The 3 essential contracts every sole trader needs

When you pictured becoming a sole trader, you probably imagined energizing client meetings, working from the beach and the occasional flashy award dinner.

Here’s the thing. None of that happens without one crucial piece in place.

Contracts.

While you’re out enjoying client lunches, it's your contracts doing the heavy lifting. Protecting your time, safeguarding your income and helping you run your business on your terms.

You wouldn’t build a house without a blueprint, so why build your freelance business without a contract?

In this article, we’ll break down the three essential contracts every freelancer or sole trader needs.

1. Client services agreement

The project you delivered is perfect.

You poured in extra hours (that weren’t budgeted for) believing your client would recognize the effort and pay what you deserve.

But a week later, the invoice lands, and the client refuses to pay for the out-of-scope work.

All that hard work feels wasted and frustration sinks deep.

This is the harsh reality many freelancers face when they don’t have the right contracts in place. Without clear agreements, good intentions alone won’t protect your time, your income or your peace of mind.

That’s why a solid client services agreement is essential.

Also called a freelance agreement, a client services agreement sets out exactly what you’re delivering, how you'll work and what’s not included (so you have the right to decline any additional work).

It’s a formal agreement that can be upheld in court, ensuring both you and your client are protected if either party fails to meet their side of the deal.

Here are some clauses to include in your next client services agreement:

• Scope of work and how changes are handled
• Payment terms and late fees
• Timelines and deliverables
• Intellectual property rights
• A clause for charging more if the project expands unexpectedly

Tip: Writing your first client services agreement? Use AgreementGen to generate a client agreement in minutes. The built-in AI helps you create custom clauses tailored to your project. Try it for free.

2. Non-disclosure agreement (NDA)

The last thing a client wants is for you to run off with their blockbuster business idea.

This is where a non-disclosure agreement (often called an NDA) comes in.

As a freelancer or sole trader, you’ll often be asked to sign one before a client shares anything confidential with you. They’re trusting you with their intellectual property (IP), which could include trade secrets, new product ideas, business strategies, internal data or anything they’re not ready to make public.

But here’s the part most people overlook: NDAs can protect freelancers and sole traders, too.

If you’re sharing your own creative processes, pricing models, or unique ideas with a client, you can ask for a mutual NDA to make sure the client doesn’t walk away with your hard work.

Use an NDA when:

• You're given access to confidential product info, data or internal systems
• You’re pitching a new business idea you don’t want shared
• The product or service hasn’t been released to the public yet

Learn more in our guide to NDAs for small businesses.

Tip: Try our free NDA generator to craft a tailored agreement that protects both you and your client. .

3. Retainer agreement

Freelancing can be an emotional rollercoaster. One month you’re flush with work, the next you're nervously checking your inbox.

Retainer agreements bring some stability to the chaos by locking in recurring income and long-term client relationships.

A retainer agreement outlines the work you’ll complete over a set timeframe, usually on a month-to-month basis. The work could be weekly deliverables, a set number of tasks or ongoing support.

Knowing what you need to do each month helps you plan your workload effectively. Plus, retainer agreements often lead to longer-term client relationships, building trust and opening the door to even more work down the line.

What to include in a retainer agreement:

• The number of hours or deliverables covered
• Project or hourly rate
• Whether unused time rolls over (or not)
• Priority access or turnaround times
• Review checkpoints (e.g. every 3 or 6 months)

Tip: Don’t leave your cash flow to chance. Suggest a retainer agreement at your next client meeting and set yourself up for ongoing success.

Contracts don’t have to be a headache

Writing contracts can feel overwhelming, especially if you're just getting started.

That’s why we built AgreementGen: so sole traders and freelancers can generate professional contracts fast, using built-in AI suggestions. Write your prompt, customize your clauses and send it for signatures in minutes.