Independent Contractor Agreement Template
Looking for an Independent Contractor Agreement? This document outlines the specific services a contractor will provide and how much they will be paid.
What is an Independent Contractor Agreement?
An independent contractor agreement is contract that is written and signed between an independent contractor and a client. An independent contractor is self-employed individual or freelancer who provides a service for a client in exchange for money, the client hires independent contractor after signing a verbal agreement with them that highlights the terms and conditions of the contract.
An independent contractor agreement is a legally binding contract between two parties, and it includes the information about the scope of work, payments, and deadlines. Independent contractors are very beneficial for business that are small as they can help in saving money when it comes to certain type of work.
As a small business owner, hiring an independent contractor to do work for you rather than hiring a full-time employee is beneficial for you as you won’t have to provide a monthly salary and other things that are included in an employee contract. For an independent contractor, you just have to decide on an amount that is reasonable for the work that you have asked them to do and then you can negotiate with the contractor and decide whether they will accept advance payment, installment payments or paying full amount once the job is done.
An independent contractor agreement will make sure that there is no confusion between the parties that are involved in the work. When both parties have signed the independent contractor agreement willingly, it will be easily to go along with the work and there won’t be any troubles when both parties are on the same page about everything. Once the parties have signed the agreement, the project that they are working together on will go smoothly without any conflicts.
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Purpose of an Independent Contractor Agreement:
As a self-employed contractor, signing an independent contractor agreement with you client will provide you a clear image of what are the client’s expectations from you and what kind of result do you need to provide in order to satisfy the client. Independent contractor agreements always include a clause related to confidentiality and consequences in order to protect the parties involved.
An agreement like this will protect both parties simultaneously, as it protects client from getting involved in a fraud and gives them leverage in case there are any difficulties, they can take the matter to the court. And as the contractor, it will protect them in case client ask them to do work that was not included in the contract, they can simply refuse to do it as it was not what they agreed upon earlier.
One thing to note here is that an independent contractor agreement is only for self-employed contractors or business equity. Company employees do not need an agreement like this as they are not independent contractors, and they work under a company.
What should be included in an Independent Contractor Agreement?
Following are the things that should be included in an Independent Contractor Agreement:
- Names and contact information of all the parties invloved
- Terms and Conditions
- Parties
- Responsibilities and Deliverables
- Time frame
- Confidentiality clause
- Services
- Payment policies
- Refund policies
- Termination
- Obligations that the contractor must fulfill
- Intellectual property
- Disputes
- Choice of law
- Compensation
- State of governance
- Signatures of everyone involved in the project and present during the time of contract signing.
Things to consider while making an Independent Contractor Agreement:
There are four key points that you should keep in mind while drafting an independent contractor agreement:
Classification is important:
It is very necessary to classify workers as contractors for tax purposes, a mistake on your end can lead to trouble with Internal Revenue Service (IRS). Make sure that the worker is classified as an independent contractor in the agreement and include a few clauses that outlines a contractor relationship.
Scope of Work:
The most important thing to include in the contract is what kind of work will the contractor be doing for the client? All the details about the project should be put into writing in the contract.
Be clear about payments:
Payment policies as well as refund policies should be included in the contract. Payment is one thing that can lead to conflicts between the parties so when both parties have mutually agreed on the payment policies, it should be written in the contract.
Who will be paying for the supplies?
A clause regarding who will be the one responsible to pay for all the expenses and supplies should be written in the contract. If the contract is going to pay for everything or if it is the client that will be paying for everything, it should be mentioned in the contract. This will help in avoiding any troubles regarding the expenses and supplies in the future. In most cases, the independent contractor pays for everything, but it is still better to include that in the contract.
Benefits of having an independent contractor agreement:
An independent contractor agreement has loads of benefits. For freelancers, for companies and for clients that hire independent contractors, it is beneficial for all.
Firstly, for clients who hire independent contractors for projects, these are the benefits of an independent contractor agreement:
- It will provide protection in case of unsatisfactory job or unfinished project
- A contract will make sure that the project is finished in the agreed amount of time
- It will provide the opportunity to terminate the project if it is not working well for them
For the firms that hire an independent contractor, following are the benefits that come with hiring an independent contractor and singing an independent contractor agreement:
It offers liability protections
It helps in protecting the business interests of the company
It will help in securing the assets of the company
A contract will make sure that the contractor maintains confidentiality
For self-employed contractors, signing an independent contractor agreement with their client will provide the following benefits:
It will ensure that they are paid the right amount at the agreed time for their work
Presenting a formal contract to client will offer professionalism and it has more credibility compared to a verbal agreement
As a contractor, it will provide you will clear expectations and guidelines regarding you work
When do you need an Independent Contractor Agreement?
An independent contractor agreement is required when you are hiring an independent contractor or freelancer to do a job for you in exchange for your money. Independent contractors provide many services that can help you in different fields of work. App development, content writing, graphic deign and software engineering are some of the few fields in which you may need an independent contractor to work for you.
