Create a legally-sound agreement that protects YOUR rights as a freelancer. Unlike typical IC agreements that favor companies, this generator creates contracts that protect the contractor.
As an independent contractor, you occupy a unique position in the business world. Unlike traditional employees, you're not subject to many of the employer-employee dynamics that can limit your negotiating power. You are a business providing services to another business, and that fundamental difference gives you significant leverage when it comes to contract terms.
Most independent contractor agreements you'll encounter are drafted by companies to protect their interests. They assign all intellectual property to the company, require you to indemnify them for nearly everything, limit their liability while exposing you to unlimited risk, and often include restrictive non-compete clauses. But here's the key insight: you don't have to accept these terms.
As an independent contractor, you are not an employee. You are a vendor, a business partner, a professional service provider. This status gives you the right to negotiate terms that work for both parties, not just the client.
One of the defining characteristics of independent contractor status is control over how you perform your work. The IRS and courts look at this control element when determining worker classification, and it's also a key area where you can assert your rights contractually.
If a contract includes too many control provisions (specific work hours, required equipment, detailed supervision), it could jeopardize your independent contractor status. This matters for taxes and could expose both you and the client to misclassification liability.
Your contract should explicitly acknowledge your independent status and your control over the means and methods of performing the work. Consider including language like:
"Contractor shall have full control over the manner and means of performing the Services, including the choice of place and time of work, the equipment and tools to be used, and the methods and processes to be employed. Client's interest is solely in the results achieved."
This is one of the most overlooked areas in contractor agreements, and getting it wrong can cost you significantly. Many standard contracts include broad IP assignment clauses that could inadvertently transfer your pre-existing intellectual property to the client.
Without proper protections, a poorly drafted contract might give the client rights to tools and assets you've spent years developing. Even worse, it could prevent you from using these assets in future projects.
Always include a schedule or exhibit listing your pre-existing IP that you'll be using or incorporating into the project. Make clear that these items remain your property, with the client receiving only a limited license to use them as incorporated into the deliverables.
Getting paid fairly and on time is fundamental to your business's survival. Yet many contractor agreements favor the client with long payment terms, subjective approval requirements, and no consequences for late payment. You can and should negotiate better terms.
| Element | Client-Friendly | Contractor-Friendly |
|---|---|---|
| Payment Terms | Net 60 or Net 90 | Net 15 or Due Upon Receipt |
| Deposit | None required | 25-50% upfront |
| Late Fees | None specified | 1.5% per month interest |
| Work Stoppage | Not allowed | After 14 days overdue |
| Kill Fee | None | 50% of remaining value |
Requiring an upfront deposit accomplishes several things: it demonstrates client commitment, reduces your financial risk, and establishes a professional relationship from the start. For project-based work, 50% upfront is reasonable and increasingly standard. For retainer arrangements, requiring the first month's payment before starting work is appropriate.
As a business-to-business relationship, you have considerable freedom in negotiating contract terms. Unlike employment relationships governed by labor laws, independent contractor agreements are primarily governed by contract law, which gives both parties wide latitude to structure their arrangement.
Everything in a contract is negotiable until it's signed. Don't assume that because something is in the client's template, it must stay there. The worst they can say is no.
A clearly defined scope of work is your primary defense against scope creep. The more specific you are about what's included (and what's not), the easier it is to manage expectations and charge for additional work.
Limit your warranties to what you can actually control and guarantee. Standard warranties include:
Disclaim implied warranties of merchantability and fitness for particular purpose. Never guarantee specific business results like revenue increases, rankings, or conversion rates.
Beyond the basic payment structure, include provisions for:
Consider using a licensing model instead of full assignment:
Protect yourself with balanced termination rights:
Mutual confidentiality obligations are reasonable, but watch for overreach:
Consider your options carefully:
Protect yourself from liability for delays due to circumstances beyond your control:
Late payment is one of the most common challenges freelancers face. Building protections into your contract from the start is far more effective than trying to collect after the fact.
1. Upfront Deposits: Require 25-50% before starting work. This reduces your exposure and demonstrates client commitment.
2. Milestone Payments: For longer projects, tie payments to specific milestones. Don't proceed to the next phase until the previous payment is received.
