Getting Paid: Things for a Freelancer to Think About

Recently, freelancers have been discussing, yet again, being stiffed by clients and how to deal with it. Along with expressions of sympathy from colleagues, several concrete suggestions were given. It isn’t necessary to repeat those suggestions, which were largely based on having a contract, here; rather, I think we should explore more fundamental concepts.

Some editors require a contract for every project; others do not. The primary distinction between the two groups is who is the client  — that is, the former group tends to work directly with authors and individuals, the latter group tends to work with established publishers.

Editors see the contract as a guarantor of payment, until they learn otherwise. Written contracts are useful only if you are prepared to enforce them; otherwise, a handshake is equally as good as a written contract. In truth, the handshake may be even better because the person who will honor the handshake is the person who wouldn’t breach the contract.

But let’s accept that a written contract is a panacea to the ill of having a client try to evade payment (or an editor not do what was he/she was hired for). The question becomes, what should be in the contract?

Usually what is missing is what I consider to be the most important clause of all: the clause that determines the dispute resolution venue, that is, where any dispute that arises must be settled and how it must be settled.

Ever look at the terms and conditions of your credit cards? How about of your mortgage or auto finance loan? Every lender includes these “venue” clauses and we should learn from the specialists. Your contract can include arbitration terms or straight-to-court terms. If arbitration terms are included, think about who you want to arbitrate. Remember that for it to be enforceable, the arbitrator must be independent — it can’t be your best friend, your business partner, your personal attorney.

I prefer the straight-to-court approach, but I don’t want to travel, so I make the venue — on those rare occasions when I use a contract — my local court, in my county, and specifically not the small claims court. In addition, I make sure that the contract states that it is being entered into in my hometown and that my sole place of business is my hometown. This is important for establishing the court’s jurisdiction.

The clause might read something like this:

This contract is entered into in Poughkeepsie, Dutchess County, New York, which is the sole place of business of Freelance Editorial Services, the “editor”.

Any legal action brought to enforce or terminate this contract or any term of this contract must be brought in the Supreme Court of the State of New York located in Poughkeepsie, Dutchess County, New York, which the parties to this contract agree is the proper venue and the court that has jurisdiction over any dispute regarding this contract.

I also include a clause that requires the other party to be responsible for my legal fees and costs should I prevail in any action brought by any party to the agreement to enforce or break the agreement. Importantly, I also include a clause that makes my state law the law that governs the contract. Imagine having to defend your contract based on the laws of another state or country.

Another important clause is the one that sets up service of process for any action brought under the contract. This is especially important for those who deal with nonresidents. No contract is worth anything if it can’t be enforced and it can’t be enforced if a court can’t get jurisdiction over the person. Consequently, I include a clause that says that service of process will be effective if it is served by the usual court-ordered process on the party at the address below the party’s signature and, in the event that such service is unsuccessful,  on the secretary of state for the State of New York as agent for the party.

OK, that covers getting us to court. But is there something else that should be done? Definitely. No matter how you slice it or dice it, the best clause to have in your contract is the copyright clause.

The copyright clause says that the parties agree that you own a copyright interest in the edited version of the manuscript until you are paid in full for your work. Once you are paid in full, your interest automatically expires but until that time, the author agrees that his work cannot be published in any form that includes any of your work and that should it be published, you must be listed as coauthor and are entitled to 100% of any revenues generated, as well as damages of not less than $xxxx for publishing without your consent.

This clause can be your most potent clause, whether in negotiation with the author for payment or in a lawsuit.

These are things to think about. Adding these clauses can protect you, but can also make it difficult to get clients. I am still a firm believer that a written contract is only good for the honest; the dishonest won’t abide by it no matter what. But balm for the soul, which is what a contract is, is sometimes more important than whether it will be effective.

PS: Don’t just write this contract yourself. Hire an attorney to draft a form contract for you. Your specialty is editing, not law; hire the specialist to do the specialist’s work. Just tell the attorney what you want.

PPS: Don’t be surprised if an attorney says, for example, the copyright law doesn’t say you have an interest. The reality is a contract can contain any terms the parties agree to; whether a court will enforce those terms can only be determined by a court when challenged, so put the clause in anyway. Until the U.S. Supreme Court rules definitively and clearly on a matter, all else is conjecture.