Looking to create a contractor agreement? Our comprehensive guide provides everything you need to know to create a rock-solid agreement quickly and easily.
The way every individual is working post-pandemic has changed. Remote operations are performed in full fledge today. However, one thing that remains common worldwide is contractor agreements. Independent contractors are employees that extend services to a company without actually being a part of the firm. These contractors are not legal employees of the firms that hire them. The companies provide their full-time workers with salaries and other incentives like insurance. Legal employees also have complete control over the operations; however, for ICs, companies do not need to extend benefits or give incentives.
A contractor agreement clearly states the conditions of your working bond and mentions that the employee is not a full-time worker of the company. Without a proper agreement, you might be liable for worker misclassification and also suffer serious fines. The lawsuit gets even more complicated when you work as an IC for another country.
The contractor agreement is a bond between a firm and contractor that the company has engaged with for business purposes. A contractor is a person that is going to work for the company on a specific assignment or project. This contract describes the complete terms and rules of the contractor's functioning and their roles and tasks. In case of disagreements between the firm and contractor, the bond works as legal paperwork to safeguard guidelines.
Independent Contractor agreements are slightly different from contractor agreements. In the case of ICs, the contracts can be more suitable for workers who are not planning to work with the firm full-time. It is for employees that work on an hourly or project basis.
The agreement is a legal document and thus plays a significant role. A rental bond secures the parties' rights and shields them against disputes. During the contract duration, multiple disputes might arise between the two parties. Such disputes are only resolved with the assistance of these agreements. It ensures proper security for the owner and safeguards tenants against unlawful demands. The rental agreement also gives the tenant brief ownership for some time.
1. Bond Statement
Defining your role as a contractor is very necessary while making a contractor agreement. Doing so is important for both parties if you have to share details regarding work or financial taxes. Further, it also safeguards you from employee misclassification.
A bond between the client and the contractor is business. Thus, all details must be mentioned clearly, including names and dated signatures. You might also have to specify the specific discretion of when, where, and how you plan to meet the terms of your IC agreement and that you are liable to extend all tools needed for easy working.
2. Work Description
Another vital aspect to include is the work specifics that you need to perform. Doing so will ensure that you and your client are thinking similarly and there is no chaos. Mention and discuss all the task deliverables you expect, and define the process using legal language. Also, leave spaces for backup plans and quick change approvals so that you do not suffer delays and your project is back on track in time.
3. Payment Conditions
While discussing any billing or rate terms, discover all you need beforehand. Know what you wish to ask for and what you seek from the contractor. Price can be a point of contention and negotiation; however, if you are confident and well-prepared, you can agree well with your client.
Apart from payments, discuss how and when your client wishes to be billed. Also, mention the time within which you will make a payment after the invoice is received.
While making a contractor agreement, assumptions do not have any place. It is also better to get things cleared on paper before proceeding. If there are numerous departments and units involved, elect a contact point and determine each individual's time for reviewing and approving. Form a way in which you can communicate your progress and pick a way that works best for both parties. Some customers will necessitate contractors to extend insurance coverages as well. So, if this is the scenario, include it in your contract.
5. Deadlines and Timelines
Mention the general work length of your working bond in your contractor agreement. If you do not know when you will be able to deliver the project successfully, you can mention an approximate date. Mention firm deadlines for all projects and outline exactly what the client expects within that period.
In addition, mention what a successful deliverable or milestone looks like. Set legal metrics will assist you in getting closer to your ultimate aim, and your client also understands what to expect at each step
6. Termination Terms
Termination terms mention the rights of both parties to eliminate a contractor agreement. By including this aspect, you safeguard yourself from random situations. Non-payments and breaches could be possible reasons to end the bond.
7. Confidentiality and Non-Disclosure Terms
These terms and clauses help in keeping the company's private details safe. Being independent or full-time contractors, agreeing to these terms might be essential. Companies must mention it in the ICs for complete information safety from competitors.
If the customer wishes to include a non-compete clause, mention that you will dismiss the clause once the agreement has expired.
Contractor agreements are essential parts of your business. A firm contractor agreement ensures complete safety and marks your work areas well. Use the finest assistance from above and make a suitable ICs or Contactor Agreement for your firm today.
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This Contractor Agreement (this "Agreement: or this "Contractor Agreement"), effective as of date (the "Effective Date"), is made and entered into by and between:
"Client name", a company organized and existing in country with offices located at address (hereinafter the "Client"), and (contractor name, an independent
contractor located in the country, with a registered address located at
address (hereinafter the "Contractor").
