israeli-freelancer-service-agreement

name	israeli-freelancer-service-agreement
description	Draft a tailored Israeli freelancer service agreement (heskem matan sherutim) between an independent service provider (osek patur or osek murshe) and their client. Covers scope of services, payment terms under the 2017 Prompt Payment to Suppliers Law, the independent-contractor declaration that lowers the risk of a court reclassifying the relationship as employment (yachasei oved-maavid), IP ownership, confidentiality, termination, and indemnity. Use when a freelancer, consultant, designer, or developer needs a written contract before a project, or asks to draft a heskem hitkashrut or contractor agreement. Prevents costly retroactive employee-reclassification and unpaid-invoice disputes. Do NOT use for employment contracts (use israeli-employment-contracts), auditing a contract before signing (use israeli-employment-contract-reviewer), day-to-day invoicing (use israeli-freelancer-ops), or leases (use israeli-rental-agreements).
license	MIT
compatibility	Knowledge-only skill, no external tools or network required. Works with Claude Code, Claude.ai, Claude Desktop, Cursor, and other agents. Produces a Hebrew RTL contract draft; legal review by a lawyer is recommended before signing.

Israeli Freelancer Service Agreement

Problem

Israeli freelancers (עצמאים) routinely start projects on a handshake or a one-line email, then get burned two ways: a client pays 90 days late with no recourse, or, worse, a long engagement ends with the "contractor" suing for retroactive recognition as an employee and winning severance, pension, and back-benefits because the relationship looked like employment. A generic downloaded contract does not account for Israeli law: the reclassification tests, the default copyright rule that leaves IP with the freelancer, the statutory payment timing, or the VAT framing. This skill drafts a service agreement built around exactly those Israeli rules.

Instructions

This skill drafts a bilateral service / contractor agreement (הסכם למתן שירותים) from the freelancer's side. Work through the steps; produce the contract in Hebrew (RTL) because it is governed by Israeli law and will be read by Israeli parties.

Always tell the user, once, that this is a drafting aid and not legal advice, and that a lawyer should review the agreement before signing. This is especially important when money or IP is significant.

Step 1: Gather the deal facts

Collect the minimum needed to draft:

Field	Why it matters
Provider name + ת.ז./ע.מ., status (עוסק פטור / עוסק מורשה)	Drives the VAT and invoicing clause
Client name + ח.פ./ע.מ., business or private	Drives payment-law applicability (the 2017 law applies to business clients)
Services / deliverables	The scope clause and IP clause
Fee + structure (fixed, hourly, monthly, milestones)	The consideration clause
Payment term wanted (e.g. שוטף+30)	Overrides the statutory default
Who keeps the IP	Decides whether to assign or license deliverables
Term and notice	Termination clause

If the user does not know a field, use a sensible default and flag it in a "review these" list at the end. Never invent the parties' identifying numbers.

Step 2: Decide the independent-contractor framing (the most important step)

Israeli labor courts ignore the contract's label and apply the מבחן מעורב (mixed test), dominated by the מבחן ההשתלבות (integration test): is the freelancer a separate business, or an integrated part of the client's organization? If it looks like employment, the freelancer can later sue for retroactive recognition (הכרה בדיעבד) and collect severance, pension, vacation, sick days, holidays, and הבראה.

What actually protects the freelancer from a surprise reclassification is the real facts, not the contract wording. So:

1. Include an independent-contractor declaration stating the provider runs its own business, bears its own tax, Bituach Leumi, and pension, and that the parties intend a commercial, not an employment, relationship. Courts give this evidential weight only (per ע"ע 300256/98 אורי אייזיק) and will apply the integration test to the real facts, so never present the label as decisive.
2. Build in operational separation that the contract reflects: own tools, own hours, freedom to serve other clients, no company email, no exclusivity, invoicing per deliverable, and an express right to use subcontractors (no personal-performance requirement, which itself helps the contractor case).
3. Understand the set-off / gross-up clause correctly before using it. It says that if a court later finds employment, the fee is treated as already inclusive of social rights and the excess over a comparable employee wage is set off against any award. This clause protects the client, not the freelancer: it is the client's tool to claw back the "contractor premium", it is enforced only in narrow cases (express term plus a fee markedly above a comparable salary), and a court is not bound to honor it. Do not sell it to the freelancer as their shield. It also cannot waive non-waivable (cogent) labor rights.

Step 3: Draft the consideration, payment, VAT, and withholding clause

State the fee and structure, then set an explicit payment term. Under חוק מוסר תשלומים לספקים, התשע"ז-2017, if the contract is silent and the client is a business, the default is שוטף+45 (no later than 45 days from the end of the month the invoice was submitted). A freelancer is better off naming a shorter term (e.g. שוטף+30 or שוטף+0). Note that for government and public-body clients the law sets its own (often shorter) default and caps how far the term can be pushed, so verify the applicable provision rather than assuming שוטף+45. Reference the law so late payment carries interest and, after a further 30 days, דמי פיגורים, by default, and reserve the right to suspend work on non-payment.

