Independent Contractor Agreement Template
An independent contractor agreement, or freelance agreement is a legally binding contract between two parties for a particular project or service. An independent contractor agreement is typically presented before the project is to begin. An independent contractor usually has a specialized set of skills that makes them the ideal candidate for the project or desired service.
An independent contractor agreement is sometimes paired with a confidentiality agreement or non-disclosure agreement (NDA). In some situations, an independent contractor may have to sign a separate non-compete agreement depending on the nature of the business and scope of work. This sample independent contractor agreement can be used as a guide when drafting your own for your company’s needs.
What is in the Independent Contractor Agreement Template?
- A freelancer agreement is used when an individual is hired to complete a specific task or service on a long or short-term basis.
- Space to clearly define the services to be performed and compensation guidelines.
- General provisions typically found in this type of agreement.
- Other names for an independent contractor agreement include Freelancer Agreement, Freelance Contractor, Service Agreement, Freelancer Contractor, or Contractor Agreement.
The Who, What, When, Where, Why, and Hows of an Independent Contractor Agreement
It is pertinent to identify and establish the who, what, when, where, why, and hows of the independent contractor relationship.
- Who – The “who” to an independent contractor agreement identifies the specific parties to the contractor. It should clearly state who is hiring the contractor and who the contractor is.
- What – The “what” to the contract defines precisely what services the independent contractor or freelancer is to provide to the client.
- When – the “when” lists the “effective date,” which is the date that the contract officially begins. The contract may include an end date, but some do not. If it does not include an end date, the agreement should have a termination clause that establishes how the agreement is to be terminated and if any notice is required.
- Where – Most of the time, an independent contractor works in a remote location. However, if they are required to work on a specific site, that should be mentioned in the contract.
- Why – There are a few distinct differences between independent contractors and employees. It is crucial that the independent contractor is not an employee and does not have the same benefits or rights that an employee is generally entitled to.
- How – The “how” of an independent contractor agreement establish how the independent contractor will be paid. The agreed-upon hourly or flat fee rate should be included in the contract.
Why do you need an Independent Contractor Agreement?
There are many situations when an independent contractor agreement may be needed. Most businesses utilize independent contractors for writing blogs, redesigning websites, software coding, research, and much more. Event planners also use independent contractor agreements such as wedding planners, photographers, catering services, and other events.
What Should be Covered in an Independent Contractor Agreement?
An independent contractor agreement may vary based on the client’s needs and project. However, here are a few essential pieces to an independent contractor agreement:
- Parties to the agreement (Client/Company and Independent Contractor)
- Effective Date
- Description of Services
- Completion Date / Termination policy and procedures
- Compensation / Payment Structure
- Indemnification provision
Common Mistakes to Avoid when Drafting an Independent Contractor Agreement
Legally binding contracts are the best way to ensure both parties are on the same page about the service or project. A few common mistakes include:
- An overly broad and vague description of services to be provided
- Inaccurate Information /misidentifying the parties
- Dates and project deadlines
- Failing to consult an attorney to obtain legal advice
Differences Between an Independent Contractor and Employee
There are some major differences between an independent contractor and an employee. The differences mainly lie within the legal and tax purposes that an employee has that an independent contractor may not.
Independent contractors are usually self-employed and use their own equipment. One significant distinction is that independent contractors are responsible for paying their own taxes, whereas, with an employee, the company is responsible for paying state and federal taxes (employment taxes, income taxes, social security). Freelancers are not granted vacation pay, sick pay, or workers’ compensation. Freelancers are also not entitled to unemployment compensation.
Independent contractors are not usually entitled to employee benefits and are responsible for obtaining their own health insurance coverage. Most businesses offer employees insurance or other benefit packages. Misclassifying an independent contractor as an employee or vice versa could have serious legal and tax consequences.
How to Customize your Independent Contractor Agreement
An independent contractor agreement will vary depending on the scope of work, industry, and other related factors. Each state may have different state laws regarding what should and should not be included in an independent contractor agreement. It is a good practice to contact an experienced attorney to review your business contracts.
Electronic Signatures Accelerate the Signature Process
Electronic signatures are legally binding and expedite the signing process. Since independent contractors usually work remotely, obtaining an e-signature in this circumstance is the quickest and most convenient way for all parties involved. ApproveMe.com helps get your important documents signed expeditiously so you can get to work quicker.
