Client contracts are where the leverage shifts. When you’re excited about a new project and the client sends over their standard services agreement, the temptation is to scan it, feel relieved there’s nothing obviously terrible, and sign.
Don’t do that. Freelancers lose real money — sometimes large amounts — from clauses they didn’t read carefully. Here are the specific ones that should make you pause, negotiate, or walk away.
Intellectual Property: The Clause That Can Own Your Work
IP assignment clauses determine who owns the work you create. This should be straightforward: you create it, you own it, then you license or transfer it to the client upon final payment.
Client contracts frequently say something different.
”Work for Hire” Language
If a contract designates your work as a “work made for hire,” the client is the legal author from the moment of creation under U.S. copyright law. You made it; they own it immediately — not upon payment, not upon delivery. From the moment your hands touch the keyboard.
Work-for-hire arrangements are standard in employment. In freelancing, they’re riskier because:
- They extinguish your termination rights. Employees can leave. A work-for-hire contractor can’t reclaim work.
- They may conflict with your ability to show the work in your portfolio.
- Combined with late payment (or no payment), you’ve created something the client legally owns even if they never pay you.
What to negotiate instead: Assignment of copyright upon receipt of full payment, with a license for you to display the work in your portfolio.
Overly Broad IP Assignments
Watch for language assigning “all intellectual property created in connection with the services” or “all work product, inventions, developments, improvements, and discoveries.” This can sweep in:
- Preliminary concepts and rejected drafts
- Tools, templates, or code libraries you bring to the project (that existed before this contract)
- Work created on your own time that’s loosely related to the project subject matter
What to negotiate: IP assignment limited to final deliverables as defined in the scope of work. Explicitly carve out pre-existing tools, frameworks, and intellectual property you own.
Payment Terms That Favor Them
Net-60 or Net-90 Terms
Standard payment terms for large corporations are Net-30 to Net-60 — meaning they’ll pay your invoice 30 to 60 days after receipt. Net-90 is common in enterprise contracts.
For a freelancer, Net-90 means you finish work in January and receive payment in April. Your rent doesn’t wait.
What to negotiate: Net-15 or Net-30. Many large companies will agree to better terms for smaller invoices if you ask. Offer something in return if needed — a small early payment discount (1–2%) or a deposit structure.
No Kill Fee
If a client cancels a project midway through, what do you get paid? In many standard contracts: whatever you’ve invoiced to date, which may be nothing if you hadn’t invoiced yet, and nothing for the work you were about to start.
A kill fee protects you when a client cancels a project through no fault of yours. Typical structures:
- 25–50% of remaining project fee if cancelled after start
- 100% of work completed plus a percentage of remaining fee
- Deposit that’s non-refundable and applies to the kill fee
What to negotiate: A kill fee clause — minimum 25–50% of total project value if cancelled after the project begins, with your retained deposit applicable against it.
Payment Contingent on Approval
Some contracts contain language like “payment is due upon client’s approval of final deliverables.” This sounds reasonable until you work with a client who never formally approves — or who uses approval as leverage to extract more revisions.
What to negotiate: Payment tied to delivery, not approval. “Client will pay within [X] days of delivery of final deliverables. If Client has not provided written approval or written objection within [Y] business days of delivery, deliverables are deemed accepted.”
Non-Compete Clauses
Non-compete clauses in freelance contracts are overreaching and should trigger immediate negotiation.
A non-compete says you won’t work for the client’s competitors for some period after the engagement ends. In an employment context, this is controversial but sometimes enforceable. In a freelance context, it can effectively eliminate your ability to work in your own industry.
A designer who can’t work for “any company in the consumer goods space” for 12 months after a single client engagement may have eliminated a huge portion of their market.
Key things to look for:
- How is “competitor” defined? Broad definitions are dangerous.
- What’s the duration? Six months to a year is common but worth pushing back on.
- What’s the geographic scope? National or global non-competes for a freelance engagement are unreasonable.
- Is there compensation for the non-compete period? There usually isn’t.
What to negotiate: Remove it entirely if you can. If the client insists, narrow it to direct competitors in your specific project domain, limit duration to 90 days, and ensure it’s specific enough that you could recite 10 companies it definitely doesn’t cover.
Indemnification Clauses
Indemnification says that if someone sues the client because of your work, you’ll cover the costs. These clauses can be reasonable in narrow form — you indemnify the client against claims arising from your own negligence — or wildly overreaching.
Red flag language:
- You indemnify the client against any and all claims arising from your services, including claims not caused by your actions
- You indemnify the client against “third-party intellectual property claims” without a corresponding representation from the client that they provided you legal source material to work with
- Indemnification caps are unlimited
What to negotiate: Mutual indemnification — both parties indemnify each other for their own actions. A cap on your indemnification liability equal to the project fee. Exclusions for client-provided content or instructions.
Dispute Resolution: Arbitration in Their City
Many corporate contracts include mandatory arbitration clauses requiring disputes to be resolved in the client’s home city or state. If you’re a freelancer in Austin and your client is in New York, a dispute means flying to New York (or hiring a lawyer there) to pursue a claim.
What to negotiate: Your own state’s laws governing the contract, and virtual or written arbitration options. For smaller projects, courts in your jurisdiction are often more practical than arbitration anyway.
Practical Next Step
The next time a client sends you their contract, read it fully before you sign — not skimming, actually reading. Mark every clause that touches IP, payment terms, kill fees, non-competes, indemnification, and dispute resolution.
Then decide: is this acceptable as written? Can you negotiate it? Or does the contract’s structure tell you something about how this client does business?
You’re not required to accept the first draft. A professional client expects negotiation. A client who reacts badly to reasonable contract pushback is giving you information worth having before you start work.
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