3. Automatic Interest: Include automatic interest charges (1-2% monthly) on overdue invoices. This creates an incentive to pay on time.
4. Work Stoppage Rights: Give yourself the explicit right to pause work if payment is significantly overdue (e.g., 14 days). Include language that deadlines are extended by the duration of any payment-related work stoppage.
5. IP Rights Retention: Make the transfer or licensing of IP contingent on full payment. Until you're paid, the client has no rights to use the work.
6. Collection Cost Recovery: Include a provision that the client pays reasonable collection costs, including attorney's fees, if you have to pursue payment.
Consider offering a small discount (2-3%) for early payment. This can motivate clients to pay faster while still being worthwhile for you in terms of cash flow improvement.
The generator tool in the next tab is specifically designed to create agreements that protect YOUR interests as a contractor. Here's what makes a pro-contractor agreement different:
Instead of assigning all rights to the client, the default is licensing. You retain ownership and grant usage rights. This preserves your portfolio rights and the ability to reuse techniques and methods.
The agreement includes late payment interest, work stoppage rights, collection cost recovery, and kill fee provisions. These aren't afterthoughts; they're core terms.
Your liability is capped at fees paid, consequential damages are excluded, and indemnification is mutual. You're not taking on unlimited risk for limited compensation.
You can terminate for non-payment. If the client terminates early without cause, they owe a kill fee. All work completed through termination is paid for.
Disputes are resolved in your state, under your state's law. You're not forced to travel across the country to pursue your rights.
Click the "Generator" tab above to create a customized pro-contractor agreement that incorporates all these protections. The live preview lets you see your document as you build it.
Enter your details as the independent contractor providing services.
This agreement is designed to protect YOU, the contractor. It includes late payment penalties, kill fees, IP protections, and work stoppage rights that typical company-drafted agreements omit.
Enter the details of the company or individual hiring you.
Define exactly what you will deliver. Clear boundaries prevent scope creep.
Any work beyond the defined scope will require a written change order and additional compensation at your stated rate.
Set fair payment terms that protect your cash flow and ensure timely compensation.
This agreement includes late payment penalties (1.5% monthly), work stoppage rights for overdue invoices, and kill fee protection.
Protect your intellectual property and retain valuable rights to your work.
By default, this agreement uses licensing (not assignment) so you retain ownership of your work and grant usage rights to the client.
Limit your liability and protect yourself from unreasonable claims.
Why these matter: Without proper protections, you could be held liable for damages far exceeding what you were paid. These clauses are standard in professional services agreements.
Set fair termination terms that protect your right to payment for work completed.
If the client terminates early without cause, you're entitled to a kill fee to compensate for lost opportunity and reserved time.
Final provisions to complete your agreement.
Understanding key contract clauses is crucial for protecting your interests. Below, we break down each important clause with examples of contractor-friendly versus problematic language you might encounter.
Why It Matters: A vague scope of work is the primary cause of scope creep, unpaid extra work, and client disputes. Clear boundaries protect your time and ensure fair compensation.
Problematic LanguageKey Elements to Include:
Why It Matters: Getting paid on time is fundamental to running your business. Strong payment terms create incentives for prompt payment and protect you when clients are slow.
Problematic LanguageKey Elements to Include:
Why It Matters: Your intellectual property is your most valuable business asset. Broad IP assignments can strip you of work you've created, including pre-existing tools and methodologies.
Problematic LanguageKey Elements to Include:
Why It Matters: Without liability limits, you could be sued for damages far exceeding what you were paid. A $5,000 project shouldn't expose you to a $500,000 lawsuit.
Problematic LanguageKey Elements to Include:
Why It Matters: Indemnification clauses can make you responsible for defending the client against third-party claims - even claims that aren't your fault. These can be financially devastating.
Problematic LanguageKey Elements to Include:
Why It Matters: When clients can terminate without penalty, you bear all the risk of turning down other work and clearing your calendar. Kill fees compensate for this opportunity cost.
Problematic LanguageKey Elements to Include:
Why It Matters: Overly broad non-compete clauses can prevent you from working in your field entirely. As an independent contractor, you should generally not agree to non-competes.
Problematic LanguageKey Elements:
Why It Matters: Confidentiality is reasonable, but perpetual, one-sided obligations can be problematic. Ensure your information is protected too, and that there's a reasonable time limit.
