Episode Overview
Do you really need a contract as a freelance fashion designer? What should your contract include? On this episode of the SFD Podcast, you’ll hear from small business attorney Andrea Sager on contracts, design ownership, payment disputes, and the best ways to protect yourself and your assets when you’re freelancing in fashion.
Disclaimer: All advice in this episode is general information, and may not be correct for your specific location and circumstances. Always consult with your own attorney on any and all legal matters.
Episode Highlights
Introduction to the Episode
- Heidi welcomes listeners and introduces Andrea Sager, mentioning the focus on protecting freelancers in the fashion industry, particularly through contracts, nondisclosure agreements, and payment protection.
Andrea’s Background and Services
- Andrea Sager discusses her background as a small business attorney, her shift from a big law firm to serving entrepreneurs, and her dedication to offering affordable and predictable legal services.
Setting Up as a Freelancer
- Discussion on the importance of setting up as an LLC for protection, and whether to operate as a sole proprietor or under an LLC. Andrea emphasizes the legal protections LLC provides.
Contracts and Liability
- Covers the importance of having contracts, outlining liability, ownership rights, and avoiding verbal agreements. Andrea explains how contracts can protect both the freelancer and the brand.
Ownership of Designs and Payment Terms
- Talks about who owns the design and the implications of assigning rights to the brand. Discusses the importance of clearly defining payment terms in the contract to ensure freelancers get paid even if the client is unhappy with the work.
Payment Collection and Default Actions
- Heidi and Andrea explore the nuances of payment collection, including the best practices for setting payment terms, late fees, and the steps to take if you don’t get paid.
Nondisclosure Agreements (NDAs)
- Andrea explains NDAs, the different types (one-sided vs. mutual), their practical implications, and how freelancers should approach them. She also offers a candid opinion on their enforceability.
Using Work in Portfolios
- Discusses what freelancers can include in their portfolios, emphasizing best practices and default ownership scenarios when there’s no signed contract.
Practical Advice and Insurance
- Andrea advises on getting general liability insurance and emphasizes the importance of protecting oneself legally, while also providing encouragement not to be paralyzed by the legal complexities.
Resources and Contact Information
- Andrea provides her contact information, detailing her Instagram, Facebook, and website, and explains her legalpreneur membership which offers document review, email consultations, and other services for a fixed monthly fee.
Key Questions and Responses
1. How should I set myself up when starting my freelance career in fashion? Should I be a sole proprietor or an LLC?
- Andrea suggests filing as an LLC from the beginning because it provides significant protection compared to being a sole proprietor. The LLC limits liability to business assets, so personal assets are protected. She acknowledges there are fees but emphasizes the protection it offers against unforeseen circumstances.
2. What should be included in a contract for freelance work?
- A contract is crucial and should specify ownership rights, payment terms, and liability. Ownership rights determine whether the freelancer retains or assigns rights to their designs. Liability clauses should cover indemnification in case of copyright infringement or product issues. Payment terms should ensure timely payment and include late fees. It is also advisable to agree on who bears attorney fees in case of disputes.
3. How do I handle payment terms and ensure I get paid?
- Andrea advises asking for payment upfront if possible. If not feasible, implement clear payment schedules with late fees. Include clauses that place the responsibility of attorney fees on the brand if payment disputes arise. She emphasizes not letting payment depend on the client’s satisfaction with the work produced.
4. What should I do if my client asks me to sign a nondisclosure agreement (NDA)?
- Andrea explains that NDAs can be one-sided or mutual and are mainly used as a threat to deter sharing confidential information. She suggests asking the client to specify what constitutes confidential information. In many cases, especially with startups, what they regard as confidential might not be legally protected. If unsure, trust your gut feeling and don’t hesitate to ask for clarification.
5. Can I use the work I create for clients in my portfolio?
- Andrea says it depends on what is stipulated in the contract. By default, if there is no contract or it’s not specifically stated, the freelancer retains ownership of their designs and can include them in their portfolio, ideally after the products are on the market to avoid damaging reputations.
6. What if I don’t have a contract and don’t get paid?
- She suggests that even without a formal contract, email communications can serve as an agreement. If payment issues arise, freelancers can send a demand letter through an attorney, check for state protections, and consider small claims court. The state’s default provisions will apply, which may not always favor the freelancer, thus highlighting the importance of having a contract.
7. How can freelancers protect themselves without incurring high legal fees?
- Andrea recommends getting general liability insurance as an affordable way to protect against unforeseen business liabilities. She also mentions practical steps like asking for payment upfront and making sure to have clear, written agreements even if they aren’t formal contracts, as emails can also offer some legal protection.
About Andrea:
Andrea Sager used to work for a big corporate firm, but she left when she realized that small business owners need and deserve quality legal advice just as much as huge companies, but needed that advice to be affordable. She now exclusively serves small businesses and freelancers, helping them protect themselves and navigate the tricky legal landscape!
Resources & People Mentioned
- Free resources for SFD Podcast listeners!
- Andrea Sager Law on Instagram
- Anrea’s Legalpreneur membership–save with code SEWHEIDI at checkout!