Who is this article for?
Employers in need of guidance on what to include for independent contractor agreements/contracts.
The contract between an independent contractor and a client is necessary to provide protection to both parties and establish clear expectations throughout the working relationship.
Before entering into a contract, ensure that the relationship truly is an independent contractor relationship and not an employee relationship.
It’s important to include the following items in your agreement:
1. Description of the Relationship - Make sure that the contract clearly states that the individual is working as an independent contractor. There also should be a statement that clarifies that since they are contracted, they are not eligible for employee benefits, such as but not limited to retirement benefits, health insurance, vacation, paid time off, sick leave, etc.
2. Project Scope - This includes a detailed description of any and all tasks and deliverables involved in the project. The nature of the work needs to be described in detail.
3. Project Timeline and Deadlines - Include concrete deadlines for the deliverables, milestones, and what would constitute one. The length of the working relationship between the client and the independent contractor also needs to be listed.
4. Responsibilities and Obligations - Include how to communicate the progress of the project and who the points of contact are for each phase.
5. Payment and Billing Terms - Include fees, if any, deposits, amount of time the client must pay an invoice once it is issued.
6. Termination Conditions - Set the expectation(s) for termination. Typically either party can terminate the agreement with or without notice, depending on the circumstances.
7. Intellectual Property Clauses - Defines ownership of patents, copyrights, and trademarks and which party retains ownership.
8. Restrictive Covenants - Non-disclosure, confidentiality, and non-compete clauses are some of the most common. If any restrictive covenants are needed, describe them in detail and what constitutes each restriction.
9. Dispute Resolution Process - This section provides clarity on how any disagreements will be handled during the working relationship and whether conflicts will be resolved internally or through a third-party mediation service. This provides peace of mind to both parties, and for clients, it shows good-faith intentions towards the independent contractor.
An important part of this section is the jurisdiction of where any disputes will be handled. You will want the jurisdiction to be in a region you are comfortable with and could find legal representation if needed.
The above sections are recommendations for your contract or agreement. Check your country, region, or state requirements to ensure you are including everything to protect yourself or your organization.
Required clauses in the UK are:
- Independent contractor clause - You must specifically state that the working relationship is as an independent contractor.
- Non-disclosure clause or NDA
- Intellectual property clause
- Termination clause
Be sure to search for and only use a contract(s) or a contract template made for your specific region/state. For example, search for "independent contractor template Colorado."