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Sample Contract Review
Freelance web development agreement · $15,000 fixed fee · 6-month term
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This contract has significant red flags. Consider negotiating changes or consulting an attorney.
This freelance web development agreement has several significant issues that should be addressed before signing. The IP assignment clause is overly broad and would transfer ownership of your pre-existing code libraries. The payment terms (Net-60) are unusually long for freelance work, and the non-compete clause is aggressive for an independent contractor relationship. The contract also lacks a liability cap and has vague scope definitions that create scope creep risk.
Red Flags
5🚨 Overly broad IP assignment — includes pre-existing work
High severity“"All work product, deliverables, inventions, and intellectual property created by Contractor, including any tools, libraries, frameworks, or methodologies used in performance of the Services, shall be the sole and exclusive property of the Client."”
This clause transfers ownership of everything you use on the project — including your own pre-existing code libraries, frameworks, and tools that you built before this contract existed. If you use your own React component library or custom CSS framework, the client would own it.
Insist on a "pre-existing IP carve-out" clause that explicitly states your existing tools, libraries, and frameworks remain your property, with the client receiving a license to use them in the delivered project. Standard language: "Contractor retains all rights to Contractor's pre-existing intellectual property. Client receives a perpetual, non-exclusive license to use such pre-existing IP solely as incorporated in the Deliverables."
🚨 Net-60 payment terms with subjective approval requirement
High severity“"Payment shall be made within sixty (60) days of invoice submission, subject to Client's reasonable satisfaction with the delivered work product."”
Net-60 means you could wait two months to get paid — and the "reasonable satisfaction" condition gives the client subjective grounds to delay or withhold payment indefinitely. Standard freelance payment terms are Net-15 to Net-30, and acceptance criteria should be objective, not subjective.
Negotiate payment terms to Net-30 or Net-15. Replace "reasonable satisfaction" with objective acceptance criteria: "Payment is due within 30 days of invoice. Client has 10 business days to request specific revisions. If no written objection is received within 10 business days, work is deemed accepted."
🚨 18-month non-compete with broad scope
High severity“"Contractor agrees not to provide similar services to any direct or indirect competitor of Client for a period of eighteen (18) months following the termination of this Agreement."”
An 18-month non-compete that covers "indirect competitors" is extremely broad for a freelance relationship. This could effectively prevent you from working in your field for a year and a half. Courts increasingly scrutinize non-competes for independent contractors, and some states (like California) ban them entirely.
Push to remove the non-compete entirely — it is unusual and often unenforceable for independent contractors. If the client insists, negotiate it down to: (1) 3-6 months maximum, (2) only direct competitors specifically named in the contract, and (3) only for the specific type of work performed under this agreement.
🚨 Unlimited liability and broad indemnification
High severity“"Contractor shall indemnify, defend, and hold harmless Client from any and all claims, damages, losses, costs, and expenses arising out of or related to the Services, without limitation."”
The words "without limitation" mean you could be liable for unlimited damages — far exceeding the contract value. If the client suffers a major business loss and blames it on your work, you could be personally liable for damages many times larger than what you were paid.
Add a liability cap: "Contractor's total aggregate liability shall not exceed the total fees paid under this Agreement." Also narrow the indemnification to claims arising from your actual negligence or willful misconduct, not all claims "related to" the services.
⚠️ Vague scope of work with no change order process
Medium severity“"Contractor shall perform web development services as directed by Client from time to time, including but not limited to design, development, testing, and maintenance."”
"As directed from time to time" and "including but not limited to" create unlimited scope. The client can keep adding requirements without additional compensation. There is no defined deliverable list, no milestone schedule, and no process for handling scope changes.
Replace with a specific Statement of Work (SOW) attached as an exhibit that lists exact deliverables, milestones, and timeline. Add a change order clause: "Any work outside the SOW requires a written change order signed by both parties, specifying the additional scope, timeline, and fees."
Missing Protections
5No liability cap
HighThe contract has unlimited liability exposure. Standard practice is to cap total liability at the total fees paid (or 1-2x fees paid). Without this cap, a single project could create liability many times larger than the contract value.