Independent contractors will draft a contract and ask you to read the terms and conditions and explain in detail about the kind of work you need them to do before you sign the contract. It is necessary to have an independent contractor agreement if you are an independent contractor, a client hiring an independent contractor or a company hiring an independent contractor.
In simple words, independent contractor agreements are mutually agreed upon and they are signed to protect both parties that are involved in the project. It is in best interest of everyone to sign the agreement without causing any troubles for either side.
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Independent Contractor Template
This Independent Contract Agreement (hereinafter referred to as the “Agreement”) is entered into on ________________ (the “Effective Date”), by and between ________________________, with an address of ________________, (hereinafter referred to as the “Client”) and ________________, with an address of ________________, (hereinafter referred to as the “Contractor”) (collectively referred to as the “Parties”).
General:
The Contractor possesses the following experience, skills, and/or knowledge:
1.______________________________________________ 2.____________________________________________ 3.______________________________________________
The Client requires the following work to be completed and wishes to engage the
Contractor to perform such work:
1.______________________________________________ 2.______________________________________________ 3.______________________________________________
Services:
The duties of the Contractor towards the Client are listed below:
1._____________________________________________ 2._____________________________________________ 3._____________________________________________ 4._____________________________________________ 5._____________________________________________
Compensation:
The Parties agree that the Client will compensate the Contractor through the following means:
1._________________________________________________________ 2._________________________________________________________ 3._________________________________________________________ 4._________________________________________________________ 5._________________________________________________________
Term:
This Agreement will go into effect on the date that it is signed ________________________ and end when the services outlined in this Agreement have been fully provided. Only with both Parties' written consent and written confirmation may this Agreement be extended.
Ownership of the work product (the "Work Product"):
As a result of this Agreement, the Contractor will produce the Work Product, which may include physical or electronic documents, presentations, reports, and the like. The Client shall own all Work Products. The Work Product is no longer the Contractor's property, and upon the expiration or termination of this Agreement, the Contractor shall return all Work Product.
Relationship between Parties:
* The Parties acknowledge that this Agreement is an independent contractor agreement in which the Contractor is acting as an independent contractor while performing the specified services.
* The independent contractor shall never be regarded as an employee.
* No other partnership between the Parties is formed by this Agreement.
Confidentiality:
For the Contractor to provide the Services, the Client may be required to divulge sensitive information, including trade secrets, market knowledge, and other proprietary information, to the Contractor during this Agreement. The Contractor will never divulge any of this confidential information. The Contractor further agrees that at no point will the Contractor utilize any of this confidential information for personal gain. Even after the Agreement is terminated by its natural expiration or by an early termination by either Party, this clause is still in full force and effect.
Intellectual Property:
The Contractor acknowledges that any intellectual property provided by the Client to him or her will remain the Client's exclusive property, including, but not limited to, copyrights, patents, trade secret rights, and other intellectual property rights connected to any ideas, concepts, techniques, inventions, processes, works of authorship, confidential information, or trade secrets.
Representation and Warranties:
Both Parties vouch for their full legal capacity to enter into this Agreement. There will be no violations or infringements of any third party's rights, of any other agreements between the Parties, individually, and any other person, organization, or business, or of any law or governmental regulation by either Party in the performance or discharge of its obligations.
Indemnities:
*The parties agree to safeguard each other against any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees, and costs of any kind or amount whatsoever resulting from the negligence of or breach of this Agreement by the indemnifying party.
*Even after the Agreement is terminated by its natural expiration or by an early termination by either Party, this clause is still in full force and effect.
Limitation of Liability:
Any damages resulting from any part of this agreement, including but not limited to loss of revenue or anticipated profit or loss business, costs of delay, or failure of delivery, which are not related to or the direct result of a party’s negligence or the breach, shall in no event be the liability of either party.
Termination:
Any of the following may result in the termination of this Agreement:
*If one of the Parties violates this Agreement, immediately.
*At any time by giving the other party written notice at least _______________ days before ending the Agreement.
*If this Agreement is terminated, the Client shall pay for all services rendered by the Contractor up to the date of termination, unless the Contractor is in breach of this Agreement and fails to cure the breach after reasonable notice.
Governing Law:
This Agreement shall be governed by and construed in accordance with the laws of ________________.
Severability:
All other sections should remain in full force and effect as valid and enforceable. If any provision of this Agreement is found to be invalid or unenforceable, in whole or in part, that provision shall be severed from the remainder of the Agreement.
Modifications:
The Parties acknowledge and agree that this Agreement may be amended only in a document signed by both of the Parties hereto. Any modifications made by the Parties shall therefore be incorporated into this Agreement.
The Parties hereby agree to the terms and conditions outlined in this Agreement and such is demonstrated by their signatures below:
Client
Signed: ____________________________________________
Name: ____________________________________________
Date: ____________________________________________
Contractor
Signed: ____________________________________________
Name: ____________________________________________
Date: ____________________________________________