Why these seven clauses, in this order
Most freelance disputes come down to seven recurring questions: what was the scope, when does the freelancer get paid, who owns the work, how does the engagement end, what stays confidential, who's liable when something breaks, and what tax treatment applies. A contract that answers all seven cleanly avoids the vast majority of fee disputes, IP fights and HMRC challenges.
1. Scope of work
The single most-disputed clause in any freelance contract. A scope that is too vague invites endless "just one more thing" requests. A scope that is too rigid stops the engagement adapting when the brief changes - as briefs always do.
A workable scope clause has three layers: a high-level description of the engagement (one or two sentences), a list of specific deliverables with acceptance criteria where they exist, and a change-control mechanism for everything that falls outside. The change-control mechanism is the part most freelancers skip and most regret.
For agency-led briefs, attach the statement of work as an annex and reference it. For ongoing engagements (retainers), define the scope by capacity rather than output: "up to N days per month on agreed priorities" protects both sides.
2. Payment terms
Three commercial decisions and one statutory backstop:
- Fee structure - fixed, day rate, hourly, milestone-based, or retainer. Each has different cashflow implications. Fixed-price quoting carries the freelancer's risk of underestimation; day rates carry the client's risk of overrun.
- Payment timing - 30 days from invoice is the standard. 60 or 90 days from large enterprise clients is common but pushes back hard against. Anything beyond 60 days is a problem you should address before signing.
- Deposit or upfront payment - particularly for new clients or fixed-price engagements over £5k. A 25-50% deposit signals commitment from both sides.
- Statutory interest - under the Late Payment of Commercial Debts (Interest) Act 1998, B2B contracts in the UK accrue 8% above the Bank of England base rate plus a fixed compensation amount when payment is late. The right is automatic unless the contract substantially changes it. Reference it explicitly to make enforcement smoother.
3. Intellectual property ownership
Default common-law position is that the freelancer owns IP they create unless the contract assigns it. Most clients want assignment. Most freelancers should agree, but with three carve-outs:
- Background IP - pre-existing tools, frameworks, snippets and methodologies the freelancer brings to the engagement. The freelancer retains these and grants the client a perpetual licence to use them within the deliverables.
- Assignment on payment - IP transfers only when fees are paid in full. This is the freelancer's leverage if the client withholds payment.
- Open-source components - clearly disclaim that any open-source software included in the deliverables is licensed under its own terms, not assigned.
For US engagements, "work made for hire" under 17 U.S.C. §101 does not cover most freelance work - explicit assignment language is needed.
4. Termination
Two regimes: termination for convenience (either party with notice) and termination for cause (immediate, on material breach).
Convenience notice is usually 14-30 days. Shorter than 14 days leaves the freelancer exposed; longer than 30 makes the engagement feel like employment for IR35 purposes.
Cause termination should specify the triggering events: material breach unremedied within a cure period (typically 14 days), insolvency, change of control on either side. Without a cure period, every minor disagreement risks escalation.
Most importantly: agree what happens to work in progress. Standard position is the client pays for work done up to termination, and the IP in completed deliverables transfers (subject to payment).
5. Confidentiality
A confidentiality clause embedded in the contract usually does the job - a separate NDA is overkill once a master services agreement is in place.
The clause needs to define what counts as confidential (broadly described categories rather than "everything"), set a duration (2-5 years post-engagement, perpetual for trade secrets), include the standard exclusions (public domain, prior knowledge, lawfully obtained, independently developed, legally compelled), and carve out whistleblowing under the Public Interest Disclosure Act 1998.
Pair confidentiality with a return-or-destruction obligation on termination - particularly for digital materials.
6. Liability
Three sub-clauses, in this order of importance:
- Limitation of liability - cap on total liability, typically equal to fees paid in the prior 12 months. Some clients push for higher caps; freelancers should resist anything above 2x annual fees.
- Exclusion of indirect / consequential losses - lost profits, lost business, lost data. These are uncapped by default and should be excluded explicitly.
- Carve-outs to the cap - death and personal injury from negligence (cannot be excluded under UCTA 1977 s.2(1)), fraud, IP infringement, breach of confidentiality. These typically remain uncapped.
For UK B2B contracts, the Unfair Contract Terms Act 1977 reasonableness test applies - a cap that's clearly disproportionate to the engagement value can be struck down.
7. IR35 status (UK contracts)
The seventh clause is jurisdiction-specific but, for UK freelancers, it's arguably the most important. Three contractual features that evidence outside-IR35 status:
- Substitution - an unfettered right to send a suitably qualified substitute, exercisable without client veto. Must be operationally meaningful, not just on paper.
- No mutuality of obligation - neither party obliged to offer or accept work.
- Lack of control - the freelancer decides how, when and where the work is done, subject to project requirements and reasonable client co-operation.
For Chapter 10 engagements (medium and large clients), the client should also issue a Status Determination Statement before the engagement starts. Lexara's IR35 checker walks through the 15 substantive questions and produces a draft SDS.
Pulling it together
A freelance contract that gets these seven clauses right protects both sides without becoming a 30-page legal document. Lexara's freelance contract generator drafts each one based on the engagement details, with sensible jurisdiction defaults and the option to customise every commercial term. The whole contract takes about ninety seconds to generate.
The fastest way to compare drafting approaches across jurisdictions is the clause library - every UK, EU, US, Canadian, Australian, German and French clause is available to copy or adapt.