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A Business’ Best Approach to Writing a Simple Independent Contractor Agreement

Do you work with contractors? If you do, an independent contractor agreement is an important legal document you should be using. However, many business owners understandably find it hard to write ✍️ or build a legal document. That’s why it is wise to have a simple independent contractor agreement sample at hand! 

Sections and topics in an agreement can vary depending on a number of factors. But if done well, an independent contractor agreement can make for an excellent working relationship with contractors! 🤝 Here’s how it works, along with an outline of the general sections to include in your agreement.

What’s an Independent Contractor Agreement? 

An independent contractor agreement is a binding document between the freelancer and the business owner. A carefully crafted independent contractor agreement provides legal protection to both parties along with their expectations of each other to avoid costly misunderstandings.

Here are some of the basic advantages of an independent contractor agreement

  • Provides legal security 🧑‍⚖️ and can prevent lawsuits
  • Determines the contractor’s roles and responsibilities
  • Outlines the services needed
  • Makes for a productive and healthy working relationship!

What Needs to be Included in an Independent Contractor Agreement?

When you put together an independent contractor agreement, it’s safe to assume that everything is going to be misunderstood 😕. That’s why the contract should be written in common terms and acceptable terms rather than solely “legalese.” A simple independent contractor agreement sample should contain the following sections in plain English. With these elements, your agreement can afford you all the benefits described above. 

Statement of Relationship

An important but easily overlooked section of an independent contractor agreement is defining roles. This is important for both parties. For you, it means protection against employee misclassification. For the contractor, it proves their independent contractor status for income taxes and financial reasons 💰.

Independent Contractor Status and Employment Benefits

This section clarifies that you have a contractual business relationship between the company and an independent contractor, not an employer-employee relationship. Without this section, the contractor may expect eligibility for benefits.

It is important to make it clear that they are not entitled to any employee benefits. This can include health insurance and other health benefits, pension, vacation entitlements, and other company benefits. You should outline that you have full discretion of how, when, and where the terms of the agreement are performed. Finally, make it clear that the contractor is responsible for providing the necessary tools needed to carry out their job if that’s the case👌.

Project Description

Next, it’s important that you are clear on the work itself 🏢. This helps put you and your contractor on the same page with the project at hand. You need to discuss any and all tasks and assignments that you expect the contractor to complete and be clear about how you want them to do it. It’s also ✅ a good idea to have some sort of backup plan in case there are setbacks. That way, you can get things working again as soon as possible 💪.

Payment and Billing Methods

Discussing payment terms with your contractor 🤑? It’s important to know in advance what you need and what will be the most you are willing to pay for a project. Discussing price and payment details can often be an uncomfortable situation. However, if you are prepared and sure of yourself, you and your contractor can reach an agreement 🤝.

It also doesn’t hurt to mention how you want the billing to go and the amount of time your contractor would prefer to receive their payment after sending you an invoice. Just make sure that your payment terms are reasonable.

Responsibilities of Each Party

Clearly demarcate what each party has to bring to the table. It’s good to set up a way for the contractor to communicate with you on their progress that works best for you 💯. If you need contractors to provide insurance coverage before hiring them, you should include that in the agreement. It can be a big help down the line!

Timelines and Deadlines

If you need your contractor to complete your job within a period of time, make sure to mention the length of the business relationship in the independent contractor agreement. The contractor can give you a timeline⏲️ if they don’t know exactly how long it will take.

You can outline deadlines for confirmed tasks and discuss exactly what you expect your contractor to deliver at these times. It helps to discuss what completing the task or job. By setting attainable goals, you allow the contractor to work efficiently and make progress a lot faster. You should also mention the time of termination ❗️❗️ of the contract (see below).

Termination

This is a very important section that you must include in your agreement in case there is a breach of contract. This section outlines🧾 the rights of both parties to terminate the independent contractor agreement. It also dictates things that can lead to termination such as property damage, breach of contract, or any subsequent breach of the basic terms of the contract.

Non-Disclosure Clause or Confidentiality Clause

This section prevents a contractor or any of their employees from sharing trade secrets or inside information 📚 about their client with their competitors. It’s meant, as the name suggests, to help you avoid confidentiality issues and protect intellectual property rights. It’s supposed to uphold a commitment to confidentiality.

It can be difficult for contractors to agree to this 😬 because they need to work with different clients. If they cannot agree to a confidentiality agreement, then you can find some sort of middle ground or refrain from hiring them altogether.

Help With Your Agreement

Setting up an independent contractor agreement using a simple independent contractor agreement sample is a great way to start a working relationship. By discussing expectations, your contractor will know what to expect. Once everyone is on the same page, you both can proceed with trust and confidence in your entire agreement! 🕺

Starting an independent contractor contract or freelance contract is possible with a simple independent contractor agreement sample. However, mistakes happen, and with a binding document, those mistakes can be costly. Instead of going at it on your own, consider the help of an online attorney!

Ian Corzine and his team will help you with the necessary guidance and advice you need to write a solid agreement. Our independent contract agreement template is fully customizable, and our legal experts will review it for you. Don’t waste any more time; contact 📞 Ian Corzine and his team of professionals today🏆!