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How do I Write an Independent Contractor Agreement?

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  • Written By: Carol Luther
  • Edited By: A. Joseph
  • Last Modified Date: 01 December 2016
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When you elect to hire an independent contractor instead of an employee, or if you intend to work as an independent contractor, you will need to write an independent contractor agreement that spells out the details of your arrangement. The first issue that you must address is to make the agreement comply with the legal definition of an independent contractor. After your agreement matches these specifications, you will add the scope of work, the length of contract, the deliverables, a payment arrangement and legal redress options. Some independent contractor agreements provide terms for canceling or renewing the contract.

An independent contractor agreement needs to specify what is being bought from the contractor or the seller. No employer-employee relationship exists in this type of contract, so instead of a job description with duties, an independent contractor agreement contains a scope of work. This section details the length of the contract, with start and end dates, and the deliverables, or the products that the contractor agrees to create or the services that the contractor will perform.

Clarify that the contractor’s work product will meet specifications by indicating that the agreement is “work for hire.” After the business and the contractor agree to these terms, the product or service can be rejected if it does not meet specifications. Without this statement, an attempt to control the final product that is received from the contractor can put a business in a gray area that separates contractors from employees.

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The place of performance is an important element of an independent contractor agreement. It establishes the legal jurisdiction and helps satisfy the legal requirements that separate employees from independent contractors. Clearly spell out that the contractor provides his or her own equipment and tools and that the work performed will not take place on the business' premises. Without this clause, it could be ruled that an employer-employee relationship exists.

The terms of payment are essential in the agreement. Specify whether the contractor receives incremental payments or a lump sum and the approximate dates of the payments. If applicable, the agreement must indicate that the contractor is responsible for any taxes due.

The final piece of an independent contractor agreement is a section that details the rights and responsibilities of each party to the contract. Be sure to include these statements in case of disagreement. This helps guard against actions by the contractor that negatively affect the business, and vice-versa.

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Discuss this Article

nefret
Post 10

@popcorn - As an independent contractor, I definitely think it's fair game to question any vague or sketchy terms that may appear in the contract. Nobody should have to sign something like that if they're not entirely sure of the consequences. Can you give us an example of some of the types of vague terms that have cropped up in such agreements?

peabody
Post 9

@wander - You're right. The best way to go about it is to go through the entire contract with the employee so that both parties have a thorough understanding about what the employment agreement entails. This way there won't be any surprises or misunderstandings later on.

When I make up a new independent contractor form, I ask the other person if there is anything that they would like to add or modify. If it's within reason, then I make the changes. It helps to make them feel more involved in the agreement and reduces the chance of contractual disputes.

EricRadley
Post 8

@summing - I'm sure if you do an online search for independent contractor agreement samples or templates, you'll find several online. Of course, you can then modify them to suit your terms.

Just make sure to cover all your bases so that the contractor can't come back and claim benefits or additional payment that they are not meant to be entitled to.

popcorn
Post 7

I have been an independent contractor for several years as I generally work as a writer who takes on various projects. While being an independent contractor can have its benefits, such as not having to worry about being tied to any one position for longer than I would like, it is also stressful.

As an independent contractor it is important that your employer can provide you with a really well written independent contractor agreement that completely spells out everything you need to do and what your responsibilities are. I have come across some contracts that are so vague that I can only imagine the hassles that would have come up from signing them.

wander
Post 6

For those that are looking into making an independent contractor agreement it is really important to understand why you would rather have someone work in this way and not be a full employee.

Having spent a great deal of time abroad I have noticed that a lot of independent contractor agreements are made with the sole purpose of getting an employer out of paying benefits. Not only that it can also be a way to dodge taxes for an employee.

The worst thing is when your employee doesn't really understand what being an independent contractor means. I think it is an employer's responsibility to disclose what an employee gains and loses by being employed in this manner.

summing
Post 5

I have a small manufacturing firm and I want to hire a few independent contractors for a one time project I'm starting up. I want to do everything above board and I need to get legal documents for these new workers. Problem is that I have never seen an independent contractor form. Does anyone know a place where I could get a sample independent contractor agreement? Thanks for the help!

Ivan83
Post 4

I work as an independent contractor and it has both advantages and disadvantages. A lot of the advantages are never explicitly spelled out in the Independent Contractor Agreement, they just become apparent after you do this kind of work for long enough. Anyone who is thinking of working for themselves should know what they are getting into before they make the plunge.

I'll give you an example from my own job. I work as a medical courier and work as as an independent contractor through and established logistics company. I drive a lot for my job. But if I were to get hurt in a car accident and go to the hospital I would not get any benefits, not

workman's comp or medical reimbursement. I might even loose my job. I am not technically an employee of the company so they do not have the same obligations to me.

There are benefits too. All I'm saying is that ICs have to look beyond the contract to figure out what the work will really be like.

There are advan

tolleranza
Post 3

@snickerish - Being an independent contractor sounds adventurous and stressful! I love the idea of cutting out the middle man in my job but I am not yet ready to jump ship.

I do have a great quote for you guys who are thinking about taking the plunge, "Leap and a net will appear." Enjoy your leap.

snickerish
Post 2

@saraq90 - I am thinking along the same lines in my career...that the next step might just be to start contracting my services out since I have been working in my field for many years and I am beginning to feel confidence that I have happy customers that would seek out my services again.

I have begun the process by searching "independent contractor agreement form" and found a few for free (in fact I found a whole site dedicated to free legal documents). I will have to look them over, before I decide if I should go a step further and see if there are books on the subject or if I should seek some legal council.

Also funny

enough, I actually know a speech language pathologist that does contract herself out to a certain school (she has been there for years) but I don't know of her specific agreement with the school and I know she owns her own small practice.
Saraq90
Post 1

As a speech language pathologist you often have pathologists acting as independent from any business but they typically own their own practices. I know a few such individuals but I do not know any that independently contract themselves to the school system rather than just being hired by the school system.

This article has peeked my interest in trying to write an independent contractor agreement or employment agreement as the next step in my career. Would there be a place to get a free independent contractor agreement template on the internet or should I be reading a book on the subject?!

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