Advance, milestones, and client cancellation: gaps in a contract with a freelancer

Most disputes with a freelancer start not with “bad design” but with gaps in the money: there is no advance, the milestones are blurred, acceptance is “if we like it,” and the client’s cancellation does not cost a kopeck. Until work has started, this is still contract text. After the first layout, it is already a cash risk for both parties.

The advance: not a “symbol,” but a condition of starting

The advance closes a simple risk: the contractor has already spent time, and the client is “still thinking.” In the contract it is worth tying three things together explicitly: the amount, the payment deadline, and the moment work starts.

• A percent or a fixed sum (often 30–50% on long projects)
• The deadline for paying the advance, and a right not to start work until the money arrives
• Whether it is refundable: the advance is credited against milestones, or it is non-refundable if the client cancels without the contractor’s fault
• Payment details and the payment method — without “I’ll send it to the card later”

Milestones: payment tied to a result, not to “the month”

Blurred milestones (“design,” “revisions,” “final”) give the client an endless cycle of edits with no payment. It is better to split the work by deliverable artifacts and to fix a sum for each.

What to write in for each milestone

• A description of the result (a layout, a text draft, a working build, final files)
• The delivery deadline and the acceptance period (for example, 3–5 business days)
• The milestone sum and the payment deadline after acceptance, or on delivery
• What counts as silent acceptance if there are no comments
• A cap on free revision rounds for the milestone

Client cancellation and a kill fee

A unilateral exit by the client “just because,” with no compensation, is a classic gap. A kill fee (a cancellation charge, or compensation for work already done) reduces the temptation to drop the project halfway.

• The client’s right to cancel, with N days’ notice
• Payment for milestones actually completed, plus a percent for the milestone that is not closed
• Or a fixed kill fee (for example, 20–30% of the remaining sum)
• The deadline for paying the compensation after the cancellation notice
• What happens to intermediate materials: handover only after payment

Separately, record the contractor’s cancellation: when the contractor may exit (late payment, downtime of more than N days) and whether the right to payment for work done is kept.

Rights to the result before full payment

If exclusive rights “pass from the moment of creation” and the money has not arrived yet, the contractor gives the asset away for free. A working scheme for freelance work:

• Rights pass after full payment for the relevant milestone (or for the whole contract)
• Before payment — a license to view and for internal use, with no publication and no resale
• Source files, passwords, and access — after payment of the final
• A ban on the client using the result if payment is overdue by more than N days

Acceptance: criteria, not taste

“I don’t like it” is not a criterion. Tie acceptance to the brief, the statement of work, the references, and a checklist. Otherwise the milestone never closes.

1. Delivery by the channel in the contract (email, a drive, EDO), with the date recorded
2. A period for reasoned comments — otherwise acceptance is deemed to have taken place
3. Comments only within the statement of work; a “new wish” is an addendum and extra pay
4. A certificate or an electronic confirmation is the basis for paying the milestone

Checklist before you start

Related reading

• Contracts for freelancers
• How to draft a contract with a self-employed person
• Typical mistakes in contracts
• Hidden clauses in a contract

Short conclusion

In a contract with a freelancer, the money lives in four blocks: the advance, the milestones, acceptance, and the price of cancellation. Rights to the result before payment are a separate lever. Close them before you start — the later dispute then runs on the text, not on “but we agreed.”