Other Resources for Your Business
Task Management is vital! It is as equally important to freelancers and independent contractors as it is to the business that hired them. Here are some popular task management software tools:
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INDEPENDENT CONTRACTOR AGREEMENT
THIS INDEPENDENT CONTRACTOR AGREEMENT (“Agreement”) dated _______, 20__ (the “Effective Date”) is made between ________________________(the “Company”) located at ______________________________________________________________________________ and _________________________________ (the “Independent Contractor”), located at ______________________________________________________ for the purpose of setting forth the exclusive terms and conditions by which Company desires to acquire the Independent Contractor’s services.
In consideration of the mutual obligations specified in this Agreement, the parties, intending to be legally bound hereby, agree to the following:
Services. Company retains the above Independent Contractor, and the Independent Contractor agrees to perform for Company, certain services set forth in Exhibit A to this Agreement (the “Services”).
Consideration / Compensation.
(a) In exchange for the full, prompt, and satisfactory performance of all Services to be rendered to Company (as determined by the Company), Company shall provide the Independent Contractor shall be compensated as follows:
(b) The Independent Contractor is not entitled to receive any other compensation or any benefits from Company. Except as otherwise required by law, Company shall not withhold any sums or payments made to the Independent Contractor for social security or other federal, state, or local tax liabilities or contributions, and all withholdings, liabilities, and contributions shall be solely the Independent Contractor’s responsibility. The Independent Contractor further understands and agrees that the Services are not covered under the unemployment compensation laws and are not intended to be covered by workers’ compensation laws.
Indemnification / Release.
The Independent Contractor agrees to take all necessary precautions to prevent injury to any persons or damage to property during the term of this Agreement, and shall indemnify, defend and hold harmless Company, its officers, directors, shareholders, employees, representatives and/or agents from any claim, liability, loss, cost, damage, judgment, settlement or expense (including attorney’s fees) resulting from or arising in any way out of injury (including death) to any person or damage to property arising in any way out of any act, error, omission or negligence on the part of the Independent Contractor or any Independent Contractor Employee in the performance or failure to fulfill any Services or obligations under this Agreement.
Insurance and Other Requirements.
(a) The Independent Contractor warrants that it will obtain and keep in full force and effect at all times hereunder workers’ compensation, general liability and errors and omissions or professional liability insurance covering all of its Services. Company shall be listed as an additional named insured and/or as an additional loss-payee under such policies.
(b) The Independent Contractor shall provide to the Company copies of all policies required to be maintained, and a Certificate of Insurance indicating said coverage shall be provided to Company upon request.
(c) The Independent Contractor also warrants and represents that it has properly classified all of its workers, has and will maintain all required licenses and certifications.
Termination. This Agreement shall be effective on the date hereof and shall continue until terminated by either party upon _____ business days written notice.
Property Rights. Company retains all of its intellectual property rights in and to its Confidential Information. Immediately upon a written request by Company at any time, Independent Contractor will turn over to Company all Confidential Information of Company and all documents or media containing any Confidential Information of Company and any and all copies or extracts thereof.
At any time during or after the term of this Agreement, at the Company’s written request, the Independent Contractor and its Representatives shall promptly return to the Company all copies, whether in written, electronic, or other form or media, of the Company’s Confidential Information, or destroy all such copies and certify in writing to the Company that such Confidential Information has been destroyed. In addition, the Independent Contractor shall also destroy all copies of any Notes created by the Independent Contractor or its Representatives and certify in writing to the Company that such copies have been destroyed.
(a) Company and Independent Contractor expressly agree and understand that the above-listed Independent Contractor is a contractor hired by the Company and nothing in this Agreement shall be construed in any way or manner, to create between them a relationship of employer and employee, principal and agent, partners or any other relationship other than that of independent parties contracting with each other solely for the purpose of carrying out the provisions of the Agreement. Accordingly, the Independent Contractor acknowledges that neither the Independent Contractor and Independent Contractor’s Employees are not eligible for any Company benefits, including, but not limited to, health insurance, retirement plans or stock option plans. The Independent Contractor is not the agent of Company and is not authorized and shall not have the power or authority to bind Company or incur any liability or obligation, or act on behalf of Company. At no time shall the Independent Contractor represent that it is an agent of the Company, or that any of the views, advice, statements and/or information that may be provided while performing the Services are those of the Company.
