How to solve legal and contractual issues as a freelancer
By Carrie M. King →The prospect of a legal tussle got you shaking in your boots? Don’t panic. There are lots of ways to protect yourself in the event of a legal dispute. Let’s take a look.
Any kind of employment is likely to surface the occasional legal or contractual issue. With freelancing, you don’t have a HR team to help—or bamboozle—you, so when something crops up, you have to figure it out on your own. However, supports are available and at Goose, we’re working on a way to provide legal support to our community.
This article is just an overview and does not count as legal advice. Always consult a legal professional before taking any action regarding a contract dispute.
Here are some legal or contractual considerations freelancers should keep in mind.
1. If in doubt, talk to a lawyer
This point might come last in a different article but when it comes to legal issues, it’s best to proceed with caution. If you are doubtful in any way about a contract or potential legal issue, speak to a lawyer. Here are a few things freelancers might want to talk to a lawyer (Arbeitsrechtsberater) about:
- Setting up your business
- Checking or drawing up contracts
- Collecting unpaid invoices
- Dealing with tax law
- Copyright, licensing, and intellectual property
- Non-disclosure agreements
- Non-compete agreements
- Non-solicitation agreements
- Contractual disputes including terminations
- Advertising and online domain obligations and rights
That looks like a long list, but it’s not exhaustive. Most freelancers probably won’t run into any of these issues, but it’s good to know when to hit the lawyer button.
2. Read and understand your contracts
Most companies will ask freelancers to sign contracts to define the terms of the working relationship. This is usually a good thing for both parties as it defines important factors like payment terms, expectations, and project scope. These are often boilerplate agreements but some companies will be more thorough than others. No matter how standard the agreement seems, you must read and understand it fully before you sign it.
A freelancer contract should include:
- Payment terms
This defines your rate, when you should invoice, and how long after invoicing you can expect to be paid. It should also define what happens if a client does not pay.
- Scope of services
How long will the project last? What exactly are you expected to deliver and by when? How many revisions can a client ask for and will you be paid for these?
- Rights including copyright
Who owns the completed work? How can the client use your work and where? Do you transfer your intellectual property and rights to the client once they pay you for the work? Do you get credited for this work? Can you talk about the work on your website or social media?
- Confidentiality
If you have to sign an NDA, check the scope of the agreement. Are you not allowed to talk about the work at all or are you simply bound to not give away company secrets?
- Termination
If, for whatever reason, the contract needs to be terminated by either party, what are the terms under which this should happen? If you disagree with the terms of the termination, how can you dispute it?
3. Always get it in writing
Contracts are one thing, but in most cases you’ll talk to your client on a regular basis and sometimes you’ll be asked to complete extra work. If this happens, make sure that the request is submitted in writing and that any extra tasks are documented. If a client promises you any extra payment or the extra work goes beyond the scope of your initial agreement, get it in writing.
Documentation may feel like extra work, but keeping track of everything is your friend in the event of a dispute over the work. And even if you never have any issue about it, it’s good to have a paper trail to remind yourself of all the tasks you’ve completed!
4. Know your rights
When you go freelance, it’s important to understand your rights within the legal and employment landscape. Different kinds of work have varying expectations, but you need to know what is expected of you and what you can expect from your client. You need to understand who owns your work and what to do if you don’t want to give up your IP. You need to know what course of action you can take if you don’t get paid on time.
Spend some time learning about your rights in the context of your own work and industry and where you can find legal support if you need it. Which takes me neatly to…
5. Take out professional legal insurance
Legal insurance is a very, very good idea if you’re a freelancer, especially if you’re a non-native German speaker (or don’t speak any at all). But any freelancer may sometimes need a little help and perspective when it comes to sorting out legal issues. Most professional legal insurances cover:
- The cost of seeking legal advice
- Sending legal letters
- Advice on terminations
- Advice on payment disputes
- Advice on contractual issues
- Defense in case an issue goes to court
It’s important to put a lot of research into which legal insurance is right for you. Germany being Germany, there are lots of different types of legal insurances so make sure you feel good about the coverage you take out. And remember, even if you don’t have legal insurance, you’re still entitled to legal advice in the event of a dispute. You may have to pay for it, but many insurances offer hotlines and advice for free or a reduced fee.