No termination rights for Contractor
HighThe contract allows the Client to terminate at any time with 7 days notice, but gives the Contractor no corresponding right to terminate. You should have the right to terminate with reasonable notice (14-30 days) and be paid for work completed.
No kill fee or payment for work in progress
HighIf the client terminates the contract, there is no provision requiring payment for work already completed. You could do 80% of the project and receive nothing if the client terminates before final delivery.
No dispute resolution clause
MediumThe contract does not specify how disputes will be resolved. Without this, disputes default to litigation, which is expensive and time-consuming. Consider requiring mediation first, then arbitration.
No late payment penalty
MediumThere is no consequence for late payment. Consider adding a late payment fee (e.g., 1.5% per month) and the right to pause work if payment is more than 15 days overdue.
Key Terms Explained
6| Term | Your Contract Says | What It Means |
|---|---|---|
| Contract Value | $15,000 fixed fee | Total project fee is $15,000. Payment is in three installments: $5,000 upon signing, $5,000 at midpoint, and $5,000 upon completion. |
| Payment Terms | Net-60, subject to approval | Invoices are due within 60 days of submission, but only after the client approves the work. This is significantly longer than the standard Net-15 to Net-30. |
| Contract Duration | 6 months (auto-renews) | Initial term is 6 months. The contract automatically renews for successive 6-month terms unless either party gives 30 days written notice of non-renewal. |
| Non-Compete | 18 months, direct and indirect competitors | You cannot work for any of the client's direct or indirect competitors for 18 months after the contract ends. This is unusually broad for a freelance agreement. |
| IP Ownership | All IP assigned to Client (including pre-existing) | Everything you create or use on the project becomes the client's property, including your pre-existing tools and libraries. No license-back provision for your own IP. |
| Termination | Client: 7 days notice; Contractor: no right specified | The client can terminate with 7 days notice for any reason. The contract does not specify the contractor's right to terminate. |
Negotiation Suggestions
5IP ownership too broad
High priorityAll work product, including tools, libraries, and frameworks, shall be the sole property of the Client.
Work product created specifically for this project is assigned to Client. Contractor retains ownership of all pre-existing IP, granting Client a perpetual, non-exclusive license to use it in the delivered project.
Payment terms too slow
High priorityPayment within 60 days, subject to Client's reasonable satisfaction.
Payment within 30 days of invoice. Client has 10 business days to provide written objection with specific requested changes. If no objection is received, work is deemed accepted. Late payments accrue interest at 1.5% per month.
Non-compete too aggressive
High priority18-month non-compete covering direct and indirect competitors.
Remove non-compete entirely (standard for independent contractors). If required, limit to: 3 months, only named direct competitors, only for the specific type of project performed.
No liability cap
High priorityUnlimited indemnification "without limitation."
Total aggregate liability capped at total fees paid under this Agreement. Indemnification limited to third-party claims arising from Contractor's gross negligence or willful misconduct.
No scope change process
Medium priorityServices "as directed by Client from time to time."
Attach a detailed Statement of Work. Any additional work requires a signed change order specifying scope, timeline, and additional fees.
Questions to Ask Before Signing
7Ask these questions before signing. Get the answers in writing (email is fine).
- 1
Will you add a pre-existing IP carve-out so my existing code libraries and frameworks remain my property?
- 2
Can we change payment terms from Net-60 to Net-30 with objective acceptance criteria instead of subjective "satisfaction"?
- 3
Can we remove the non-compete clause entirely, or at minimum reduce it to 3 months covering only named direct competitors?
- 4
Will you add a liability cap equal to the total contract value ($15,000)?
- 5
Can we attach a detailed Statement of Work with specific deliverables, milestones, and a change order process?
- 6
What happens to payment for completed work if you terminate the contract early — is there a kill fee?
- 7
Can the contractor also have the right to terminate with 14 days notice?
Not legal advice
This review is provided for informational and educational purposes only. It does not constitute legal advice and does not create an attorney-client relationship. ReviewMyContract is not a law firm. Contract law varies by jurisdiction and circumstance — and laws change. For advice about your specific legal situation, consult a licensed attorney.
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