(b) The Independent Contractor is solely responsible for directing and controlling the performance of the Services, including the time, place and manner in which the Services are performed. The Independent Contractor shall use its best efforts, energy and skill in its own name and in such manner as it sees fit.
(a) This Agreement does not create an obligation on Company to continue to retain the Independent Contractor beyond this Agreement’s termination. This Agreement may not be changed unless mutually agreed upon in writing by both parties.
(b) The Independent Contractor hereby agrees that each provision herein shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein.
(c) This Agreement contains the entire agreement between the parties hereto with respect to the transactions contemplated herein. The language of all parts of this Agreement will in all cases be construed as a whole in accordance with its fair meaning and not for or against either party.
(d) All notices provided for in this Agreement shall be given in writing and shall be effective when either served by hand delivery, electronic facsimile transmission, express overnight courier service, or by registered or certified mail, return receipt requested, addressed to the parties at their respective addresses as set forth at the beginning of this Agreement, or to such other address or addresses as either party may later specify by written notice to the other.
No Assignment. This Agreement shall inure to and be binding upon the undersigned and their respective heirs, representatives, successors and permitted assigns. This Agreement may not be assigned by either party without the prior written consent of the other party.
Governing Law. This Agreement shall be governed in all respects by the laws of the State of ___________________ without regard to the conflict of law provisions of such state. This Agreement shall be binding upon the successors and assigns of the respective parties.
Legal Fees. Should a dispute between the named Parties arise lead to legal action, the prevailing Party shall be entitled to any reasonable legal fees, including, but not limited to attorneys’ fees.
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile. email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Electronic Signatures. This Agreement and related documents entered into in connection with this Agreement are signed when a party’s signature is delivered electronically, and these signatures must be treated in all respects as having the same force and effect as original signatures.
Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
Captions for Convenience. All captions herein are for convenience or reference only and do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.
No Waiver. No waiver of or failure to act upon any of the provisions of this Agreement or any right or remedy arising under this Agreement shall be deemed or shall constitute a waiver of any other provisions, rights or remedies (whether similar or dissimilar).
Amendment. This Agreement may be amended only by a writing signed by all of the Parties hereto.
Entire Agreement. This Agreement constitutes the sole and entire agreement of the Parties regarding the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each Party hereto.
[Signatures on Following Page]
IN WITNESS WHEREOF, the undersigned have executed this Independent Contractor Agreement effective as of the ____________ day of ________________, 20__ (the “Effective Date”).
Independent Contractor agrees to provide the following services: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Independent Contractor shall be entitled to be reimbursed to the following expenses:
Independent Contractor shall submit an itemized statement to the Client. After Client’s review and approval, Client shall remit expense payment within thirty (30) days after receipt/approval.
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Frequently Asked Questions and Resources
What is a contract?
Contracts are defined as written or spoken agreements which are enforceable by law. They can cover any topic or industry, whether sales, tenancy, employment, or otherwise (source).
What are the different types of contracts?
There are many different types of contracts, as defined by upcounsell, those for fixed prices, employment, lump sums, time and materials, unilateral or bilateral contracts, simple contracts and more. Each has its own specific terms, and can either be oral or written and some are non-negotiable (like adhesion contracts) while others have room to be adjusted or amended.
What makes a contract different from an estimate, quote, bid, or proposal?
Mainly contracts are set and finite and legally binding, whereas estimates, quotes, bids, and proposals are possibilities which can be accepted, rejected, negotiated, or ignored altogether. The key difference is that often a bid or proposal will contain terms and conditions that can be signed by the requestor and turned into a contract (source).
What should I include in my contract?
Every contract is comprised of no less than two core components: clearly outlined terms and signed agreement between two separate parties. For more information, read our 12 clauses you should include in every contract.
How should I write an effective business contract?
Contract creation can be challenging, in most cases getting legal counsel is advised to ensure it will be legally enforceable should you require that. Essentially you need basic terms which should be abided by, and an agreement on what product or service is to be provided, to whom, by whom, and what will be tendered with specific terms (such as deadlines, or how the delivery will be completed). For more tips, read our beginners guide to contract writing.
What is the difference between a contract and an agreement?
An agreement is any understanding or arrangement reached between two or more parties. A contract is a specific type of agreement that, by its terms and elements, is legally binding and enforceable in a court of law, according to Diffen.com.
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