The Freelance Contract Dictionary
A glossary of 125 common "Red Flag" terms found in freelance contracts.
Work for hire
The client owns the copyright the moment you create it. You have no rights to the source files.
Source: U.S. Copyright Office
In perpetuity
This agreement or right never ends. It is valid forever.
Source: Black's Law Dictionary
Moral rights
Check if you are being asked to waive these. Usually includes the right to be named as the creator.
Source: Cornell Law School LII
Moral rights waiver
You lose the right to be named as the creator or to object to changes in your work.
Source: Cornell Law School LII
Derivative works
The client can modify your work and own those new versions without your permission.
Source: U.S. Copyright Office
Irrevocable license
Once you give permission, you can never take it back, even if they stop paying.
Source: Nolo
Sub-licensable
The client can rent or sell your work to third parties without paying you extra.
Source: Investopedia
Transfer of title
Ownership moves to the client. Ensure this only happens AFTER full payment.
Source: LawInsider
Pre-existing IP
Check that they aren't trying to claim ownership of tools/code you owned before the gig.
Source: UpCounsel
All rights reserved
Vague but powerful; usually means you cannot use this in your portfolio.
Source: Copyright.gov
Exclusive license
You cannot sell this work to anyone else, even if it's a generic style.
Source: LegalZoom
Sublicense
Allows them to license your work to others without your consent.
Source: WIPO
Assignment of rights
Total transfer of your legal rights to another party.
Source: Black's Law Dictionary
Worldwide rights
Grants permission to use work everywhere on Earth (and sometimes beyond).
Source: Copyright.gov
License back
You need their permission to use your own work after you've 'sold' it.
Source: LawInsider
Portfolio exclusion
Explicitly bars you from showing the work in your professional portfolio.
Source: Freelancers Union
Grant of rights
The specific clause where you give away legal powers. Read carefully.
Source: Nolo
Royalty-free
You get paid once; you don't get a cut of future sales.
Source: Investopedia
Ownership of deliverables
Standard, but ensure it doesn't include your 'Background Technology'.
Source: UpCounsel
Publicity rights
They can use your name and likeness to promote the project.
Source: Cornell Law School LII
Copyright assignment
Permanent transfer of copyright ownership.
Source: U.S. Copyright Office
Patents pending
If you invent something, they might claim the patent.
Source: WIPO
Trademark ownership
They own any branding/marks you create.
Source: USPTO
Source code access
They want the 'raw' files, not just the final result.
Source: LawInsider
Buy-out
A one-time payment to take all your rights forever.
Source: Investopedia
Indemnify
You pay their legal bills if a third party sues them because of your work.
Source: Cornell Law School LII
Hold harmless
You agree not to sue the client for any losses, even if they are at fault.
Source: Black's Law Dictionary
Liquidated damages
An automatic pre-set fine you must pay if you break the contract (e.g., missing a deadline).
Source: Investopedia
Consequential damages
You are liable for their 'lost profits,' which can be far more than your project fee.
Source: Nolo
Sole discretion
The client has total power. If they 'decide' they don't like it, they don't pay.
Source: LawInsider
Injunctive relief
They can get a court order to stop you from working immediately without a full trial.
Source: Cornell Law School LII
Limitation of liability
Limits how much they owe you if they screw up. Ensure this is 'mutual'.
Source: SBA.gov
Joint and several liability
You are 100% responsible for damages even if others were involved.
Source: Black's Law Dictionary
Gross negligence
A very high bar for 'reckless' behavior. Standard in most liability clauses.
Source: Nolo
Arbitration
You cannot sue in court; you must use a private (often expensive) arbitrator.
Source: American Arbitration Association
Class action waiver
You give up the right to join other freelancers in a joint lawsuit.
Source: FindLaw
Attorney's fees
Specifies who pays the lawyers if you go to court.
Source: Black's Law Dictionary
Disclaimer of warranties
They aren't promising their data/tech actually works.
Source: Cornell Law School LII
Representations and warranties
Legal 'promises' you are making. Read each one carefully.
Source: Nolo
Third-party claims
You are responsible if someone else sues the client because of your work.
Source: LawInsider
Venue
The specific city/court where a lawsuit must happen.
Source: FindLaw
Jurisdiction
The legal system (e.g. 'New York Law') that governs the contract.
