How to Spot Red Flags in Freelance Contracts

Freelance and gig contracts often look standard—a few pages of scope, payment, and deadlines. But hidden clauses can leave you underpaid, overcommitted, or without rights to your own work. If you don't read carefully, you might agree to get paid months after you finish, to hand over all your ideas to the client, or to be on the hook for unlimited liability if something goes wrong. Here's what to watch for in payment, intellectual property, confidentiality, termination, and liability—and how to spot red flags before you sign.

Payment and timing

When and how you get paid is one of the most important parts of a freelance contract. Vague or one-sided payment terms can leave you waiting months or fighting over "acceptance." Here's what to check.

Net-60 or net-90 payment terms

You finish the work today but get paid 60 or 90 days after you invoice. That can strain your cash flow—especially if you're doing a large project or working with a client who is slow to pay. Net 30 is common and reasonable; net 60 or 90 is slow. Look for "net 30" or better (e.g. net 15, or payment within X days of delivery). If the client insists on net 60 or 90, push back—or at least negotiate a partial upfront payment (e.g. 30% on signing, 70% on delivery) so you're not funding the whole project out of pocket.

Payment on "acceptance" or "approval"

Payment is due when the client "accepts" or "approves" the work. The problem is that acceptance can be vague or subjective. If the client never formally "accepts," or keeps asking for "small tweaks" that delay acceptance, you can wait indefinitely. Prefer "payment within X days of invoice" or "payment within X days of delivery"—so the clock starts when you send the invoice or deliver the work, not when the client decides they're happy. If they insist on "on acceptance," ask for a clear definition (e.g. "acceptance occurs 7 days after delivery unless the client provides written feedback") and a deadline. Without that, you're at their mercy.

Kill fees or cancellation

If the client cancels the project mid-way, do you get anything? Some contracts say you get nothing—or only for "approved" work, which may be little. Look for a cancellation or kill-fee clause: if the client terminates early, they pay for work done to date, or a percentage of the total fee, or a minimum fee. That protects you from investing weeks of work only to have the client walk away with no obligation to pay.

Intellectual property and confidentiality

Who owns the work you create, and what can you say about the project? Broad IP or confidentiality clauses can trap you—you might hand over rights to ideas you had before the project, or be unable to mention the project in your portfolio. Here's what to watch for.

Broad IP assignment

Some contracts say that all ideas, drafts, "background IP," and "all work product" belong to the client—including work that isn't part of the final deliverable. That can mean you're giving up rights to your own methods, tools, or pre-existing work that you use in the project. Narrow this to "deliverables" or "work made for hire" for the project only—i.e. the specific outputs you're contracted to produce. Push back on "all ideas" or "background IP" that would give the client rights to your general skills or pre-existing IP. If they won't narrow it, understand the risk: you might not be able to reuse your own templates or methods for other clients.

Unlimited confidentiality

"All information disclosed" or "all information you receive in connection with the project" can make almost anything "confidential." That can trap you from using general skills, mentioning you did the project in your portfolio, or discussing the type of work you do with future clients. Prefer time-limited, scope-limited NDAs: for example, confidentiality for 2 years after the project ends, and only for information that is clearly marked "confidential" or that would be obvious to a reasonable person. If the contract says you can't mention the project at all—even in a general way ("I built a mobile app for a fintech client")—push back. You need to be able to describe your experience to get the next job.

Termination and liability

What happens if either side wants to end the relationship early? And what are you on the hook for if something goes wrong? One-sided termination or uncapped liability can put you in a bad position.

One-sided termination

The client can end the contract "at any time" with little or no notice—but you're locked in. You might have to give 30 days' notice, or complete the project, or face a penalty if you leave early. That's unfair: if they can walk away anytime, you should have a similar right (or at least a reasonable notice period). Look for mutual notice periods—e.g. either side can terminate with 14 or 30 days' notice. If the client can terminate immediately but you can't, push back or add a clause that you can terminate with X days' notice and get paid for work done to date.

Uncapped liability or indemnity

You could be on the hook for more than you're paid. Some contracts say you will "indemnify and hold harmless" the client for any claims, damages, or costs arising from your work—with no cap. So if the client is sued because of something you did (or allegedly did), you might have to reimburse them for all damages and legal fees. That could be hundreds of thousands of dollars. Look for liability caps—e.g. your total liability is limited to the amount you were paid under the contract, or to a fixed sum. Indemnity should be narrow: you indemnify for your breach of the agreement (e.g. IP infringement, confidentiality breach) or your negligence—not for the client's use of the work or the client's own decisions. Push back on broad, uncapped clauses. If they won't cap it, understand the risk and consider getting advice.

Using a tool like BeforeYouSign helps you spot these clauses quickly and decide what to negotiate before signing.