Your client contract decides whether you get paid, and who owns the work.
Upload a client or consulting agreement and get payment terms, IP assignment, and misclassification risk checked against Indian law.
What people are surprised to learn
The MSMED Act sets a 45-day payment rule for registered micro and small suppliers.
Where a supplier is Udyam-registered, Sections 15–16 address payment timelines and interest on delay. Whether it applies turns on registration status and other facts we cannot see in a document, so we flag the payment term against the provision and leave the conclusion to you and your advocate.
What this review checks
- MSMED 45-day payment right and interest on delay
- Payment tied to vague “approval” with no deemed acceptance
- Deposit, kill fee, revision caps and scope creep
- Who owns the IP, and the Copyright Act Section 19 formalities
- The five-year assignment lapse where no term is stated
- Contractor vs employee misclassification indicia
- TDS section references and GST treatment
- Post-engagement non-compete and non-solicit
Quick answer
What should I check in a freelance or consulting contract in India before signing?
Check when and how you get paid, including any deposit, milestones and what counts as approval; whether the MSMED Act’s 45-day rule for registered micro and small suppliers could apply; who owns the work and whether the assignment meets the Copyright Act formalities; revision limits and a kill fee; TDS and GST clauses; any non-compete after the project; and whether the terms look more like employment than consultancy.
Who this review is for
- Freelance designers, developers, writers and marketers signing client contracts
- Independent consultants and advisers on retainer agreements
- Indian freelancers working for overseas clients
- Udyam-registered micro and small service businesses
- Businesses engaging consultants who want a clear, fair agreement
How it works
- 1
Upload the agreement
PDF, Word, a photo or pasted text, with its schedules and annexures.
- 2
Choose your State
Stamp duty and, where the work looks like employment, State labour rules vary, so the report tells you exactly what to confirm locally.
- 3
Read the report
Payment, ownership of the work, scope, tax clauses, restraints and classification risk, each explained plainly with the clause quoted.
- 4
Raise the points
A suggested redline and a polite email to the other side, phrased as questions rather than demands.
8 red flags to look for
Payment only on the client’s “final approval”, with no deemed acceptance
Approval can be delayed indefinitely, and for registered suppliers the MSMED payment clock runs from acceptance or deemed acceptance.
Payment terms beyond 45 days when you are Udyam-registered
MSMED Act s.15 and 16 limit the agreed period to 45 days from acceptance or deemed acceptance for registered micro and small suppliers, with interest on delay.
All rights assigned, including drafts, unused concepts and your existing tools
You may lose rights in templates, code libraries or ideas you rely on for other clients.
An assignment that states no duration or territory
Under Copyright Act s.19 it is then deemed to last five years and presumed to cover India only, which may be far less than either side intended.
Unlimited revisions or a vague scope of work
Extra work becomes free work, with no clear point at which the project is finished.
No kill fee or payment for work done if the client cancels
You carry the whole cost of a cancelled project.
A non-compete or industry-wide non-solicit after the project ends
Section 27 of the Contract Act makes restraints of trade void, so it is largely unenforceable, but it can still deter you from taking work.
Fixed hours, exclusivity and close supervision under a “consultant” label
An engagement with employment features may describe employment whatever it is called, which matters to both sides.
Terms explained
- Statement of work (SOW)
- A document setting out the deliverables, timelines and fees for a specific project, often under a master agreement.
- Deemed acceptance
- A clause treating work as accepted if the client does not object within a set time.
- Kill fee
- A payment owed to you if the client cancels the project partway through.
- Assignment of copyright
- A written, signed transfer of rights in the work to the client, governed by Section 19 of the Copyright Act.
- Pre-existing IP
- Tools, code, templates or know-how you owned before the project, which you can license to the client rather than assign.
- Udyam registration
- Registration as a micro, small or medium enterprise, which brings the MSMED Act’s payment protection for micro and small suppliers.
- TDS
- Tax deducted at source from your fee by the client; section numbers changed when the Income-tax Act, 2025 took effect on 1 April 2026.
- Moral rights
- Your rights under Section 57 of the Copyright Act to be credited and to object to distortion of your work, which survive an assignment.
Pricing in India
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Single Review
₹999 one-time
One contract review. No subscription, pay once, use within a year.
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₹2,999 / month
4 reviews / month. For freelancers and contractors with steady client work.
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₹4,999 / month
10 reviews / month for regular reviewers & small teams.
Scale
₹9,999 / month
25 reviews / month for high-volume teams.
Freelance & Consultant FAQs
What should I check in a freelance or consulting contract in India before signing?
