More and more companies are relying on independent contractors to save costs, get the work done fast and with perfection. It’s much easier to hire an outside resource without any hassle or use an employment form where you might be liable to bear the pension or medical expenses of the employees. The need for a formal independent contractor contract is no less for businesses hiring independent consultants or contractors.
Whether you are a contractor or freelancing individual that works on short-term or on-off contracts or projects with clients, you should always make a formal independent contractor agreement with terms agreeable to the other party and get it signed before commencing work.
While hiring people for your contractual requirements, please define their scope of service, terms of payment and deliverable schedule through formal and legally bound employment contracts. This will ensure both parties conduct their business without any confusion, problems or unreal expectations.
These days, independent contractors and clients can find a suitably modifiable and professional contractor agreement template online easily for their business needs. You do not need to pay fees and follow up with a legal expert to draft a contract for you to use.
When looking for independent contractor agreement templates, choose the ones written by legal experts as they will have clauses in the contract to protect your interest as a party.
Independent Contractor Agreement
An independent contractor agreement is a legally binding, formal agreement entered into between an independent contractor (freelancer) and a client(company) for the contract services desired.
The contractor contract template provides details to both parties about contract scope, deliverables, timelines set by both parties with regards to information, resource requirements, payment terms, schedule and limitations in case of any unfortunate event.
An independent contractor or a freelancer can be employed by a client company or an individual client for a single job, short term repetitive work or on a long-term cooperation depending on the contract needs.
Often, the need for an independent contractor is on-going whereas in other cases, it may only be needed once. Irrespective of the requirements, a legally binding contract ensures completion of work in desired budget, ensures timely and agreed upon payment to the worker.
What Is an Independent Contractor Agreement?
An independent contractor agreement often referred to as the freelance agreement or the free independent contractor contract is a mutually agreeable set of conditions signed by the contractor and the paying client.
The contractor agreement will generally define who the hirer and hiree is, the contract term, the payments to be made, the details of the work to be done and the requirement or permissions needed to complete the work.
You must work through the independent contractor agreements written by the professional lawyers only. These general contract templates are usually available free of charge or at a nominal charge through popular contract template providers online like CocoSign.
Get a Free Independent Contractor Agreement Now!
To avoid the consequences of not having a formal independent contractor agreement, you need a professional independent contractor agreement template to ensure the smooth operation of your business.
Put an end to legal disputes, avoid losses and unnecessary expenses, and build a reputable business with our editable template in PDF & Word.
When to Use an Independent Contractor Agreement?
An independent contractor agreement should always be used for any work in a non employer-employee relationship irrespective of the type of work or its duration to ensure quality work and timely payment.
So if you want to hire an independent contractor to save costs or get work done quickly from an expert instead of an employee use a formal independent contractor agreement template. The contract should categorically state that the person hired is not an employee and hence can be paid wages and benefits in accordance to the 1099 contract only.
Differences Between a Contractor and an Employee: Who Should You Hire?
A contractor works on an as needed basis both in the short-term or the long term without any pension and medical benefits. An employee on the other hand is a regular staff entitled to certain leaves, pension and medical benefits. People usually hire independent contractors because of their expertise, short term need or to save costs.
If your requirement is short-term or on an as-needed basis, you should hire an independent contractor against keeping regular employees and bear additional costs. Another advantage with independent contractors is that you can cancel their contract easily with some prior notice if they are not available consistently or are not performing up to your expectation.
But, if you need work to be done on premise for long-term or require people to access sensitive data, it is advisable to hire employees to work for you rather than contractors. This way, you can ensure they are available regularly and in a manner conducive to organisational work ethics.
These days, independent contractor agreements that are available online are written carefully by legal experts to ensure you are legally protected against any long-term liabilities as the paying party.
On the other hand, these contractor agreements also have clauses to protect the payment interests of the freelancer or contractor. If they have submitted their work in time, as per expectation and desire, you are liable to be paid without further delay or hassle in the previously agreed payment period.
Consequences of Not Using an Independent Contractor Agreement
An independent contractor agreement template legally outlines all the elements of a standard contract like service and payment details, names and addresses of signing parties, cancellation fee, benefits, waivers, indemnification clause, governing laws, warranties and so on. In addition, it also defines the limitations of the service buyer and seller against unrealistic expectations.
