Freelance T&M contract: the key clauses to include
Time-and-materials freelance contract: key clauses to include (intellectual property, billing, liability, compliance) to secure your engagements.
Time-and-materials engagements have become the norm in the digital and SaaS industry. They allow a company to benefit from a freelancer’s expertise for a defined period, without entering into an employment relationship.
The concept seems simple, but T&M agreements include several legal specifics that must be handled carefully — especially around intellectual property, billing, liability and compliance.
A T&M contract is based on time spent and resources provided, not on a commitment to deliver a specific result. The freelancer is paid on a daily rate (TJM), for a defined volume of work. The company retains control over the project direction, while the freelancer performs the work independently.
This distinction matters: the freelancer must not be treated as an employee, they must maintain control over their working methods, and the mission must be clearly framed in terms of scope and duration.
In the digital sector, intellectual property is often the most valuable asset. By default, the freelancer owns the rights to any creation, unless those rights are explicitly assigned to the client.
If the mission involves producing deliverables — code, designs, documents, content — the contract must include a valid IP assignment clause compliant with French IP Code requirements: rights assigned, territory, duration, authorised uses, and the associated remuneration. Without these elements, the assignment is null and void. For further detail on IP assignment clauses, see the article on software development contract clauses.
Since the freelancer is paid for actual time spent, the contract must describe how time will be tracked, how often it must be validated, and how invoices will be issued. A practical rule is that validated timesheets are binding, unless challenged within a short timeframe (e.g. five business days).
In a T&M model, the freelancer is responsible only for the quality of their work, not for the overall project outcome. The freelancer remains liable for their own professional faults. Liability is often capped at the total amount invoiced for the mission.
Billing provisions should be clear: daily rate, payment terms (often 30 days net), late payment penalties, and fixed compensation for recovery costs. The contract may also define when the freelancer may suspend work in case of unpaid invoices.
When a company works regularly with the same freelancer, a master services agreement (MSA) is extremely useful. The MSA sets the legal framework, while each assignment is defined in a separate statement of work. This approach is particularly suited to startups and tech companies.
The contract should require the freelancer to provide proof of registration, an up-to-date social security certificate, and a declaration confirming compliance with tax and social obligations. For long-term engagements, these documents must be renewed every six months.
Place of work (remote, on-site, hybrid), equipment and access provided, and confidentiality of information accessed during the mission.
For an overview of the key contractual provisions, see the SaaS contracting guide. If the engagement involves a developer, see also the article on contracts with IT developers.
A T&M contract does not need to be complex, but it must be precise and balanced. A few well-drafted clauses are enough to secure the relationship and avoid the most common pitfalls. If you need to draft or review a T&M contract, book a call.
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I have been supporting software and SaaS companies for over 10 years, helping them structure their business, protect their intellectual property and strengthen their contracts.
