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Chapter
2

The difference between an SOW and a consultant contract

There are many positive reasons to adopt a consistent approach to client contracts, and some of them might surprise you:

  • Having consistent, intentional practice with client contracts is good for your brand as a freelancer.

  • Having an agreement ready to send your clients makes it easy for them to hire you again: they know to expect professionalism, transparency, and clarity. It gives them a strong reason to prefer working with you over your competitor. 

  • Having an agreement on-hand can save you time in competitive bidding and can even make you available for more work (since you’ll be able to save time with the project paperwork).

We’ve given you a taste of the practical benefits of applying contracting best practices in your freelance business–but now let’s turn to the more substantive benefits to you, and to your client. As you’re reading, take some time to reflect on your previous experiences working through contracts with clients–those insights will be some of the building blocks for the freelancer contract you’re going to develop.‍

Freeelancer contract vs Statement of Work

We wanted to make sure it’s clear up front how a freelancer contract differs from a Statement of Work (SOW). We’ll also clarify the role of a Letter of Intent in the contracting process.

A Statement of Work (SOW) is itself a legally binding agreement in which the party requesting the work specifies project details, quality acceptance criteria, and outputs for deliverables. These can exist alongside your contract.

Make sure you cover any areas of concern that arise in an SOW in your contract and make sure you know where you’re giving up flexibility by not negotiating on certain points (and don’t worry, we’ll show you where some of these can arise in the following steps).

A freelancer contract is a legally binding document that specifies the terms and conditions of a freelance project between the freelancer and client. A Letter of Intent, on the other hand, is not a legally binding document and simply states the intention of both the freelancer and client to work together on a project.

Take a few minutes and write out what each of these means in your own words in your workbook. This way, if a client or another freelancer ever has a question about one of the terms in the contract, you can feel confident answering their question and talking them through your contract. Do this after you encounter any new terms throughout this playbook.

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