It additionally also lists clauses that define that it cannot be considered as a regular employee contract and saves the hirer from unnecessary legal hurdles related to the demand of any kind of employee benefits. If you are not working through an independent contractor agreement, you might risk losing your company details, sensitive data, intellectually protected information or unauthorized access to your premises, products, services or business platform.
If you do not work through a formal contractor agreement as a worker, you risk not being paid on time or losing your payment entirely. In short, service buyers risk their reputation and may have to bear financial loss if they do not hire a freelancer through the free independent contractor agreement document.
Get a Free Independent Contractor Agreement Now!
To avoid the consequences of not having a formal independent contractor agreement, you need a professional independent contractor agreement template to ensure the smooth operation of your business.
Put an end to legal disputes, avoid losses and unnecessary expenses, and build a reputable business with our editable template in PDF & Word.
FAQs
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Are free independent contractor agreement templates legally binding?
Yes, the formal contractor agreements that are written by expert lawyers are legally binding for both the service buyer and the service seller.
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Can a free independent contractor agreement be used as a regular employee contract?
No, the independent contractor agreement is not a substitute of an employee contract since the objective of both, the scope of work, binding clauses etc. are all different from each other.
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Can I modify an independent contractor agreement to my requirement?
Yes, you can easily add, edit or delete the standard template text of an independent contractor agreement to suit your specific work requirement.
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How to get a draft independent contractor agreement signed by the other party?
You can easily use an electronic signing service to get your contract signed by the other party fee of cost. All you have to do is to sign up for the service, upload the document, add your signature and details there, and send it from the signing software itself for the other party to sign.
Once the other party has signed it using his or her email account, the document is automatically filed in your electronic signature account for future reference.
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Can the independent contractor agreement be used for repair, replacement or equipment services?
An independent contractor agreement can be used for any non-employee type of contract services such as repair, consultation, modifications, installations or other tasks that you or the business needs to perform.
So, if you are looking to get work done from someone that you cannot do yourself or ask people in your company as a business owner because the costs associated with either of these are high, then you can hire a third party contractor to get it done.
However, you should always remember to work through independent contractor agreement templates that are freely available online for anyone to use after editing and adding their information.
CocoSign has numerous templates AVAILABLE for independent contractor agreement documents. Do check out and download the one that best fits your contract requirement. Our contract templates are easy to download, edit and sign and have been popular throughout the world for protecting the interests of all signing parties in a legal and fair manner.
DOCUMENT PREVIEW
INDEPENDENT CONTRACTOR AGREEMENT
I. The Parties. This Agreement is made between:
Client: ____________________ with a mailing address of ____________________, City of ____________________, State of ____________________, (“Client”)
AND
Contractor: ____________________ with a mailing address of ____________________, City of ____________________, State of ____________________ (“Contractor”).
WHEREAS the Client intends to pay the Contractor for Services provided, effective ____________________, 20___, under the following terms and conditions:
II. The Services. The Contractor agrees to perform the following: ________________________
____________________________________________________________________________.
Hereinafter known as the “Services”.
III. Payment. In consideration for the Services to be performed by the Contractor, the Client agrees to pay the following: (check one)
☐ - $____ / Hour.
☐ - $____ for the Services.
☐ - Commission in the amount of: __________________________________________.
☐ - Other: _____________________________________________________________.
Completion shall be defined as the fulfillment of Services as described in Section II in accordance with industry standards and to the approval of the Client, not to be unreasonably withheld.
The Contractor agrees to be paid: (check one)
☐ - At completion of the Services performed.
☐ - On a ☐ weekly ☐ monthly ☐ quarterly basis beginning on ____________________, 20___ until the completion of the Services.
☐ - Other. _____________________________________________________________.
IV. Due Date. The Services provided by the Contractor shall: (check one)
☐ - Be completed by ____________________, 20___.
☐ - Not have a due date.
☐ - Other. _____________________________________________________________.
