Your contract can be broken into the following sections and each section can consist of multiple clauses. 

4.1 Intellectual Property Rights

As explained by the World Trade Organisation: “Intellectual property rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time.”

As a creator, this is probably one of the most important sections for you in the entire contract. You should include: 

4.1.1 Ownership Transfer Details: The project is your intellectual property unless all payments are made and other conditions from the contract are met. 

4.1.2 Multiple Artworks: Copyright of only the final artworks will be transferred and all the rejected artworks will remain your intellectual property after the ownership is transferred. 

4.1.3 IPR of Content Shared by Client: Any content shared by the client implies that they have the legal rights to share it with you. 

4.2 Limitation of Liabilities

As explained by Tech Target: “A limitation of liability clause (sometimes referred to simply as a liability clause) is the section in a contracted agreement that specifies the damages that one party will be obligated to provide to the other under terms and conditions stipulated in the contract.”

So what is a liability in legal terms? Here is a definition by Britannica: “Liability, in law, a broad term including almost every type of duty, obligation, debt, responsibility, or hazard arising by way of contract, tort, or statute.”

This means that these clauses help you limit your responsibilities in case of unforeseeable errors, losses, or damages that may occur while working on any project.

4.2.1 Indemnity

As explained by RocketLawyer: “An indemnity is a promise by one party to compensate another for the loss suffered as a consequence of a specific event, called the ”trigger event”.”

It means that in case of any copyright claims or other disputes from a third party, the contractor (if the contract is drafted by the client) may have to compensate for the harm and losses incurred, which can also include attorney fees. 

Usually, it’s the big corporations that put indemnity clauses in their contracts, and freelancers never even get the wind of how we can use it in our favour. 

To protect your interests, I believe it is important that you add this clause in your contract. By doing so, in the case of disputes, your liabilities could be limited to the commission you would receive for providing creative services to the client.

While drafting the clause, you can limit your liabilities by capping the indemnification amount. You can achieve this by mentioning that any claim against you would be limited to the relevant fees paid to you by the client.

There should also be some exceptions to the Limitations of Liability clauses that you need to be aware of. In the case of a major loss (loss of opportunity, death, personal injury, property damage, environmental pollution, or any other major loss) due to negligence or misconduct by a client, you need to clarify that these cannot be capped by the indemnity amount. The exceptions are:

4.2.2 Gross Negligence

As explained by The Free Dictionary by Farlex: “Gross negligence is a conscious and voluntary disregard of the need to use reasonable care, which is likely to cause foreseeable grave injury or harm to persons, property, or both. It is conduct that is extreme when compared with ordinary negligence, which is a mere failure to exercise reasonable care.”

Gross negligence happens when a person disregards ordinary care and acts rashly leading to harmful and avoidable consequences. 

4.2.3 Wilful Misconduct

According to Law Insider: Willful Misconduct means conduct that is either intentional or committed under circumstances exhibiting a reckless disregard for the safety of others, such as a failure after knowledge of impending danger to exercise ordinary care or a failure to discover the dangers through recklessness or carelessness.

Wilful misconduct happens when a person, in the full knowledge that their actions will lead to harmful consequences, acts deliberately causing harm to people, property, or the environment. 

4.3 Termination of Services

This is by far, the most practical clause for a freelancer. Sometimes, due to various circumstances, the client terminates a project after completion of a phase or just in between a project. 

According to Contract Standards: “The Termination clause details the circumstances under which the parties may end their legal relationship and discontinue their obligations under the agreement. Under common law, the parties may terminate the agreement for material or fundamental breach of the agreement.”

This clause helps you outline the conditions in which both parties can terminate the contract if the terms of the contract are not met. It can be amicably achieved by defining termination fees so that you get paid for the work you have already done.

Contract Standards defines termination fees as: “The Termination Fee clause details fees a terminating party must pay if it chooses to terminate the agreement, typically only for certain types of termination.”

4.4 Severability

According to Contract Standards: “A Severability clause states what will happen to an agreement if part of that agreement is declared unenforceable by a court.”

Severability clause allows parts of the contract to remain valid even if one or more if it’s clauses is held invalid or unenforceable by the court. Without a severability clause, the whole contract will, by default, be considered void if any part of it is deemed invalid.

4.5 Independent Arrangements

An Independent arrangement clause ensures that only the project deliverables mentioned in the Scope of Work will be considered a part of this contract. Everything above and beyond that is not mentioned in the Scope of Work will amount to another project.

This ensures that you do not have to deliver anything other than what you have mentioned in the contract. For example, printing business cards or installing a signboard, etc.

4.6 Force Majeure

As explained by Investopedia: “Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations.”

COVID-19 has disrupted millions upon millions of lives. As a result of this pandemic, you would have been affected directly or indirectly by it (I hope you, my reader, are safe and healthy). A Force Majeure clause comes into action in this scenario. 

In case of an unforeseen disaster that disrupts the lives of people where you live, then you cannot be held liable for delays or failure while working on the project.

4.7 Confidentiality or Non-Disclosure

As explained by Investopedia: “A confidentiality agreement is a legal agreement that binds one or more parties to non-disclosure of confidential or proprietary information. A confidentiality agreement is often used in situations wherein sensitive corporate information or proprietary knowledge is not to be made available to the general public or to competitors.”

Having confidentiality clauses in your contract is a good practice as it shows your good intentions to protect a client’s proprietary information until it is made publicly available.

Having a simple clause that you will not share the contents of the project publicly until it has been done by the client ensures the protection of the project.

If however, you are dealing with client data and proprietary information that they would want to protect, the client may ask you to sign a confidentiality or non-disclosure agreement (NDA). 

If you would like, I can create a post where I talk about writing your own NDA if you are presented with one by a potential client. This way you can share your agreement with the client or negotiate to add, edit or remove clauses from their contract that would not be beneficial for you. Let me know in the comments section.