers new to the industry tend to avoid contracts because they think it lowers their chance of getting work. Unfortunately they may be setting themselves up to be taken advantage of and that’s the last thing we want. Let’s spend some time understanding the importance of contracts and why we should use one regardless of the type of client or scenario we’re in.
[MUSIC] 0:00 Working on fun projects with great clients is what makes freelancing rewarding. 0:05 Unfortunately, this isn't always the case. 0:10 Sooner than later, you're going to run into someone 0:13 who will completely turn you off to the profession. 0:15 And this will happen more often earlier on in your career as you 0:18 try to understand what makes for a good client that you're happy working with. 0:21 There are certain things that you can do to make 0:26 life easier if you end up with a bad client, 0:28 but one of the first lines of defense should be 0:31 your ability to identify what makes for a bad client. 0:33 It's hard to tell if someone's a bad egg before working 0:36 with them, but there are certain characteristics you can look out for. 0:39 If you encounter any of the following, that's a 0:43 sign that they may be difficult to work with. 0:46 They won't be the worst clients ever, but it's up to 0:48 you to judge whether you'd be okay working with them or not. 0:50 If they are a poor communicator, if they take a long time to get 0:55 back to you or are hard to understand in their emails or calls with 0:58 you, you will have a hard time trying to figure out what the project 1:01 is about, and an even harder time getting the client to review and approve work. 1:05 If there are other stakeholders involved, and the client is your 1:09 only point of contact, expect to spend a lot of time emailing. 1:12 If they can't explain the project properly, 1:16 the client shouldn't have to provide solutions. 1:19 That's your job as a freelancer. 1:21 But the client should be able to either describe the problems 1:24 they have or give a general idea of what they need. 1:26 I'm a photographer and I need a website to 1:29 display and advertise my photos, is a perfect example. 1:31 If a client can do either of those things, they'll turn out to be 1:35 those clients that tell you they will know what they want when they see it. 1:38 If they're hesitant to talk about costs, if the client doesn't mention a budget or 1:42 dodges the topic, you will find it equally hard to get them to pay you. 1:47 If they don't sign contracts, this is crazy. 1:51 Walk away immediately. 1:54 Your contract isn't an option and you shouldn't be 1:55 doing business with clients who refuse to sign contracts. 1:58 Then there's other things, like if they worked with a few 2:02 other freelance designers before you, but couldn't get the right product. 2:04 These are all signs that they're impossible to work with. 2:08 Unfortunately, it can be hard to see these signs. 2:11 Or you might not have a choice when you first start out, and 2:14 are in need of experience, working your portfolio, and money in the bank. 2:16 You have no choice but to work with these types of clients. 2:21 In such cases, a contract is your best friend. 2:24 While the experience of working with the client won't be any 2:27 less pleasant, a contract will make sure you're protected along the way. 2:29 So what are contracts and why do we need them? 2:34 A contract is simply something that defines 2:37 a relationship between you and the client. 2:40 It covers many different things in four main areas. 2:42 Working relationships, payment, copyright use, and one large category 2:45 full of miscellaneous stuff that we'll just call legal. 2:50 Notice I used the word something when 2:54 describing a contract instead of a document. 2:56 That's because contracts aren't always long form legal documents. 2:58 Contracts can be detailed, multi-page tomes or short documents 3:03 with the minimum needed to get a project started. 3:07 There isn't a right way and it all depends on the type 3:10 of freelancer you are and the clients you want to work with. 3:12 But all contracts should cover these four important areas, 3:16 working relationships, payment, copyright and any other legal issues. 3:19 At its basic level a contract should provide a definition 3:24 of the project you will be working on, terms and 3:28 conditions regarding payment, copyright protection and limitations on the use 3:31 of your work, and protection in the event of a dispute. 3:35 Contracts define the rights and obligations of all parties involved 3:39 but most often benefit only the party that created it. 3:43 Well written contracts should benefit all parties equally, 3:46 but that is quite a hard task to accomplish. 3:50 Once the parties agree to the terms of the contract and 3:52 sign off on it, the contract forms a legally binding agreement. 3:55
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