V. Expenses. The Contractor shall be: (check one)
☐
- Responsible for all expenses related to providing the Services under this Agreement. This includes, but is not limited to, supplies, equipment, operating costs, business costs, employment costs, taxes, Social Security contributions/payments, disability insurance, unemployment taxes, and any other cost that may or may not be in connection with the Services provided Contractor.
☐ - *Reimbursed for the following expenses that are attributable directly to the Services performed under this Agreement: ___________________________________________.
*The Client will be required to pay the Contractor within thirty (30) days of any Expense after receiving an itemized expense statement from the Contractor. Upon request by the Client, the Contractor may have to show any receipt(s) or proof of purchase for said Expense(s).
VI. Liability Insurance (Minimum ($) Amount). The Contractor agrees to bear all responsibility for the actions related to themselves and their employees or personnel under this Agreement. In addition, the Contractor agrees to obtain comprehensive liability insurance coverage in case of bodily or personal injury, property damage, contractual liability, and cross-liability (“Liability Insurance”).
The minimum amount ($) for the Liability Insurance shall: (check one)
☐ - Be a minimum amount of combined single limit of $________________.
☐ - Not have a minimum amount required.
VII. Termination. This Agreement shall terminate upon the: (check one)
☐ - Completion of the Services provided.
☐ - Date of ____________________, 20___.
☐ - Other. _____________________________________________________________.
In addition, the Client or Contractor may terminate this Agreement, and any obligations stated hereunder, with reasonable cause by providing written notice of a material breach of the other party; or any act exposing the other party to liability to others for personal injury or property damage.
VIII. Option to Terminate. The Client and Contractor shall: (check one)
☐ - Have the option to terminate this Agreement at any time by providing ____ days’ written notice.
☐ - Not have the option to terminate this Agreement unless there is reasonable cause, as defined in Section VII.
IX. Independent Contractor Status. The Contractor, under the code of the Internal Revenue Service (IRS), is an independent contractor, and neither the Contractor's employees or contract personnel are, or shall be deemed, the Client's employees.
In its capacity as an independent contractor, Contractor agrees and represents: Contractor has the right to perform services for others during the term of this Agreement; Contractor has the sole right to control and direct the means, manner, and method by which the Services required by this Agreement will be performed. Contractor shall select the routes taken, starting and ending times, days of work, and order the work is performed; Contractor has the right to hire assistant(s) as subcontractors or to use employees to provide the Services required under this Agreement. Neither Contractor, nor the Contractor’s employees or personnel, shall be required to wear any uniforms provided by the Client; The Services required by this Agreement shall be performed by the Contractor, Contractor’s employees or personnel, and the Client will not hire, supervise, or pay assistants to help the Contractor; Neither Contractor nor Contractor’s employees or personnel shall receive any training from the Client in the professional skills necessary to perform the Services required by this Agreement; and Neither the Contractor nor Contractor’s employees or personnel shall be required by the Client to devote full-time to the performance of the Services required by this Agreement.
X. Business Licenses, Permits, and Certificates. The Contractor represents and warrants that all employees and personnel associated shall comply with federal, state, and local laws requiring any required licenses, permits, and certificates necessary to perform the Services under this Agreement.
XI. Federal and State Taxes. Under this Agreement, the Client shall not be responsible for:
Withholding FICA, Medicare, Social Security, or any other federal or state withholding taxes from the Contractor’s payments to employees or personnel or make payments on behalf of the Contractor; Make federal or state unemployment compensation contributions on the Contractor’s behalf; and the payment of all taxes incurred related to or while performing the Services under this Agreement, including all applicable income taxes and, if the Contractor is not a corporation, all applicable self-employment taxes. Upon demand, the Contractor shall provide the Client with proof that such payments have been made.
XII. Benefits of Contractor’s Employees. The Contractor understands and agrees that they are solely responsible for shall be liable to all benefits that are provided to their employees, including but not limited to, retirement plans, health insurance, vacation time-off, sick pay, personal leave, or any other benefit provided.
XIII. Unemployment Compensation. The Contractor shall be solely responsible for the unemployment compensation payments on behalf of their employees and personnel. The Contractor shall not be entitled to unemployment compensation in connection with the Services performed under this Agreement.
