The Independent Contractor Agreement: Elements, example, and optional clauses
What is an Independent Contractor Agreement?
An Independent Contractor Agreement is a legal contract between a business or person hiring an independent contractor for services and the contractor providing the services. The agreement outlines the scope of work, payment terms, and expectations for the project. It also clarifies the independent contractor’s role as an independent business entity, rather than an employee. This type of agreement helps to protect both parties by setting clear expectations, establishing the terms of the work relationship, and limiting potential legal disputes.
What are the elements of a typical Independent Contractor Agreement?
- Introduction: This section identifies the parties to the agreement and their roles.
- Scope of Work: This section outlines the specific services the independent contractor will provide to the client, including any deliverables, milestones, or deadlines.
- Payment Terms: This section specifies the compensation the independent contractor will receive for their services, including the hourly rate or project fee and any payment schedule or invoicing requirements.
- Independent Contractor Status: This section clarifies that the independent contractor is not an employee of the client and is responsible for their own taxes, insurance, and other business expenses.
- Confidentiality: This section outlines the obligations of both parties to keep confidential information confidential, including trade secrets, customer data, and other proprietary information.
- Intellectual Property: This section addresses ownership of intellectual property, including copyrights, patents, and trademarks.
- Termination: This section outlines the conditions under which either party can terminate the agreement, including breach of contract, bankruptcy, or other events.
- Indemnification: This section specifies the obligations of the independent contractor to indemnify and hold harmless the client for any damages, losses, or claims arising from their work.
- Representations and Warranties: This section outlines the representations and warranties made by both parties, including the independent contractor’s qualifications and experience.
- Governing Law: This section specifies the governing law and jurisdiction that will apply to the agreement, including choice of law and choice of forum.
The following boilerplate template can be used on SimpleSignRequest.com
Independent Contractor Agreement
This Independent Contractor Agreement (the “Agreement”) is made and entered into on [date] (the “Effective Date”), by and between [Client Company], a [State] corporation with its principal place of business at [address] (“Client”), and [Contractor Name], an individual with a mailing address of [address] (“Contractor”).
Contractor agrees to perform the following services for Client (the “Services”): [description of Services].
Client shall pay Contractor for the Services as follows: [payment terms].
- Relationship of Parties
Contractor shall perform the Services under this Agreement as an independent contractor, and not as an employee or agent of Client.
Contractor agrees to keep all information related to Client’s business confidential, and to not disclose such information to any third party, except with Client’s written consent.
- Intellectual Property
Any intellectual property created by Contractor in the course of providing the Services to Client shall be owned by Client.
Either party may terminate this Agreement at any time, with or without cause, upon written notice to the other party.
Contractor shall indemnify and hold harmless Client from any and all claims, damages, and expenses arising out of Contractor’s performance under this Agreement.
- Representations and Warranties
Contractor represents and warrants that they have the necessary qualifications and experience to perform the Services.
- Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without giving effect to any choice of law or conflict of law provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
By: [Client Representative Signature]
Title: [Client Representative Title]
By: [Contractor Representative Signature]
Title: [Contractor Representative Title]
What are some optional clauses that might typically be included in an Independent Contractor Agreement?
- Confidentiality clause: This clause outlines the confidential information that the independent contractor will be exposed to and requires the contractor to keep such information confidential.
- Non-compete clause: This clause restricts the independent contractor from working with or for a competitor of the client for a specified period of time after the termination of the agreement.
- Termination clause: This clause outlines the circumstances under which the agreement can be terminated by either party.
- Intellectual property clause: This clause specifies who owns the intellectual property created by the independent contractor during the course of the agreement.
- Insurance clause: This clause requires the independent contractor to maintain certain types of insurance coverage during the term of the agreement.
- Payment clause: This clause specifies the payment terms, including the rate of pay, invoicing procedures, and the frequency of payment.
- Governing law and jurisdiction clause: This clause specifies the governing law that will apply to the agreement and the jurisdiction where any disputes will be resolved.
- Representations and warranties clause: This clause outlines the representations and warranties made by both parties regarding their authority, capacity, and compliance with laws.
What are some other clauses I might want for an Independent Contractor Agreement?
- Scope of work: This clause defines the scope of work to be performed by the contractor.
- Indemnification clause: This clause requires the contractor to indemnify and hold the business harmless from any claims or liabilities arising from the contractor’s work.
- Dispute resolution clause: This clause outlines the procedures for resolving any disputes that may arise under the agreement, such as mediation or arbitration.
It’s essential to consult a legal professional to determine which clauses are appropriate for your specific situation and to ensure that the agreement complies with all applicable laws and regulations.