Freelancing is an admirable profession because freelancers have to be responsible for their own employment rights. Unlike employed individuals who have labor unions protecting their rights, freelancers lack such a luxury. Drafting a freelance service agreement is one way of protecting their rights. However, do you know that an agreement serves to benefit the client as well? If you’re a freelancer or considering to engage a freelancer, it’s important that you understand what entails in a freelance service agreement!
1.Personal particulars and dates
Imagine a service agreement to be similar to a letter of employment. The full name of the freelancer and client, the full name of the company representing the client (if applicable), and contact details for both parties (phone number, email address, physical address) must be indicated to serve as identification and avoid confusion. The dates when the service agreement is drafted and signed should be indicated as well.
2.Job responsibilities and deliverables
This is an important clause to prevent the client from demanding beyond what the freelancer has promised and to ensure the freelancer delivers what was agreed upon. Both parties must agree upon what will be delivered (the deliverables) at the end. In addition, the responsibilities required of the freelancer should be clearly stated.
In ensuring the freelancer delivers as much as possible, both parties should agree upon a deadline that is reasonable for the work to be completed. If the client would like to follow up with work progress regularly, the deliverables may be broken down into a few segments with deadlines for each segment. This also helps the freelancer to work on the project consistently.
It is also advisable to clarify whether the freelancer may work for other clients, or work only for one client during the period of service.
3.Payment
This is probably the clause that both parties would be most concerned about. The first step in ensuring timely payment is made is to set a deadline. Next, determine how long after the deadline will the freelancer receive payment. If the client pays later than the stipulated date, will there be a penalty charge?
If the freelancer is worried about the client not making the payment, he can claim a portion first and receive the rest upon completion of the project, if agreed by the client.
If the deliverables are broken down into segments, both parties may consider payment after each segment is completed. As the nature of freelance work varies greatly, payment by segments may not be viable. For instance, caregivers at CaregiverAsia charge for their services at an hourly rate, as their assignments are relatively short. In contrast, hourly rates are not feasible for long-term assignments done at home, as the client is unable to verify the amount of time invested in the work.
Determine how the payment will be made - cash, bank transaction or cheque? Be sure both parties are comfortable with the payment mode.
4.CPF contribution
If the freelancer earns over $6000 in yearly net income, he is required to contribute to his Medisave account. Although it is usually the freelancer who makes the contributions, both parties can negotiate who will be doing so, and have it stated in the agreement.
5.Intellectual property rights
Intellectual property rights refer to the rights to the ownership of the work. More often than not, freelancers would like to gain full rights to the work they have completed, or at least display it in their portfolio, so that they may let their potential clients ascertain their aptitude. In doing so, freelancers should ensure the client is agreeable with the ownership.
6.Confidential clause
When working on a project, it is beneficial for the client to include a confidentiality clause that forbids the freelancer from disclosing confidential corporate information about the client. All confidential information should be used only for the project.
7.Tax liabilities
Freelancers are self-employed individuals and their business income is part of total personal income taxed at individual income tax rates. The party responsible for tax liabilities should be stated in the agreement.
8.Indemnity clause
To put it simply, an indemnity clause decides which party will be responsible for a lawsuit filed against the work created. If the client indemnifies the freelancer, the client bears the legal responsibilities and vice versa. If the freelancer indemnifies the client, the freelancer has to be beware of any actions the client wants him to take that may be a cause for legal action.
9.Termination of services
Apart from agreeing upon a deadline which the freelancer promises to complete the work and the client promises to pay, freelancers may also consider minimum chargeable fees if the client terminates their services prematurely.
If the client rejects the work completed by the freelancer, the freelancer may choose to prohibit the client from using his work unless reasonable remuneration is made.
On the other hand, if the freelancer needs to terminate the contract prematurely, the client may state some requirements to allow another freelancer to continue with the project, such as obtaining permission from the freelancer to hand over his work.
10.Liability clause
To protect both parties, a liability clause may be included to specify how compensation for damages can be made if either party breaches the terms of the contract. If both parties are agreeable, neither party will be held responsible.
Are you ready to be a freelance with greater peace of mind now? If you are considering to be a freelance caregiver, CaregiverAsia offers promising opportunities and benefits. We protect our caregivers with medical indemnity insurance, and our wide range of caregiving services ensures you’ll find a role that you can excel in! Visit us at www.caregiverasia.com to find out more!
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