Problematic LanguageKey Elements:
Why It Matters: If a dispute arises, you don't want to have to travel across the country (or world) to pursue your rights. Keep jurisdiction in your home state.
Problematic LanguageKey Elements:
Many contractors accept unfavorable terms because they don't know they can negotiate, or they're afraid of losing the client. Here are proven strategies for securing better terms while maintaining good client relationships.
The single most effective negotiation strategy is to be the one who provides the contract. When you present your own terms, those become the baseline for discussion, and any changes are deviations from YOUR terms, not theirs.
"I've prepared a standard agreement that covers the terms we discussed. I'll send it over for your review."
If the client insists on using their contract, you're now negotiating from a weaker position - but you still have leverage. The key is to treat their contract as a starting point, not a final document.
When requesting changes, position them as normal, expected, and professional. Clients are more receptive to "industry standard" terms than special requests.
"These liability protections are standard in professional service agreements. I carry E&O insurance specifically for this, but my policy requires these contract provisions."
"Net 30 with late fees is standard for professional services. I've found it helps maintain predictable cash flow for both of us."
Not every clause needs to be perfect. Focus your negotiation energy on the issues that matter most:
You can be more flexible on items like confidentiality duration, non-solicitation, or notice periods if the core protections are in place.
Instead of saying "I have concerns about this section," provide specific alternative language. This makes it easy for the client (and their legal team) to evaluate and accept your changes.
Instead of: "The indemnification clause is too broad."
Try: "I'd like to modify Section 7 as follows: [paste your revised language]. This makes the indemnification mutual and caps it at fees paid, which is more balanced for both parties."
Before any negotiation, decide what terms are absolute requirements versus nice-to-haves. Some things worth walking away over:
Having a clear walk-away point gives you confidence in negotiation. The client needs you too - that's why they're hiring you.
Blaming a third party can make difficult asks easier. It depersonalizes the request and implies that the issue isn't about trust or the relationship.
"My accountant requires that I maintain ownership of my pre-existing code libraries, with a license granted to clients. It's a tax and liability thing."
"My lawyer reviewed this and flagged the indemnification clause as something we'd need to modify. Here's the language she suggested..."
Negotiations work best when both parties feel they've gained something. When asking for a significant change, consider what you can offer in return.
"I understand you'd prefer a full IP assignment. I can do that if we increase the project fee by 15% to account for the additional rights transfer - that's my standard assignment premium."
"I can agree to a shorter payment window if we include a 50% deposit upfront. That way my cash flow is protected and you get faster payment terms overall."
Successful negotiation is professional, not adversarial. Keep emails concise, specific, and solution-oriented. Avoid:
Instead, approach it as two professionals working out fair terms for a business relationship. Most clients respect contractors who are professional about their contract terms - it signals competence.
Keep a paper trail of all contract negotiations. If discussions happen verbally, follow up with an email summarizing what was agreed. This protects both parties and prevents "I thought we agreed to..." disputes later.
"To summarize our call: we agreed to modify the payment terms to Net 15, add a kill fee of 50% for early termination, and change the IP clause to licensing rather than assignment. I'll send over the revised contract reflecting these changes."
Your leverage is highest before you start work and before signing. Once you've started or signed, your negotiating position weakens significantly. That said:
Don't rush to sign just to start work. Take the time to get terms right upfront - it's much harder to fix later.
The client wants to work with YOU. They've already decided you're the right person for the job. Reasonable negotiation of standard terms rarely costs you the engagement - and clients often respect contractors more for being professional about business terms.
Use this interactive checklist to evaluate contracts you're considering. Check any red flags present in the contract you're reviewing. The more boxes checked, the more carefully you should negotiate before signing.
No red flags identified. This contract appears contractor-friendly.
1-3 red flags: Standard negotiation points. Most of these can be resolved with a professional email requesting changes. Use the Key Clauses tab for suggested alternative language.
4-6 red flags: Significant concerns. This contract needs substantial revision before signing. Consider whether this client will be worth the effort to negotiate, and be prepared to walk away.
7+ red flags: Major warning sign. This contract is significantly tilted against you. Either this requires a complete rewrite, or this may not be the right client. Consider sending your own contract instead.