A Quick Guide to Contracts and Payments for Freelance OB Crew

Following the well-publicised discussions with Cloudbass over late payments and early results from our late payment survey, we thought it would be helpful to produce a simple overview of contract law with good practice suggestions for members. We hope this will clarify where you stand as a freelancer. These guidelines emphasise the importance of clear agreements, prompt invoicing, and proactive follow-up on payments to help with your financial stability and legal protection.

The Nature of Contracts: Freelance payment terms are terms and conditions you include in your contract to ensure you get paid how and when you want. Your payment terms should be included in your overall contract and agreed upon by every client before you start working with them.

A freelance contract is a legal agreement for services in exchange for pay.

Contracts can be verbal or written, though written contracts are easier to enforce.

Written contracts can be established through various forms of communication such as letters, emails, WhatsApp, or text messages.

Changes or cancellations to a contract must be mutually agreed upon or outlined within the contract.

Essential Components:

A contract must specify the services to be delivered, the time and location, and payment details. It may also include provisions for cancellation, amendments, payment terms, and intellectual property rights.

Payments and the 30 Days Rule

Contractual Basis:

Payment and any agreed expenses should be detailed in a contract.

30-Day Payment Rule:

If no payment terms are agreed upon in advance, payment must be made within 30 days of submitting the invoice.

This rule does not apply if other terms are agreed upon beforehand.

Company Payment Terms:

Acceptance of a company’s payment terms is implied if these terms are well-known and publicized (e.g., EMG’s twice-monthly payment dates) and not modified.

Invoice Payment Terms:

Terms stated on an invoice are enforceable only if no other terms were pre-agreed.

Late Payment Fees and Interest:

Late payment fees and interest can be charged if payment is delayed beyond the agreed terms or 30 days if none are specified.

Agree Payment Terms:

Ensure payment terms are agreed upon when accepting a booking.

Communicate on Late Payments:

If payment is delayed, contact the engager immediately, informing them of accruing late payment interest and fees. Use tools like “Don’t Pay Late” for calculations www.dontpaylate.uk

Terms and Conditions:

When Terms Are Undefined:

Send a copy of your terms and conditions when accepting a booking to ensure a record of the agreement.

Drafting Your Terms:

Create terms and conditions covering hours, rates, sickness, payment, out-of-pocket expenses, cancellation, and alteration.

Written Contracts:

Always have a written contract in place before starting work.

For Unpaid Late Invoices Seek Assistance:

Contact Bectu’s Monies Owing department for persistent non-payment issues moniesowed@bectu.org.uk.

For debts up to £10,000, Bectu can guide you through the small claims procedure. Debts over £10,000, Bectu’s legal department may assist with court proceedings.

Our Advice for Members:

Experience in recent years has seen that struggling OB companies preferentially pay those who start court proceedings. So, don’t delay, submit invoices promptly after completing the job and pursue late payments immediately once they become due.

Summary:

•    Agree on Payment Terms: Set clear payment terms in a preferably written contract.

• Create Your Own Terms: Draft and communicate your terms and conditions to clients.
• Prompt Invoicing and Firm Follow-Up: Submit invoices quickly and chase late payments assertively.
• Finally, Choose Clients Wisely: Work with companies that offer acceptable payment terms.
• Keep up to date by checking the HMRC website regularly https://www.gov.uk/invoicing-and-taking-payment-from-customers/payment-obligations

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