Freelance Contract Red Flags: 7 Clauses to Fix Before You Sign
Most freelancers don't lose money on bad work. They lose it on a contract they skimmed.
Getting paid is the biggest problem. In a Freelancers Union survey of more than 5,000 freelancers, about half said they'd had trouble getting paid in the previous year (Freelancers Union, 2015). A 2022 survey of New York freelancers found 91% had been paid late at least once in their careers, and more than half had waited three months or longer (Authors Guild, 2022).
A lot of that pain is written into the contract before the work starts. Below are the seven clauses that cause the most damage, what the warning signs look like, and what to ask for instead.
Not legal advice. This article is general information for US freelancers. Laws vary by state, and for a high-value or unusual contract, a lawyer's review is worth the money.
1. Payment terms
Red flags
- No due date at all, or "payment upon client approval" with no deadline for the approval.
- Long terms like net 60 or net 90 on a small project.
- "Paid when we get paid," which makes your income depend on the client's client.
- No late fee and no deposit.
Why it matters: if the contract never says when you get paid, you have nothing to point to when the money doesn't come.
The law may already be on your side. In Illinois, the Freelance Worker Protection Act (in effect since July 1, 2024) covers freelancers earning $500 or more from one client over 120 days. It requires a written contract with a payment date no later than 30 days after the work is delivered (NFIB; Group Management). Clients also can't make on-time payment conditional on you accepting less money (SHRM). According to the Illinois Department of Labor, freelancers who win in court are entitled to double the unpaid amount (Fox Illinois).
New York State and New York City have similar Freelance Isn't Free laws. If the contract doesn't set a payment date, the client must pay within 30 days of the work being completed (Polsinelli), and freelancers who win non-payment claims can recover double damages (Hinshaw).
What to ask for: a specific due date (net 15 or net 30), a deposit before work starts, a late fee for overdue invoices, and payment that doesn't depend on anyone but the client.
2. Scope of work
Red flags
- Deliverables described in one vague sentence, like "design the website."
- Catch-all phrases such as "and other related tasks as needed."
- No milestones, no list of what's excluded, and no process for adding work.
Why it matters: vague scope is how a $2,000 project becomes $6,000 of work for $2,000. If the deliverables aren't defined, "done" is whatever the client says it is.
Itemizing is also what the law expects. Illinois's freelance law requires the written contract to list the products and services being provided, along with their value and how you'll be paid (NFIB).
What to ask for: a numbered list of deliverables, a short "not included" list, and a change-order line. For example: "Work outside this scope will be quoted separately and requires written approval before it starts."
3. Revisions
Red flags
- "Revisions until the client is satisfied."
- No limit on the number of rounds.
- No definition of what counts as a revision versus a new request.
Why it matters: unlimited revisions turn a fixed price into an open-ended hourly job at a rate you never agreed to.
What to ask for: a set number of revision rounds (two is common), a definition of a "round" (one consolidated set of feedback), and an hourly rate for anything beyond that.
4. IP and copyright ownership
Red flags
- Ownership transfers the moment you sign, or the moment you deliver, rather than when you're paid.
- The client claims rights to your pre-existing tools, templates or code.
- No right to show the work in your portfolio.
What most freelancers don't know: "work made for hire" is narrower than many contracts assume. Work by an independent contractor counts as made for hire only if it falls into one of nine categories listed in the Copyright Act and both sides sign a written agreement saying so (US Copyright Office, Circular 30). Work outside those categories, such as a standalone logo, can't become work made for hire just by saying so in a contract. Ownership then has to be transferred with an assignment (LegalZoom). If you're giving up copyright, the Digital Media Law Project suggests it's fair to ask for extra pay (DMLP).
What to ask for: rights transfer only after full payment, you keep ownership of your pre-existing materials (the client gets a license to use them), and you keep the right to show the finished work in your portfolio.
5. Termination
Red flags
- The client can cancel at any time, for any reason, with no payment for work already done.
- You can't terminate, even if the client stops paying.
- No notice period.
Why it matters: without a termination clause that protects you, a client can cancel the day before delivery and owe you nothing.
What to ask for: payment for all work completed up to the cancellation date, a short notice period, and a kill fee, which is a set amount owed if the client cancels. Kill fees are commonly set between 25% and 50% of the project fee (SitePoint). Pairing a kill fee with an upfront deposit makes it easier to collect (Beancount).
6. Liability and indemnification
Red flags
- You indemnify the client for "any and all claims" related to the project, not just claims caused by your own mistakes.
- Your liability has no cap, while the client's is capped.
- Only you indemnify; the client promises nothing in return.
Why it matters: an indemnity clause is a promise to cover the client's costs, which can include judgments, legal fees and settlements, if a claim is made against them (NASW). Written broadly, it can make you responsible for problems you didn't cause, on a project that paid you a few thousand dollars.
What to ask for: limit your indemnity to claims arising from your breach of the contract's warranties, and cap your total liability at the amount you were paid for the work (NASW). Make the clause mutual so both sides carry the same obligations.
7. Non-compete and exclusivity
Red flags
- You can't work for "any competitor" of the client, or in the client's whole industry.
- The restriction lasts a year or more after the project ends.
- No geographic or client limit at all.
Where the law stands now: the FTC's 2024 rule banning most non-competes never took effect. A Texas federal court blocked it nationwide in August 2024 (McDermott Will & Emery), and in September 2025 the FTC said it would not keep defending the rule (ADA News via TDA). That leaves state law in charge, and states vary widely.
Why it matters: for a freelancer, your next client is often in the same industry as your last one. A broad non-compete can quietly shut you out of your own market.
What to ask for: delete it if you can. If the client needs protection, offer a narrow non-solicitation clause instead. You agree not to poach the client's own customers or staff for a short, defined period, rather than staying out of a whole industry.
Your 60-second pre-signing checklist
- There's a specific payment due date, ideally 30 days or less.
- The deliverables are listed, and there's a process for extra work.
- Revisions are capped at a set number of rounds.
- Ownership transfers only after full payment, and you keep portfolio rights.
- You get paid for completed work if the client cancels, plus a kill fee.
- Your liability is capped, and the indemnity covers only your own breaches.
- There's no broad non-compete.
Check your contract in 30 seconds
Reading every clause carefully takes time, and the risky language is usually buried. ContractCheck scans your contract for all seven of these risk areas, flags what's dangerous, and suggests plain-English rewrites you can send back to the client.
ContractCheck provides general information, not legal advice. For contracts with high stakes or unusual terms, consult a licensed attorney in your state.