Top Red Flags to Watch for in New Client Agreements

You’ve landed a new client, cue the celebration. But before you dive into the work, there’s one crucial step between excitement and execution: the agreement.

A solid client agreement isn’t just about legalese. It’s the blueprint for how you’ll work together, what’s expected, how you get paid, and how everyone stays protected. But sometimes, that seemingly innocent contract contains hidden landmines.

Here are the top red flags to look for in new client agreements to enhance the client experience, plus how to spot them, what they really mean, and what to do about them.

1. Vague Scope of Work

Why it’s a red flag:
If your agreement doesn’t clearly define what you’re delivering, when, and how, you’re setting yourself up for scope creep, confusion, and endless revisions.

What to watch for:

• Terms like “as needed,” “ongoing support,” or “help with marketing.”
• No mention of deliverables, milestones, or timelines.

What to do:
Request a detailed scope that outlines exactly what’s included (and what’s not). For extra protection, build in hourly or project-based add-ons for anything outside of that scope.

2. Ambiguous Payment Terms

Why it’s a red flag:
If it’s unclear when or how you’ll be paid, your bank account could suffer. And if there’s no mention of late fees or what happens if they ghost you, guess who’s stuck chasing payments?

What to watch for:

• No due dates for invoices.
• No mention of payment method.
• “Upon project completion” with no milestones defined.

What to do:
Clarify payment schedules (e.g., 50% upfront, 50% upon delivery), add due dates, and include language about late fees, auto-reminders, and interest charges.

3. “Work Made for Hire” Language (Without Clarification)

Why it’s a red flag:
If the contract says all your work is “work made for hire” and you don’t understand what that means, you could be signing away your rights, including the ability to use your own work in your portfolio.

What to watch for:

• “All work is considered work made for hire” without conditions.
• No mention of licensing or portfolio usage.

What to do:
If you're okay with the client owning everything, fine, but be sure you’re compensated accordingly. Otherwise, negotiate for shared rights, licensing terms, or portfolio usage permissions.

4. Unreasonable Revisions or Approvals

Why it’s a red flag:
If a client expects infinite revisions or takes weeks to review work, you could find your timeline (and sanity) unraveling.

What to watch for:

• No limit on revision rounds.
• No approval deadlines or response times.

What to do:
Set boundaries: limit revisions to 1–2 rounds, define how long the client has to approve something, and what happens if they don’t respond.

5. No Termination Clause

Why it’s a red flag:
Life happens. If either party wants to end the agreement, you need a clear exit strategy.

What to watch for:

• No mention of how to cancel the agreement.
• No details on payment obligations for work already completed.

What to do:
Include a mutual termination clause with notice requirements (e.g., 14 days), pro-rated payments, and the return of materials or data.

6. Non-Compete or Exclusivity Clauses

Why it’s a red flag:
Some clients ask freelancers not to work with “competitors,” but without clear definition or duration, it can severely limit your income.

What to watch for:

• Broad non-compete language (“you may not work with any businesses in X industry”).
• Exclusivity clauses with no end date.

What to do:
Negotiate to narrow the scope and limit the clause by geography, type of work, or time (e.g., 3–6 months).

7. Indemnity Clauses That Only Protect the Client

Why it’s a red flag:
If something goes wrong (e.g., a lawsuit, security issue, or IP claim), indemnity clauses can dictate who is responsible for damages.

What to watch for:

• Language requiring you to fully indemnify the client without reciprocity.
• No mention of mutual liability.

What to do:
Ask for a mutual indemnity clause that fairly protects both sides.

8. Broad Confidentiality Clauses

Why it’s a red flag:
Confidentiality makes sense, but if it’s written too broadly, you might be banned from indefinitely talking about your own work.

What to watch for:

• NDA terms that last forever.
• Language that prevents you from listing the client as a reference.

What to do:
Negotiate for realistic timelines (e.g., 1–2 years) and portfolio usage exemptions.

9. Ownership of Tools, Templates, or Pre-Existing Materials

Why it’s a red flag:
You likely use frameworks, templates, or assets across multiple clients. If the contract claims ownership over everything you use, you’re giving away more than just this project.

What to watch for:

• “All materials used become property of the client.”
• No differentiation between new and pre-existing assets.

What to do:
Add language that states pre-existing materials remain your property, and you grant a license for their use in this project only.

10. No Dispute Resolution Plan

Why it’s a red flag:
If there’s no mention of how to resolve issues, a small disagreement can escalate fast (and expensively).

What to watch for:

• No section covering disputes or jurisdiction.
• Terms that require arbitration only in the client’s city/state.

What to do:
Add fair terms about mediation or arbitration, ideally in your local jurisdiction or remotely.

Trust Your Gut, Don’t Sign Just to Start

Even if a contract looks legally airtight, your gut might still say, “ehhh…” Listen to it. If the client feels sketchy, controlling, disorganized, or oddly resistant to fair adjustments, that’s a red flag, too.

Freelancers are often so eager to get started (or paid), they’ll sign anything just to move forward. But your contract isn’t just paperwork, it’s protection.

It sets the tone for how the relationship unfolds. And the good news? If a client is willing to sign a solid, fair agreement, they’re more likely to respect your time, boundaries, and expertise.

Red Flags in New Client Agreements

• Vague deliverables = future scope creep.
• Undefined payment terms = delayed income.
• Unlimited revisions = recipe for burnout.
• No termination clause = trapped.
• One-sided ownership or indemnity = risk exposure.
• Overreaching NDAs = no portfolio freedom.
• Broad non-competes = lost income opportunities.
• No dispute plan = costly messes.

Protect your business like the boss you are.

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