XIV. Workers’ Compensation. The Contractor shall be responsible for providing all workers’ compensation insurance on behalf of their employees. If the Contractor hires employees to perform any work under this Agreement, the Contractor agrees to grant workers’ compensation coverage to the extent required by law. Upon request by the Client, the Contractor must provide certificates proving workers’ compensation insurance at any time during the performance of the Service.
XV. Indemnification. The Contractor shall indemnify and hold the Client harmless from any loss or liability from performing the Services under this Agreement.
XVI. Confidentiality. The Contractor acknowledges that it will be necessary for the Client to disclose certain confidential and proprietary information to the Contractor in order for the Contractor to perform their duties under this Agreement. The Contractor acknowledges that disclosure to a third party or misuse of this proprietary or confidential information would irreparably harm the Client. Accordingly, the Contractor will not disclose or use, either during or after the term of this Agreement, any proprietary or confidential information of the Client without the Client's prior written permission except to the extent necessary to perform Services on the Client's behalf.
Proprietary or confidential information includes, but is not limited to: The written, printed, graphic, or electronically recorded materials furnished by Client for Contractor to use; Any written or tangible information stamped “confidential,” “proprietary,” or with a similar legend, or any information that Client makes reasonable efforts to maintain the secrecy of business or marketing plans or strategies, customer lists, operating procedures, trade secrets, design formulas, know-how and processes, computer programs and inventories, discoveries, and improvements of any kind, sales projections, and pricing information; and information belonging to customers and suppliers of the Client about whom the Contractor gained knowledge as a result of the Contractor's Services to the Client. Upon termination of the Contractor's Services to the Client, or at the Client's request, the Contractor shall deliver to the Client all materials in the Contractor's possession relating to the Client's business. The Contractor acknowledges any breach or threatened breach of confidentiality that this Agreement will result in irreparable harm to the Client for which damages would be an inadequate remedy. Therefore, the Client shall be entitled to equitable relief, including an injunction, in the event of such breach or threatened breach of confidentiality. Such equitable relief shall be in addition to the Client's rights and remedies otherwise available at law.
XVII. Proprietary Information. Proprietary information, under this Agreement, shall include:
The product of all work performed under this Agreement (“Work Product”), including without limitation all notes, reports, documentation, drawings, computer programs, inventions, creations, works, devices, models, work-in-progress and deliverables will be the sole property of the Client, and Contractor hereby assigns to the Client all right, title and interest therein, including but not limited to all audiovisual, literary, moral rights and other copyrights, patent rights, trade secret rights and other proprietary rights therein. Contractor retains no right to use the Work Product and agrees not to challenge the validity of the Client’s ownership in the Work Product;
Contractor hereby assigns to the Client all right, title, and interest in any and all photographic images and videos or audio recordings made by the Client during Contractor’s work for them, including, but not limited to, any royalties, proceeds, or other benefits derived from such photographs or recordings; and The Client will be entitled to use Contractor's name and/or likeness in advertising and other materials.
XVIII. No Partnership. This Agreement does not create a partnership relationship between the Client and the Contractor. Unless otherwise directed, the Contractor shall have no authority to enter into contracts on the Client's behalf or represent the Client in any manner.
XIX. Assignment and Delegation. The Contractor may assign rights and may delegate duties under this Agreement to other individuals or entities acting as a subcontractor (“Subcontractor”). The Contractor recognizes that they shall be liable for all work performed by the Subcontractor and shall hold the Client harmless of any liability in connection with their performed work.
The Contractor shall be responsible for any confidential or proprietary information that is shared with the Subcontractor in accordance with Sections XVI & XVII of this Agreement. If any such information is shared by the Subcontractor to third (3rd) parties, the Contractor shall be made liable.
XX. Governing Law. This Agreement shall be governed under the laws in the State of ____________________.
XXI. Severability. This Agreement shall remain in effect in the event a section or provision is unenforceable or invalid. All remaining sections and provisions shall be deemed legally binding unless a court rules that any such provision or section is invalid or unenforceable, thus, limiting the effect of another provision or section. In such case, the affected provision or section shall be enforced as so limited.