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Check when and how you get paid, including any deposit, milestones and what counts as approval; whether the MSMED Act’s 45-day rule for registered micro and small suppliers could apply; who owns the work and whether the assignment meets the Copyright Act formalities; revision limits and a kill fee; TDS and GST clauses; any non-compete after the project; and whether the terms look more like employment than consultancy.
Who owns the work I create for a client in India?
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An independent contractor working under a contract for service generally keeps the copyright in what they create unless it is assigned. Under Section 19 of the Copyright Act, an assignment must be in writing and signed, and should identify the work, the rights, the duration and the territory. Many client contracts go further and claim your drafts or existing tools, so the report flags exactly what you would be handing over.
What happens if my contract assigns copyright without saying for how long?
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Under Section 19(5) of the Copyright Act, an assignment that states no duration is deemed to last five years, and under Section 19(6) one that states no territory is presumed to cover India only. Rights the client does not exercise within one year may lapse unless the assignment says otherwise. Clients usually want these points spelled out, so the report flags assignments that leave them open.
Does the MSMED 45-day payment rule apply to freelancers?
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It can, if you are registered as a micro or small enterprise under Udyam. For a registered supplier, the buyer must pay by the agreed date, which cannot be more than 45 days from acceptance or deemed acceptance, or within 15 days where no date is agreed, with compound interest on delay. Whether it applies to you turns on your registration and other facts, so the report flags the payment term against the rule.
How can I recover a late payment from a client?
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If you are a registered micro or small supplier, the MSMED Act provides a Facilitation Council under Section 18 as a low-cost route to recover delayed payments with interest. Otherwise the usual routes are a legal notice, the dispute clause in your contract, or a civil claim, which is generally subject to a three-year limitation period. The report checks the payment, interest and dispute clauses so you know your route before signing.
My contract mentions Section 194J for TDS. Is that still right?
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The Income-tax Act, 2025 replaced the 1961 Act on 1 April 2026 and renumbered its sections. A contract signed on or after that date that cites old numbers such as 194J or 44ADA is referring to a repealed statute, and the reference should be updated. The report flags outdated references; confirm the current section with your chartered accountant.
Do I charge GST to an overseas client?
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It depends on whether the supply qualifies as an export of services under Section 2(6) of the IGST Act. Among other conditions, the client and the place of supply must be outside India, and payment must be received in convertible foreign exchange, or in rupees where the RBI permits. Zero-rating then comes from Section 16. The contract should say whether fees include GST. Confirm your position with your chartered accountant.
Can a client stop me working for competitors after the project ends?
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Section 27 of the Contract Act makes agreements in restraint of trade void, so a non-compete that runs after the engagement is largely unenforceable. Exclusivity during the project is a separate question and is generally valid if you agreed to it. Confidentiality obligations and narrow non-solicitation of the client’s staff are assessed on their own terms. The report quotes each restraint and explains which category it falls into.
Could my freelance contract be treated as employment?
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Possibly, because the label does not decide it. Fixed hours, exclusivity, close supervision, company equipment and being part of the client’s team all point towards employment. The Code on Social Security defines gig and platform work as arrangements outside a traditional employment relationship, but the categories overlap and many State rules are still in draft. The report raises classification as a question to confirm, never as a conclusion.
Related India reviews
ClauseAudit provides information and analysis, not legal advice, and does not create an advocate–client relationship. Findings use calibrated language because enforceability depends on facts and forum. Consult a qualified advocate before acting on any finding. See India pricing.
Freelance & Consultant guides for India
- Udyam Registered? Your Client Has 45 Days to Pay YouSections 15 and 16 of the MSMED Act set a payment deadline and compound interest on delay for registered micro and small suppliers.
- Should You Register on Udyam? What It Gets an Indian FreelancerUdyam registration is what brings a freelancer inside the MSMED payment protections. Here is what it does and does not give you.
- You Own Your Work Until You Sign It AwayUnder Indian copyright law an independent contractor is usually the first owner of what they create. Paying an invoice does not transfer it.
- Why Your IP Assignment May Expire After Five YearsSection 19 of the Copyright Act sets formalities for assignment, including a five-year default where no term is stated.
- Payment on Final Approval Is How Freelancers Do Not Get PaidA payment term tied to the client being satisfied has no defined trigger. Here is what to replace it with, with sample wording.
- Consultant or Employee? The Misclassification Test That Costs Both SidesA consultancy agreement that looks like employment creates exposure for the client and uncertainty for the freelancer. Here is how it is assessed.