State VAT correctly and unambiguously, because a wrong VAT framing is a direct error in the price:

• עוסק מורשה: "the fee is exclusive of VAT; VAT at 18% (as of 2025) will be added against a חשבונית מס." Say "exclusive of VAT" explicitly, since a bare number with no "+VAT" wording can be read as VAT-inclusive.
• עוסק פטור: "the provider is an עוסק פטור and does not charge VAT; a receipt will be issued." Add that if the provider crosses the turnover cap (122,833 ₪ for 2026) and converts to עוסק מורשה, VAT applies from that point.

Add a withholding-tax clause (ניכוי מס במקור): in Israeli B2B, the client may be legally required to withhold tax from the payment unless the freelancer hands over a valid אישור ניהול ספרים and an אישור פטור / שיעור מופחת מניכוי מס במקור. State that the provider will furnish these certificates, failing which the client withholds at the statutory rate. Without this clause the freelancer is blindsided when the first payment arrives net of withholding.

Step 4: Draft the IP clause

This is the clause clients get wrong. Under חוק זכות יוצרים, התשס"ח-2007 (סעיף 35), the default owner of a commissioned work is the CREATOR (the freelancer), not the client, unless the contract says otherwise. (Contrast: סעיף 34 gives an employer the copyright in an employee's work; a commissioned portrait or family-event photo defaults to the commissioner.)

So decide and draft explicitly:

• If the client should own the deliverables, expressly assign the economic rights, typically on full payment.
• Moral rights (הזכות המוסרית) of attribution and integrity are personal under the 2007 Copyright Law and cannot be assigned, only waived. Handle them with a separate waiver clause, not by lumping "all rights including moral rights" into the assignment (that part is void).
• The freelancer keeps rights in pre-existing tools, know-how, and general methods, and third-party / open-source components are licensed, not assigned (the freelancer often cannot transfer them).

Step 5: Add the scope-protection and standard clauses

• Acceptance and revisions: define how the client signs off on a deliverable, a deemed-acceptance window (e.g. silence for 7 business days = accepted), and how many revision rounds are included. "What counts as done" is where payment disputes live, so do not push it into an empty annex.
• Termination and accrued fees: state the notice period AND that on termination the freelancer is paid pro-rata for work done and approved expenses; for a cancelled fixed-price project, add a kill / cancellation fee based on progress. Without this, a designer terminated mid-project gets nothing.
• Confidentiality (סודיות), surviving termination.
• Restraint of trade: default to a narrow trade-secret + non-solicitation clause, NOT a broad non-compete. A bare non-compete is generally unenforceable in Israel; courts enforce a restraint only to protect a legitimate interest like a real trade secret and only if reasonable in scope, time, and geography (ע"ע 164/99 צ'ק פוינט נ' רדגארד).
• Liability cap + mutual indemnity, with carve-outs for willful misconduct, IP infringement, and confidentiality breach. Make indemnity mutual: the client should indemnify the freelancer for client-supplied materials and for client misuse of the deliverables. Optionally require professional liability insurance (ביטוח אחריות מקצועית) if the client is a company or public body.
• Data protection: if the freelancer processes the client's personal data (a developer touching a user database, a marketer handling a CRM or mailing list), add a clause defining the freelancer as a processor with security obligations and breach notification, per the Privacy Protection Law and its Amendment 13 (in force August 2025).
• Term, termination, and notice; governing law (Israeli) and jurisdiction, noting that classification disputes go to the labor courts regardless of a forum clause.

Step 6: Generate and hand off the draft

Assemble the Hebrew agreement. You can produce it directly, or use the helper script for a consistent skeleton:

python3 scripts/build_agreement.py --provider "ישראל ישראלי" --provider-id 000000000 \
  --client "חברת לקוח בעמ" --client-id 510000000 \
  --services "עיצוב גרפי וניהול מותג" --fee 8000 --vat murshe --payment-net 30 \
  --out agreement.md

End with a short "review these before signing" list (any defaulted fields, the IP choice, and the recommendation to have a lawyer review).

Examples

Example 1: Designer with a new client

User says: "I'm a freelance graphic designer (עוסק מורשה). New client wants a 6,000 ₪/month brand retainer. Draft me a contract."

Actions:

1. Gather facts; set fee 6,000 ₪/month +VAT, payment שוטף+30, designer keeps IP until paid then assigns deliverables.
2. Add the independent-contractor declaration + set-off clause, with the honest caveat.
3. Generate the Hebrew agreement and list "review these": notice period, insurance requirement.