Source: Cornell Law School LII
Governing law
Same as Jurisdiction; determines which state's rules apply.
Source: Nolo
Mutual indemnification
The 'fair' version where both parties protect each other. Better than one-sided.
Source: UpCounsel
Statute of limitations
The deadline to sue. Check if they have shortened the legal limit.
Source: Black's Law Dictionary
Confession of judgment
You admit guilt in advance if a dispute happens. Extremely dangerous.
Source: Investopedia
Personal guarantee
You are personally liable even if you have an LLC/Corporation.
Source: SBA.gov
Standard of care
Defines how 'good' you have to be. Avoid 'Best' or 'Highest'.
Source: LawInsider
Damages cap
Limits the total money you might owe. Essential for freelancers.
Source: Nolo
Uncapped liability
You could lose everything you own if something goes wrong.
Source: Investopedia
Net 90
You won't get paid until 3 months after you send your invoice.
Source: Freelancers Union
Net 60
You wait 2 months for payment. Standard for big corps, tough for freelancers.
Source: SBA.gov
Pay when paid
You only get paid if the client's customer pays them first. High risk!
Source: Levelset
Audit rights
They can demand to see your personal bank records or accounting software.
Source: LawInsider
Set-off
They can deduct 'debts' from your check to 'pay back' a separate issue.
Source: Investopedia
Retainage
They keep a percentage of your pay (usually 10%) until the very end of a project.
Source: Nolo
Kill fee
Check if this exists! It's what they pay you if they cancel the project mid-way.
Source: Freelancers Union
Time is of the essence
Legal code for: 'If you are 1 hour late, the whole contract is breached.'
Source: Cornell Law School LII
Milestone approval
Payment is locked behind their 'satisfaction' at specific stages.
Source: UpCounsel
Flat fee inclusive of expenses
You pay for your own travel, software, and stock photos out of your fee.
Source: SBA.gov
Late fees waived
You agree not to charge interest even if they pay you months late.
Source: Freelancers Union
Contingency payment
You only get paid if a specific (often out of your control) event happens.
Source: LawInsider
Most favored nation
You must give them your lowest price ever given to anyone.
Source: Investopedia
Budget cap
They won't pay a penny over the limit, even if the work doubles.
Source: SBA.gov
Invoicing requirements
If the invoice isn't 'perfect,' they have a legal excuse not to pay.
Source: LawInsider
Acceptance period
How long they have to 'test' your work before they are forced to pay.
Source: Nolo
Pro-rated
Paying only for the portion of the month/work completed.
Source: Investopedia
Currency fluctuations
You take the hit if the Dollar drops against the Euro.
Source: Investopedia
Taxes and duties
Standard for freelancers, but ensure you aren't paying THEIR corporate taxes.
Source: IRS.gov
Subject to approval
Vague. They can withhold pay if they simply 'don't like it'.
Source: LawInsider
Reimbursable expenses
They pay you back. Check if they require 'pre-approval' for a $5 lunch.
Source: SBA.gov
Payment schedule
Often hidden in 'Exhibit A'. Read it before you sign.
Source: Freelancers Union
Pre-approval of costs
You can't buy a $10 stock photo without an email chain.
Source: LawInsider
Accrued interest
Check if you have the right to charge interest on late payments.
Source: Nolo
Non-refundable deposit
Good for you, bad for them. Ensures you are paid for starting.
Source: Consumer Rights
Non-compete
Restricts you from working for competitors. Check the time and geographic limits.
Source: FTC.gov
Non-solicitation
You can't hire the client's staff or 'steal' their other clients for your own business.
Source: Nolo
Non-disparagement
You agree never to say anything negative about the client, even if they treat you poorly.
Source: Cornell Law School LII
Trade secrets
Broader than an NDA; defines what 'secret sauce' you must protect forever.
Source: WIPO
Right of first refusal
You must offer them your next project or availability before anyone else can hire you.
Source: Investopedia
Exclusivity
You are barred from taking other clients while working on this project.
Source: LawInsider
No-hire clause
Similar to non-solicitation; prevents you from poaching their talent.
Source: LegalZoom
Residual knowledge
Allows the client to use 'ideas' they learned from you without it being a trade secret breach.
