What Is an Independent Contractor Agreement?

An Independent Contractor Agreement represents a formal arrangement between the customer and the contractor detailing the scope of work the latter is supposed to do and setting expectations for both parties. The purpose of a general Contractor Agreement is to hire a person or organization for a limited period of time to perform a certain task or work on a project. Alternate Name: Contractor Agreement. While there are many similarities between freelancers and contractors and you may sign a Freelance Contract when hiring a self-employed individual, consider offering an Independent Contractor Agreement to the other party if you want them to work on your premises and with your equipment, the project requires full-time occupation and they will be unable to look for other clients, and you want to discuss rates acceptable for the two of you, or even temporarily replace a full-time employee with a contractor. For a full list of Independent Contractor Agreement templates please check out our library below .

What Should Be Included in an Independent Contractor Agreement?

Depending on the wishes of the customer and the contractor, the agreement they sign may include different provisions and mention various positive and negative scenarios to protect the interests of both parties. However, here is what a basic Contractor Agreement contains: Document title . Mention it on top of the first page and in the first paragraph when you explain who has given their consent to sign the deal. Names and mailing addresses of the contractor and the customer . When you negotiate the terms of the contract, think about the easiest way to communicate with the other party, especially in emergency situations, and include the contact details to let each other know how to reach out to the counterpart quickly. Confirmation of the parties' intention to be bound by the conditions set in writing. List of services the contractor is hired to perform . Make sure the list is full at the moment of signing - it can be amended later by the mutual choice of the parties. Payment details . Indicate the compensation the client is paying for the aforementioned services, state the suitable payment methods, and draft a payment schedule if necessary. Work product clause . If you are hiring a professional to create something for you, they must agree the final product will be owned by the customer by the end of the project. Duration of the agreement - the start and end dates of the arrangement. Optional provisions . Since there is no uniform Contractor Agreement format, you may discuss warranty, insurance, confidentiality, and severability and add these terms to your contract. Additionally, it is possible to let the contractor sign a Subcontractor Agreement if at some point they realize they cannot finish the job without hiring assistants that assume identical rights and obligations - note that it is required to obtain the permission of the client first.

How to Terminate an Independent Contractor Agreement?

Just like a Service Contract , an Independent Contractor Agreement should include a separate clause that explains how the parties will end their professional relationship. There are several reasons to end a contract signed by the contractor and the customer: One of the parties is unable to perform their duties - for instance, if a contractor has been hospitalized, it means they cannot fulfill their obligations established in writing. In this case, opt for a unilateral termination - send a formal notice to the other party days or weeks before your contract officially ends. Note that this termination likely brings fines and penalties for the party that was not able to comply with their duties. Both signing parties agree the agreement is no longer relevant for both of you - this is the most convenient way to put an end to mutual contractual obligations and avoid disputes and disagreements. The purpose of the contract was reached which signifies the automatic termination - and the parties do not have to prepare a separate document to terminate the arrangement. However, all these scenarios come into play when there is a termination clause in the text of the original contract. If a client and a contractor did not consider this provision during their initial negotiations, it is still necessary to arrive at a consensus to minimize financial losses for both parties - work out mutually acceptable termination conditions following the regulations of your state to avoid a lawsuit.