Result: A ready Hebrew הסכם למתן שירותים the designer can send, with VAT and IP handled correctly.

Example 2: Developer worried about reclassification

User says: "I've been a 'contractor' for one company full-time for 2 years. They want a new contract. What should it say so I'm not treated like an employee?"

Actions:

1. Flag the elevated reclassification risk (single client, full-time, long duration = strong integration-test markers).
2. Draft the declaration + set-off clause, AND advise concrete operational changes (own tools, serve other clients, no company email), explaining the clause alone is not decisive.
3. Suggest, where relevant, the user consult a lawyer given the exposure.

Result: A contract plus a practical risk-reduction checklist, with realistic expectations.

Bundled Resources

Scripts

• scripts/build_agreement.py -- Assembles a Hebrew service-agreement skeleton from parameters. Run: python3 scripts/build_agreement.py --example

References

• references/legal-reference.md -- Clause-by-clause grounding in Israeli statute and case law (reclassification, payment law, IP default, VAT, non-compete, insurance).
• references/domain-checklist.md -- Coverage checklist the agreement is drafted against.

Gotchas

• Do not promise the contract label protects against reclassification. Agents tend to write "the parties agree there is no employment relationship" as if it settles the matter. It does not: Israeli courts treat the label as evidence only and apply the integration test to the real facts. Always add the honest caveat.
• Do not assume the client owns the deliverables by default. The intuition from many jurisdictions is wrong here: under סעיף 35 of the 2007 Copyright Law, a commissioned work defaults to the freelancer. If the agreement does not expressly assign IP, the client may not own it.
• Do not leave payment timing silent and "rely on the law." The statutory default (שוטף+45) is the worst case for the freelancer. Always set an explicit, shorter term.
• Do not draft a broad non-compete. A sweeping "shall not compete for 2 years" clause is usually unenforceable in Israel and signals an employment-like relationship. Use a narrow trade-secret / non-solicitation clause.
• Do not state VAT generically. Whether VAT is added depends on the provider's status (עוסק פטור charges none). Getting this wrong is a direct error in the price the client pays. The rate is 18% (from 1 January 2025), not the old 17%. State the fee as "exclusive of VAT" so a bare number is not read as VAT-inclusive.
• Do not forget withholding tax (ניכוי מס במקור). Israeli business clients often must withhold tax unless the freelancer provides a valid אישור ניהול ספרים and ניכוי-מס certificate. If the contract is silent, the freelancer is surprised by a payment that arrives net of withholding. Always include the certificate clause.
• Do not sell the set-off clause as the freelancer's protection. It is the client's tool to claw back the contractor premium if the relationship is reclassified, it is rarely enforced, and it cannot waive non-waivable labor rights. The freelancer's real protection is operational separation, not contract wording.
• Do not assign moral rights. Moral rights (הזכות המוסרית) are personal and non-assignable under the 2007 Copyright Law. Assigning "all rights including moral rights" is partly void; use a separate waiver and carve out third-party / open-source components the freelancer can only license.

Reference Links

Source	URL	What to Check
חוק זכות יוצרים 2007	https://www.nevo.co.il/law_html/law00/3953.htm	סעיף 34 / סעיף 35 ownership defaults
חוק מוסר תשלומים לספקים 2017	https://www.nevo.co.il/law_html/law00/144599.htm	default payment timing and interest
gov.il VAT decision	https://www.gov.il/he/pages/dec1270-2024	VAT is 18% from 1 Jan 2025
ע"ע 164/99 צ'ק פוינט נ' רדגארד	https://he.afiklaw.com/caselaw/2573	non-compete enforceability standard
ביטוח אחריות מקצועית	https://www.bizreviews.co.il/article/professional-liability-insurance-guide	professional liability cover

Troubleshooting

Error: "The client says they own everything I make for them"

Cause: The client assumes a work-for-hire default that does not exist for contractors in Israel. Solution: Point to סעיף 35 of the 2007 Copyright Law (commissioned work defaults to the creator). The contract must expressly assign IP for the client to own it; negotiate assignment on full payment.

Error: "Is the no-employment clause enough to protect me?"

Cause: Over-reliance on the contract label. Solution: No. It is evidential only. Combine the clause with real operational separation (own tools, own hours, multiple clients, no company email) and, for high exposure, advise a lawyer.

Error: "The client wants to pay 'when they pay their client', is that allowed?"

Cause: Pay-when-paid terms that push beyond the statutory default. Solution: The 2017 Prompt Payment law sets a default of שוטף+45 for business clients when silent. Set an explicit term in the contract; very long terms may conflict with the law's protections.