12 Freelance Contract Red Flags That Cost You Money
I've freelanced for about a decade. Most bad client situations were predictable from the contract — not the vibe on the call, not the promises in the email, the actual language in the agreement.
1. IP Transfer Before Payment
Some contracts transfer ownership the moment you create the work, before a single invoice is paid. Your IP clause should say ownership transfers only upon full payment. That single sentence has saved me more than anything else.
2. Unlimited Revisions
I had a client go through 17 rounds of "minor tweaks" on a logo. Two rounds per deliverable is standard. After that, it's a change order at your hourly rate.
3. Net-60 or Net-90 Payment
Common in enterprise, devastating for freelancers. Sixty days is two rent payments. Push for net-15 or net-30 with late fees. If they insist on longer terms, demand 50% up front.
4. No Kill Fee
If they cancel mid-project, you should get paid for completed work plus 25-50% of remaining scope. Without it, they can cancel on day 29 of a 30-day project while you turned down other work.
5. Indemnification with No Cap
You should never indemnify a client for more than the total fees they paid you. Uncapped means you're potentially on the hook for millions over a $5,000 project.
6. Termination for Convenience Without Pay
If they can terminate anytime for any reason, they should still pay for work in progress, not just completed deliverables.
7. Overbroad Non-compete
You're a freelancer, not an employee. A two-year industry-wide non-compete is absurd and probably unenforceable, but it can still scare future clients. Strike or narrow it.
8. Work Made for Hire on Non-qualifying Work
Copyright law restricts work-for-hire to specific categories. Outside those, a separate IP assignment is needed — and it should fire only on payment.
9. Mandatory Arbitration in a Faraway State
If you're in Texas and the contract requires arbitration in New York under New York law, your only recourse is prohibitively expensive.
10. Vague Deliverables
"A website" without page counts, feature lists, or design rounds is not scope. It's an invitation to endless work.
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Decode My LeaseFrequently asked questions
What if the client refuses to negotiate?
Walk. A client who treats freelancers as adversaries during contracting will treat you the same during the project.