What to Include in a Time-and-Materials Freelance Contract?
Time-and-Materials freelance contract: key clauses to include (intellectual property, billing, responsibility, compliance)
Time-and-materials (“T&M”) 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 of time, 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.
Below is a clear guide to the essential clauses you should include.
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 because:
A clear contract is therefore essential to avoid any requalification risk and to secure the commercial relationship.
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 transferred to the client.
If the mission involves producing deliverables—code, designs, documents, content, or any creative work—the contract must include a valid IP assignment clause, compliant with French IP Code requirements.
It must specify:
Without these elements, the assignment is null and void—a common and risky oversight that may lead to disputes about ownership of the deliverables.
Since the freelancer is paid for actual time spent, the contract must describe:
A practical rule is to state that validated timesheets are binding, unless challenged within a short timeframe (e.g., five business days).
This avoids endless arguments at invoicing time.
In a T&M model, the freelancer is responsible only for the quality of their work, not for the overall project outcome.
Only the client controls the project’s success.
The contract should say explicitly:
“The freelancer is bound by an obligation of means, not an obligation of result.”
The freelancer remains liable for their own professional faults (e.g., gross error, security breach, failure to follow instructions).
To avoid excessive exposure, liability is often capped at the total amount invoiced for the mission.
This cap is essential for freelancers and is generally acceptable in B2B relationships, provided it is proportionate to the mission’s stakes.
Billing provisions should be clear and practical:
The contract may also define when the freelancer may suspend work in case of unpaid invoices—an important safeguard.
When a company works regularly with the same freelancer (or with several freelancers through the same provider), an MSA is extremely useful.
The MSA sets the legal framework, while each assignment is defined in a separate statement of work (SOW) or mission order.
This approach lets you:
Startups and tech companies rely heavily on this structure because it simplifies both legal and operational processes.
Companies in France have an obligation to verify that their contractors comply with social and tax rules.
The contract should therefore require the freelancer to provide:
For long missions, these documents must be renewed every six months.
This is not optional—it’s a legal compliance requirement and a core protection against illegal work.
A solid T&M contract should also clarify:
Remote, on-site, or hybrid, with any specific constraints.
Who provides laptops, software licences, VPN, internal systems, etc.
A strict obligation of confidentiality covering all information accessed during the mission.
Prevents the client from hiring the freelancer directly or poaching other collaborators.
These operational clauses often prevent the most common disputes.
A T&M contract doesn’t need to be complex.
But it must be clear, structured and thorough.
A few well-drafted clauses are enough to avoid recurring issues such as:
For ongoing collaborations, a master contract brings even more clarity and efficiency.
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I have been supporting software and SaaS companies for more than 10 years, to structure their business, protect their intellectual property and improve their contracts.