1.The Client is in the business of description of business and is in need of description of need and lacks needed experience or expertise to address this need, and
2.The Contractor has extensive expertise in description of expertise, and
3.The Client wishes to engage the Contractor to provide consulting and/or professional services in description of project, and the Contractor is willing to provide such consulting and/or professional services, solely upon the terms and conditions of this Agreement,
NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants, agreements, and promises set forth herein, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:
1. SERVICES & ENGAGEMENT.
The Client hereby engages the Contractor to provide the consulting and/or professional services outlined in this Section 1 below (the "Services").
1. Base Services -
Scope of Work - The Contractor will provide
Duration - The Contractor will provide the Services for the period starting as of date and ending as of date
Location - The Services will be performed at location
Not Included - For clarity, the Services expressly do not include
2.Additional Services - Throughout the term of this Agreement, at times convenient to the Contractor and the Client, and upon the Client's request, the Contractor may provide additional consulting and/or professional services on an hourly rate basis at a rate of dollar amount U.S. Dollars per hour or, at the option of the Client, up to ( ** ) hours per calendar month in exchange for a fixed monthly fee in the amount of dollar amount U.S. Dollars per calendar month. Under the latter option, no balance of hours from the previous month may be carried over to the next month, and each calendar month's hours will be capped at ( ** ) hours.
2. CLIENT OBLIGATIONS.
Will the client need to provide workspace, access to systems or materials? Here you will want to list everything you expect from the Client. And, it doesnot have to stop with more physical items; you can request prompt review/approval of deliverables and other such things.
The term of this Agreement shall commence on the Effective Date and continue until DATE, unless otherwise extended by mutual, written agreement of the parties or terminated as set forth herein. NOTE: (Because we include the "Additional Services" option above, you may want to have the term of the Agreement extend past the end-date of the "Base Services.")
4. COMPENSATION & PAYMENT.
As consideration for the services rendered under Section 1.a above, the Client shall pay the Contractor the fixed price amount of dollar amount plus all reasonable substantiated costs associated with approved travel. Payment of the fixed price amount shall be in advance of any services being provided under this Agreement and shall be a condition precedent to any performance obligation of the Contractor hereunder. Upon completion of such services, the Contractor will deliver to the Client all copies of receipts for travel expenses, and the Client will reimburse the Contractor within thirty (30) days of the date of the Contractor's invoice, which shall include copies of receipts for backup. Reasonable travel expenses include, but are not limited to, mileage, airfare, Internet connections, taxis, auto rentals, meals and incidentals, and lodging.
If the Client opts to pay the Contractor on an hourly rate basis for the services described in Section 1.b, the Client shall pay the Contractor on a bi-weekly basis for actual hours expended within (**) days of the date of any Contractor invoice. If the Client opts to pay the Contractor on a fixed fee basis for each calendar month in accordance with Section 1.b, the Client shall pay the Contractor the full fixed fee amount on the first of every calendar month. Such payment is a condition precedent to any performance obligation of Contractor under Section 1.b.
All payments hereunder shall be made in U.S. Dollars via wire transfer in accordance with instructions provided by the Contractor.
5. INDEPENDENT CONTRACTOR.
Contractor and the Client shall at all times be deemed to be independent contractors and nothing herein shall be construed to create or imply that there exists between the parties a partnership, joint venture or other combined business organization. Contractor shall hold no authority, express or implied, to commit, obligate, or make representations on behalf of the Client and shall make no representation to others to the contrary. Nothing herein is intended nor shall be construed for any purpose as creating the relation of employer and employee or agent and principal between the parties. Except as otherwise specified herein, Contractor retains the right to direct, control or supervise the details and means by which the Services are provided. Contractor shall not be eligible for, or participate in, any insurance, pension, workers' compensation insurance, profit sharing or other plans established for the benefit of the Client employees.
Contractor shall be responsible for payment of all taxes arising out of the Contractor's activities in connection with this Agreement, including without limitation, federal and state income taxes, social security taxes, unemployment insurance taxes, and any other taxes or business license fees as required. The Client shall not be responsible for withholding any income or employment taxes whatsoever on behalf of Contractor.
Each party shall receive in confidence ("receiving party") from the other party ("disclosing party") and treat as confidential all technical information, business/financial information, management information, and documentation which (i) is stamped or otherwise marked as being confidential or proprietary, whether in written or electronic form, (ii) pertains in any way to such party's (or its affiliates') business plans or methods, or (iii) otherwise is not generally known by others, and under the circumstances of the disclosure, the disclosing party had a reasonable expectation that the receiving party would know that the information is confidential or proprietary (collectively, "Proprietary Information"). Information that is disclosed orally or visually to a receiving party shall also be deemed Proprietary Information if the disclosing party identifies such information as proprietary at the time of disclosure and, within thirty (30) days after such disclosure reduces the subject matter of the disclosure to writing and submits it to the receiving party.
