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5 red flags to watch out for in a freelancer contract

Freelancers could easily get involved in legal issue when certain terms are not clear and that could leave them unprotected. Here are five red flags to watch out for in a freelancer contract.

1. A non-compete clause
Some companies have a standard non-compete clause in their contract. If you sign that clause, you can’t work for another business that offers competing services, which can limit your ability to seek new assignments. As a freelancer it is important to keep your options open to get future work.

2. No payment terms
If you’re a freelancer, you know that chasing late payments can be a huge hassle; one of the best ways to prevent this chase is to get payment terms written into your contract.

3. Ownership of your intellectual property

You might also see a clause in the contract that allows the company to take ownership over your intellectual property (IP).Request to have this clause removed or modified, and consult a lawyer as needed.

4. An indemnity clause
If you see a sentence that says that you the freelancer shall indemnify the client for any reason, you’ll want to contact a lawyer to help review the terms. Indemnity is compensation paid by one party to another to cover any damages or losses, and sometimes a client will put all of the liability on the freelancer, rather than taking ownership of any losses themselves. You will need to contact a lawyer to clarity this as it can be sticky.

5. Rights grabs
Writers and artists will also want to look out for language about rights. If you’re working under work-for-hire terms, you’re producing a product that the company owns. Consider which projects you want to own, sell, or syndicate.