Source: UpCounsel
Non-disclosure
The classic NDA. Standard, but check the 'Duration' (shouldn't be forever).
Source: Nolo
Confidential information
Check if this includes your own methods/processes (it shouldn't!).
Source: WIPO
Exclusivity of effort
You must spend 100% of your work hours on them. You are an employee, not a freelancer.
Source: SBA.gov
Geographic restriction
Limits where in the world you can work or who you can work for.
Source: FTC.gov
Conflict of interest
You must tell them if you work for a competitor. Standard, but keep it narrow.
Source: Nolo
Return of materials
You must delete/return everything after the job. Keep your own 'Tools'!
Source: LawInsider
Destruction of data
A more intense version of returning materials. Often requires a 'Certificate'.
Source: WIPO
Non-circumvention
You can't go 'around' them to deal with their supplier/customer directly.
Source: Investopedia
Personal data
GDPR/CCPA rules. You are liable if you leak their customer's data.
Source: GDPR.eu
Background check
They want to dig into your criminal/credit history.
Source: FTC.gov
Duty of loyalty
A vague term that can mean you must prioritize them over your own business.
Source: Black's Law Dictionary
Relationship of the parties
Confirms you aren't partners or employees. Actually good for you.
Source: Nolo
Independent contractor
Standard. Confirms you get no benefits but keep your freedom.
Source: IRS.gov
Non-transferable
You can't hire a sub-contractor to do the work for you.
Source: LawInsider
Exclusivity of effort
Requirement to work only for this client during the project term.
Source: UpCounsel
No-poaching
Another term for Non-Solicitation of employees.
Source: LegalZoom
Subcontracting prohibited
You must do 100% of the work yourself. No helpers allowed.
Source: SBA.gov
Termination for convenience
They can fire you at any time for no reason. Ensure there is a 'Kill Fee' associated with this.
Source: SBA.gov
Evergreen
The contract renews automatically every year unless you cancel it in a very specific window.
Source: Black's Law Dictionary
Survival clause
Specifies which parts of the contract (like NDAs) stay in effect after the work is done.
Source: Nolo
Merger clause
Means 'only what is written here counts.' Your emails and verbal promises are legally void.
Source: Cornell Law School LII
Severability
If one part of the contract is found illegal, the rest of the contract remains valid.
Source: Investopedia
Successors and assigns
If the client sells their company, the new owner now owns your contract and your rights.
Source: LawInsider
Force Majeure
Excuses performance due to 'Acts of God' like war or floods. Check if 'Pandemic' is included.
Source: Black's Law Dictionary
Choice of Law
Determines which state's laws apply. If you're in CA and they're in NY, you might have to sue in NY.
Source: Nolo
Unlimited revisions
You might be stuck doing endless work for the same fee.
Source: Freelancers Union
Non-refundable
If you pay a deposit, you might not get it back even if they cancel.
Source: Consumer Rights
Material breach
A 'big' mistake that allows the other party to end the contract immediately.
Source: Cornell Law School LII
Cure period
The time you have to fix a mistake before they can sue you.
Source: LawInsider
Notice period
How much warning you must give before quitting (or they give before firing).
Source: Nolo
Entire agreement
Same as a 'Merger Clause'. Only the paper matters, not your previous chats.
Source: Black's Law Dictionary
Counterparts
You can sign two different copies and they count as one deal. Normal.
Source: Investopedia
Headings for convenience
The titles of sections don't have legal power. Only the fine print does.
Source: LawInsider
No waiver
If they let you slide once, it doesn't mean they'll let you slide again.
Source: Nolo
Ambiguities
Usually interpreted against the person who wrote the contract.
Source: Cornell Law School LII
Exhibits and schedules
The 'hidden' pages at the end where the real work/money is defined.
Source: UpCounsel
Independent contractor
Re-confirms you are not an employee. Good for tax purposes.
Source: IRS.gov
Notices
Defines how you must 'officially' talk (often via snail mail).
Source: LawInsider
Effect of termination
What happens to the work/money the moment the deal dies.
Source: Nolo
Term of agreement
The 'start' and 'end' dates. Ensure it's not open-ended.
Source: SBA.gov
Modification in writing
You can't change the deal over the phone; you need a signed paper.
Source: Investopedia
Cumulative remedies
They can use EVERY legal trick against you at once.
Source: LawInsider