A receiving party shall hold Proprietary Information received from the disclosing party in confidence, shall use such information only for the purpose of and in accordance with this Agreement and shall not further disclose such information to any third party without the prior written approval of the original disclosing party. The obligation to protect the confidentiality of Proprietary Information shall extend for a period of five (5) years following a party's receipt of Proprietary Information.
The restrictions of this Section shall not apply to any information: (i) lawfully received from another source free of restriction and without breach of this Agreement, (ii) that is published or becomes generally available to the public without breach of this Agreement, (iii) known by the receiving party prior to the time of disclosure, (iv) independently developed by the receiving party without resort or access to the Proprietary
Information; or (v) that the disclosing party has approved for further release by the receiving party.
Proprietary Information shall remain the property of the disclosing party and shall be returned or destroyed upon written request or upon termination or expiration of this Agreement. Receiving party may retain in the files of its legal counsel for archival purposes only, one copy of all written materials returned.
Both parties acknowledge that the Proprietary Information to be disclosed hereunder is of a unique and valuable character, and that the unauthorized dissemination of the Proprietary Information would destroy or diminish the value of such information. The damages to the disclosing party that would result from the unauthorized dissemination of the Proprietary Information would be impossible to calculate. Therefore, both parties hereby agree that the disclosing party shall be entitled to injunctive relief preventing the dissemination of any Proprietary Information in violation of the terms hereof. Such injunctive relief shall be in addition to any other remedies available hereunder, whether at law or in equity. The disclosing party shall be entitled to recover its costs and fees, including reasonable attorneys' fees, incurred in obtaining any such relief. Further, in the event of litigation relating to this Independent Contractor Agreement, the prevailing party shall be entitled to recover its reasonable attorney's fees and expenses.
7. INTELLECTUAL PROPERTY RIGHTS.
Nothing contained in this Independent Contractor Agreement shall be construed as granting to any party a license, express or implied, under any patent, copyright, trade secret, or other intellectual property right now or hereafter owned, obtained, or licensable by a Party to this Agreement. Any intellectual property made in the performance of this Agreement solely by the personnel of one Party shall be or remain the sole and exclusive property of that Party, regardless of whether it is completed or reduced to practice thereafter. In the event that employees of the Parties jointly produce copyrightable material, such material shall be jointly owned and copyrighted with rights reserved for both Parties and both Parties shall share in the cost, if such copyright is registered.
If during the performance of this Independent Contractor Agreement inventions result, the following shall apply: each invention, discovery, or improvement (hereinafter referred to as "Invention") conceived or first actually reduced to practice by one or more employees of one of the Parties, shall be the sole property of the Party whose employee or employees made the Invention. Any Inventions conceived or first actually reduced to practice jointly by employees of both Parties hereto shall be jointly owned by both Parties. Patent applications covering such joint Inventions shall be filed by attorneys mutually acceptable to both Parties and the cost therefore shall be equally shared. In the event one of the Parties does not desire to file a patent application covering a joint Invention in any particular country or to equally share in the expenses therefore, the other Party shall have the right, at its own expense, to file such application and shall have control over the prosecution of such application and maintenance of any patent which may issue thereon, including the sole right to abandon such application or patent at any time.
The Client acknowledges that the Contractor possess knowledge and expertise relating to the subject matter of the Services ("Contractor Know-How"), which may include intellectual property rights in certain pre-existing tools and materials used by the Contractor in performing the Services or otherwise. Nothing in this Agreement is intended to transfer to the Client any rights in the Contractor Know-How, which shall remain the property of the Contractor.
8. REPRESENTATIONS & WARRANTIES.
Contractor represents and warrants that the Services will be performed in a professional and workmanlike manner and it has the authority and capacity to enter into this Agreement and is not subject to any restrictive covenant or other legal obligation that prohibits the Contractor from performing the Services.
