A letter of intent (LOI) is a kind of document which outlines the terms of an agreement which i...
There is a drastic change in the employment scene all around the world. People are switching their careers, becoming independent more than ever which has led to the millions of freelance jobs that offer more freedom to the employees. For every freelancing employee, the company asks the freelancer to sign an agreement, known as Freelance Contract. It is an agreement between the two parties that is a freelancer and a Company. It highlights the terms and conditions of the work given to the freelancer. This agreement plays an essential role in building a fair and robust relationship between the parties involved.
In Companies, freelancers are hired to accomplish a particular task and projects need to be executed temporarily. These freelancers have specialization in their fields and work with an organization or company on an assignment basis. For hiring any Freelancer, you need to have a Freelance Contract which will outline the various terms and conditions regarding the work undertaken by the freelancer. In this blog, we will talk about the sample format for a freelance contractor in India and other aspects regarding it.
These are the few areas of work, where the company hires most of the freelancers-
The Indian Contract Act, 1872 governs all the contracts and agreement in India. Section 2(e) defines the term agreement as the promise or a set of commitments. The terms of agreement define the consideration for both the parties. Upon enforcing the agreement by law, it becomes a contract as per Section 2 (h). Let’s take a look at the clauses for the inclusion in the contract-
Basic Personal Information includes the following-
In Agreement’s scope, you need to mention the task of both the parties. It comes under consideration while sketching out the agreement. Section 2 (d) of the ICA, 1872 defines the term consideration for the freelance contract in India.
For your better understanding, here is a snapshot of a Freelance Contract-
Every organization must specify the financial statements in a clear and explicit manner. Your financial statements must not leave any space for the confusion regarding the considerations of Freelancers. You need to give proper clarification on payment information with regard to the following grounds:
● Whether you are paying the freelancers on an hourly basis, or
● Whether you are paying them on a work basis, etc.
You need to finalize upon the form of money before signing of Freelancer Contract which you decide to pay to the freelancer. Don’t forget to mention the clause which will give protection to the Company in terms of legal matters. In the cancellation clause, you need to convey that the contract nullifies if the freelancer backs out before the termination period.
The agreement is for a specific or a particular period. Your agreement must specify the termination and commencement date.
Don’t forget to insert the termination clause. The termination date varies as per the agreement. It also conveys the obligations; a licensee must fulfill before the termination of a contract.
The deadlines must be set to the work assigned to the freelancer. For all the freelancers, there is always a date given to them, on or before which they have to deliver the project.
Jurisdiction depends upon the nationality of the party’s involvement. Parties in an agreement can be of the same or different countries. The authority varies from courts of India to other courts in the world. Dispute solving requires the proper co-operation and consultation of both the parties.
This clause protects the interest of freelancers and exclusively specifies the date of payment of fees. Moreover, it must also signify the amount of interest or penalties which would be levied on the late payment.
In a freelance contract, you need to add the provision of confidentiality. There is a lot of information that goes on between the parties available in the agreement. So this information must not pass on to the third party as it consists of sensitive information.
Privity of Contract brings out the relationship between the Employer Company and freelancer. It dictates that the employer hires a freelancer as an Independent Contractor. And neither of them is liable for the Acts of each other.
There are various Boiler-Plate Clauses; these are the standard clauses which are present in every standard form of Contract. Let’s take a look at these clauses below-
There are several clauses under this category such as Waiver, Severability, Notices, and Modifications etc. We will understand every clause one by one.
When you sign a Freelance Contract, there is a Waiver clause. This clause says that if any of the party fails to enforce its contractual rights, then it will result in the waiver of the breach of that right.
Severability clause states that if there is any clause in a contract that stands illegal and unenforceable. Then that particular clause will not affect the remaining contract. The remaining of the contract (other than the unlawful or unenforceable clause) will be applicable in all circumstances
This clause specifies the handling, payments of notice which company receives or sends.
Modifications state all the forms of amendments of the agreements, whether it is an oral or written one.
The prospects of unparalleled freedom of a freelancer seem very lucrative; however, this independence projects its complications and risks. There are chances of freelancers being deceived and cheated by the companies, in terms of the pay scale, benefits, perks etc. So it is highly recommended to have a smudge-proof freelance contract that matches your terms and condition and the current market scenario.
For any information regarding the Freelance Contract, do contact Enterslice.