Most freelancers and agencies sign the client’s paper. That is fine — client templates are negotiable far more often than people assume — but only if you know where the recurring traps sit, and which of them the law already softens for you.
These five come up constantly. Two of them have statutory answers most freelancers never invoke.
1. The IP clause that takes your toolbox
“All intellectual property used in or arising from the Services is hereby assigned to the Client” captures more than the deliverable. It reaches your pre-existing frameworks, your code snippets, your templates and your process — the tools you need for every future client.
Start from the default position, because it is better than most freelancers realise. Under section 11 of the Copyright, Designs and Patents Act 1988, “the author of a work is the first owner of any copyright in it”, subject to the exception for a work made by an employee “in the course of his employment”. A freelancer is not an employee. Absent an assignment, you own what you made.
Which is why the assignment clause is doing all the work, and why its formalities matter. Section 90(3) provides that an assignment of copyright “is not effective unless it is in writing signed by or on behalf of the assignor”. A promise in an email chain does not transfer copyright; a signed contract does. If the agreement assigns everything, that is the moment your background IP leaves.
Market standard is a split, and it is easy to ask for: the client owns the new deliverable IP; your background IP is licensed to them, perpetually and irrevocably if they need that, but not assigned. Define background IP as a schedule rather than by adjective, so nobody argues about it later.
2. Uncapped indemnity against a token cap
Look for the asymmetry rather than the numbers. You indemnify the client for “all losses, including indirect and consequential loss”, while their liability to you is capped at one month’s fees. Two clauses, two pages apart, and neither reads alarming on its own.
English law offers a check here, though it is narrower than it sounds. Section 3 of the Unfair Contract Terms Act 1977 applies “as between contracting parties where one of them deals … on the other’s written standard terms of business” — which is exactly the position when you sign the client’s template unamended. Where it applies, the client cannot rely on a term excluding or restricting its liability for breach, or claiming to render a substantially different performance, except so far as the term satisfies “the requirement of reasonableness”.
Section 11 then fixes the moment of judgment: reasonableness is assessed by reference to the circumstances “which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made” — not by how the dispute turned out. So the control is real, but it is a litigation remedy about the state of play at signature. Never rely on a statute to fix what an email could have fixed. Ask for mutual caps, mutual exclusion of consequential loss, and a carve-out from the cap only for the things that genuinely warrant one.
3. Payment terms measured in seasons
Sixty days. Ninety. Occasionally a hundred and twenty. This is the trap with the strongest statutory answer, and the one freelancers least often use.
Under section 4 of the Late Payment of Commercial Debts (Interest) Act 1998, where the purchaser is not a public authority and “the last day of the relevant 60-day period falls earlier than the agreed payment day”, the relevant day for statutory interest becomes the last day of that 60-day period. There is a proviso — that displacement does not apply “if the agreed payment day is not grossly unfair to the supplier” — but note which way round it runs. The 60-day rule is the default; the longer term has to earn its place.
Two further provisions are worth knowing by heart:
You cannot be contracted out of it casually. Section 8(1): “Any contract terms are void to the extent that they purport to exclude the right to statutory interest in relation to the debt, unless there is a substantial contractual remedy for late payment of the debt.” A clause substituting a derisory rate is not an agreement; it is void to that extent.
There is a fixed sum on top of interest. Section 5A entitles the supplier to a fixed sum for the cost of recovering a late debt — £40 for a debt under £1,000, £70 for £1,000 to under £10,000, and £100 for £10,000 or more. And if “the reasonable costs of the supplier in recovering the debt are not met by the fixed sum”, the supplier is entitled to the difference. Most freelancers never claim this.
One point of accuracy, because it is misquoted everywhere including by people who should know: the 8% figure is not in the Act. The rate is set by the Late Payment of Commercial Debts (Rate of Interest) (No 3) Order 2002, SI 2002/1675, at 8 per cent per annum over the “official dealing rate”. If you are going to put a statutory reference in a chasing letter, put the right one in.
4. Termination for their convenience, not yours
“The Client may terminate at any time on five days’ notice” — with no reciprocal right, and no payment for work in progress — leaves you carrying all of the scheduling risk while they carry none. You have turned down other work to hold the slot; they can release it without cost.
This one has no statutory answer in a business-to-business contract. It is pure negotiation, and there are three asks in ascending order of ambition: a reciprocal right on the same notice; a longer notice period tied to the length of the engagement; or a kill fee covering committed and irrevocably scheduled work. Ask for the third and settle for the first, but do not sign a one-sided convenience right without pricing it.
5. The non-compete that eats your market
A restraint barring you from serving “any competitor of the Client” for two years can remove a specialist’s entire client base. English law is not indifferent to that — but the way it intervenes should not comfort you.
Tillman v Egon Zehnder Ltd [2019] UKSC 32 concerned a covenant against being “directly or indirectly engage[d] or be concerned or interested in any business carried on in competition” with the employer. The words “or interested” would have prevented even a minority shareholding, which made the covenant an unreasonable restraint of trade. The Supreme Court held those words could be severed under the blue-pencil test — “the unenforceable provision is capable of being removed without the necessity of adding to or modifying the wording of what remains” — and concluded that the court should “formally restore the injunction granted by Mann J, subject only to the removal of the words ‘or interested'”.
Read that as a warning rather than a rescue. The over-wide covenant was not struck down; it was trimmed and enforced. Lord Wilson closed with a passage worth quoting to anyone who thinks an aggressive restraint is free: a deputy judge had described the unreasonable parts of post-employment restrictions “to which employers extract the agreement of prospective employees” as “legal litter” which “cast an unfair burden on others to clear them up”. Lord Wilson called it a neat metaphor, and added: “In my view the company should win … but there might be a sting in the tail” — the sting being costs.
So the safest restraint remains the one you narrowed before signing: named clients rather than a market, a defined period, a defined scope. Do not sign something unreasonable in the belief a court will simply delete it, because Tillman shows the deletion may leave a covenant that still binds you.
The pattern
None of these clauses announces itself. Each reads as boilerplate until the dispute, and by then the leverage has gone. Two of them — the payment terms and the standard-terms exclusion — have statutory answers you can invoke without a lawyer, provided you know they exist. Two of them are pure negotiation. And one, the IP clause, turns entirely on a default rule that favours you until you sign it away in writing.
Fifteen minutes of review before signature is the cheapest insurance a freelancer can buy. The engagement usually opens with an NDA, and most NDAs carry at least one of four defects of their own.
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This article is general information, not legal advice. No solicitor/attorney–client relationship is created by reading it. For advice on your situation, consult a licensed practitioner in your jurisdiction.