EXCEPT FOR THE LIMITED WARRANTIES EXPRESSLY SET FORTH ELSEWHERE IN THIS AGREEMENT, THE SERVICES ARE PROVIDED "AS IS," WITH ALL FAULTS, AND THE ENTIRE RISK AS TO THE SATISFACTORY QUALITY, PERFORMANCE, ACCURACY, AND EFFORT OF SUCH SERVICES SHALL BE WITH THE CLIENT. THE Contractor DISCLAIMS ANY AND ALL OTHER EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SERVICES PROVIDED HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
This Agreement may be terminated by either party in the event the other party fails to perform its obligations hereunder on time, fails to assure timely performance, or otherwise fails to perform its material obligations; provided, however, that prior to such termination the terminating party notifies the defaulting party in writing at least () days in advance, states the reasons why the Agreement should be terminated and affords the defaulting party an opportunity to cure any alleged default during such () day notice period. NOTE: The timeframes in this Section often change depending on the circumstances, and the needs of both parties. Feel free to change as necessary.
Either party may terminate this Agreement, upon notice and without liability, in the event the other party: (a) files a petition in bankruptcy; (b) has filed against it an involuntary petition in bankruptcy not dismissed within thirty (30) days; (c) consents to the appointment of a receiver, custodian, trustee or liquidator; or (d) dissolves, liquidates or makes a general assignment for the benefit of creditors.
Either party may terminate this Agreement, or any Services to be performed hereunder, in whole or in part, without cause and for its own convenience, by providing the other written notice of termination at least thirty (30) days in advance, specifying the extent to which the Agreement is so terminated and the date upon which such termination becomes effective. The terminating party shall have no liability for such termination except that the Client shall be liable for Services rendered and/or expenses incurred by the Contractor in accordance with this Agreement prior to the effective date of such termination and for which payment has not been made.
10. LIABILITY AND INDEMNIFICATION.
Each Party shall indemnify and hold harmless the other Party and its affiliates, directors, officers, employees, partners, contractors or agents, from and against any and all claims, actions, causes of action, demands, or liabilities of whatsoever kind and nature, including judgments, interest, reasonable attorneys� fees, and all other costs, fees, expenses, and charges (collectively, �Claims�) to the extent that such Claims arise out of or were caused by the negligence, gross negligence, or willful misconduct of the indemnifying Party or from any breach of the Agreement by the indemnifying Party.
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES INCURRED BY THE OTHER PARTY OR ANY THIRD PARTY, WHETHER IN CONTRACT, TORT, OR BASED UPON A WARRANTY, EVEN IF THE OTHER PARTY OR ANY THIRD PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE TOTAL LIABILITY OF Contractor TO THE CLIENT SHALL NOT EXCEED THE SUM OF THE FEES PAID TO THE Contractor BY THE CLIENT HEREUNDER.
- Severability � If any provision of this Agreement shall be held to be invalid or unenforceable, such provision shall be stricken and the remainder of the Agreement shall remain in full force and effect to accomplish the intent and purpose of the parties. The parties agree to negotiate the severed provision to bring the same within the applicable legal requirements to the extent possible.
- Disputes � Any dispute, controversy or claim arising out of or in connection with this Agreement, including without limitation, any dispute regarding the enforceability of any provision, that cannot be resolved through good faith negotiations within thirty (30) days or such longer period of time as may be mutually agreed between the Parties, shall be submitted to and finally resolved by a court of competent jurisdiction in COUNTY County in STATE.
- Governing Law � This Agreement shall be subject to, and construed and interpreted in accordance with, the laws of the State of state, without regard to its conflict-of-laws provisions and the U.N. Convention for the International Sale of Goods.
- No Waiver � Any failure or delay by either party to exercise any right, power or privilege hereunder or to insist upon observance or performance by the other party of the provisions of this Agreement shall not operate or be construed as a waiver thereof. No waiver shall be binding on either party unless it is in writing and signed by an authorized representative of the party to be bound.
- Survival � The obligations in this Agreement that by their terms naturally survive the expiration or termination of this Agreement shall so survive.
- Language of Contract � This contract has been negotiated and concluded in English U.S. It may be translated into any other language for practical purposes, but the English U.S. version shall prevail in the event of any doubt.
- Anti-Assignment � Neither party may assign, subcontract, or otherwise transfer its rights or obligations under this without the prior written consent of the other party, which shall not be unreasonably withheld.
- Integration/Modification � This document and any exhibits or attachments hereto embody the entire agreement of the parties with respect to the subject matter hereof and supersede and cancel all previous negotiations, agreements or commitments by the parties whether oral or written. This Agreement may not be released, canceled, abandoned, amended or modified in any manner except by an instrument in writing duly signed by each of the parties hereto.
In Witness Whereof, this Agreement is duly executed by the duly authorized representatives of the parties as set forth below.
[Sender.FirstName] [Sender.LastName] [Client.FirstName] [Client.LastName]