diff --git a/docs/contracts/functions.rst b/docs/contracts/functions.rst
index 8d6507f32..aa9263ff8 100644
--- a/docs/contracts/functions.rst
+++ b/docs/contracts/functions.rst
@@ -33,6 +33,13 @@ that call them, similar to internal library functions.
         }
     }
 
+.. note::
+    Functions defined outside a contract are still always executed
+    in the context of a contract. They still have access to the variable ``this``,
+    can call other contracts, send them Ether and destroy the contract that called them,
+    among other things. The main difference to functions defined inside a contract
+    is that free functions do not have direct access to storage variables and functions
+    not in their scope.
 
 .. _function-parameters-return-variables: