How to agree and pay safely

Contracts, escrow and unpaid invoices across borders

A message thread where one side proposes terms and the other agrees is usually a contract. Escrow pays off mainly for a large first deal; otherwise a modest deposit and milestones do the job. If a client doesn’t pay, send a written demand with a deadline, pause the work and hold back the final files. Court is realistic mostly when you live in the same country, or both in the EU.

Updated September 27, 2026

Is a chat a freelance contract?

Usually, yes. An offer and a clear “yes” make a contract, and most countries don’t treat a contract as invalid just because it was agreed by email or chat. A UN model law that says so has shaped the laws of 88 countries. Write the terms from “Terms to agree on, in one message” above in the conversation, and send the price, currency and deadline with Propose terms.

Some places require a written contract with freelancers who work alone once the work is worth a set amount, counting all work for the same client over 120 days. For example:

• New York City and New York State: $800.
• Illinois: $500, for contracts since July 1, 2024.
• California: $250, for listed professional services such as design, writing, translation and marketing, for contracts entered or renewed since January 1, 2025.

Under these laws, if the contract sets no payment date, the client must pay within 30 days of the work being completed. New York City, New York State and Illinois publish free model contracts.

Escrow for freelancers: worth the fee?

Upwork and Fiverr hold the payment for fixed-price work until it’s accepted. Off a marketplace, you can use an escrow service. Escrow.com, for example, charges 2.6% (at least $50) up to $5,000 and 2.4% up to $50,000; paying by card or PayPal under $5,000 adds 3.05%. With milestones, the buyer still funds the whole amount upfront. On a $300 job the $50 minimum alone is about 17%, while a small deposit and milestones cost nothing. Escrow.com isn’t available in every country.

Two warnings. If the other side insists on an escrow site you’ve never heard of, it may be fake: type in the address of a service you already know instead of following their link. And bank transfers, Wise payments and crypto are hard to reverse once the money is sent.

PayPal disputes and chargebacks for services not rendered

• PayPal’s protection covers Goods and Services payments only, not Friends and Family. It also excludes “not as described” claims for custom-made items, so for most freelance work it helps mainly when nothing was delivered. In the US, a “not received” claim can be opened within 180 days of payment.
• Card networks typically let cardholders dispute a payment within about 120 days. In the US, a credit card billing-error notice must reach the card issuer within 60 days of the first statement that shows the charge.
• If you’re the client and the work never arrives, ask for delivery by a specific date in the conversation first, then open a dispute within these deadlines.
• If you’re the freelancer, remember that a client who paid by card or PayPal can dispute the payment months later, so keep proof of delivery: dated files, the conversation and the accepted terms.

When a client doesn’t pay an invoice

1. Send a reminder with the invoice and the date you agreed on.
2. Pause work on the next milestone, and hold back the final files and the rights until you’re paid.
3. Send a formal demand letter: what the payment is for, the amount, a deadline and what you’ll do next. In England and Wales, allow 14 days if the client is a company and 30 days if it’s an individual or sole trader.
4. Claim late-payment interest where the law allows it. Between businesses (not with private clients), the UK rate is 8% a year above the Bank of England base rate, plus a fixed £40 to £100 per invoice; in the EU, interest runs from 30 days after the invoice if no date was agreed, plus €40 per invoice. The New York, Illinois and California freelancer laws also let freelancers claim up to double the unpaid amount.
5. Try mediation, and go to court as a last resort.

Small claims court, and why borders matter

In England and Wales, court fees for a claim up to £10,000 run from £35 to £455, and you can claim online only if both sides have an address there. In the US, small-claims limits vary by state, some as high as $25,000, and you usually don’t need a lawyer. Within the EU, the European Small Claims Procedure handles cross-border claims up to €5,000 in every country except Denmark.

Outside the EU’s shared rules, a judgment usually has to be recognized by a court in the other country before it can be enforced. Treaties such as the Hague Judgments Convention make this easier between the countries that joined, but it still takes time and money. For small cross-border amounts, a deposit and milestones are the protection that works.