Independent Contractors: A Sample Agreement
A written independent contractor agreement can be essential to document the mutual understanding between you and the contractor that the person is not an employee. Below is a sample general agreement that you can use. A word of caution: Before using the form, be sure to consult with your lawyer to make sure it meets the unique needs of your situation, and always do a careful evaluation to make sure that the independent contractor classification is accurate.
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Sample Independent Contractor Agreement
This will confirm your agreement with us regarding [insert general description of work to be performed] you will undertake for us. The formal details are listed below to avoid any confusion or misunderstandings in the future.
1. Parties: This Agreement is between ____________________ (referred to as “Company” in this Agreement), and whose principal place of business is _____________________ and _____________________ (referred to as “Contractor” in this Agreement), whose principal place of business is ____________________________.
2. Term of agreement: This Agreement becomes effective on [insert date]. [This Agreement will terminate on [insert date, if applicable]].
3. Work to be performed: Contractor agrees to perform the following services: [insert description]. For simplicity, Contractor’s services will be referred to as “Work” in this Agreement. [If appropriate, add: Contractor’s Work includes, but is not limited to, all original works of authorship, including designs, layouts, computer codes, creations, formulas, processes, know-how, techniques, inventions and all other information, upgrades, improvements or items created by Contractor for Company during the term of this Agreement.]
4. Fees: Company agrees to pay [insert fixed amount] for the services Contractor performs according to the terms set out below. [OR] Contractor will submit an invoice each month that services are performed. The invoice will include an invoice number and a brief description of services. All fees are payable within [insert terms such as “30 days after invoicing and satisfactory completion of services”]. Contractor’s fees will be based on a rate of [insert payment rate based on time or project].
5. Expenses: Contractor will be responsible for all expenses in performing the Work specified in this Agreement including, but not limited to, overhead, license fees, memberships and dues, travel expenses, meals, insurance premiums, and any salary or other compensation paid to Contractor’s employees or contract workers.
6. Independent contractor: Contractor is engaged in an independent business with a substantial investment in Contractor’s own business and equipment. Contractor is not Company’s employee and does not receive training from Company. Contractor acknowledges that Company does not supervise or control Contractor’s work in any manner. Therefore, Contractor has the sole right to control and direct the means, manner and method by which the Work required by this Agreement will be performed. Contractor sets [his/her] own work hours and works at [his/her] office or any other place Contractor chooses. Contractor performs work for other companies and has the right to continue to do so.
Contractor will furnish all equipment, labor and materials needed for the Work required by this Agreement. Contractor has the right to hire assistants as subcontractors, or to use employees to do the Work. Contractor’s employees or contract personnel are not employees of Company. Contractor is solely responsible for all wages, costs, and expenses of such employees or contract personnel and has the sole and exclusive right to supervise and control them. Company will not require Contractor or Contractor’s employees or contract personnel to devote full time to performing the Work required by this Agreement.
7. Benefits: Contractor understands that neither Contractor nor Contractor’s employees or contract personnel are eligible for workers’ compensation or unemployment insurance benefits from Company, and therefore will not apply for such benefits. Also, neither Contractor nor Contractor’s employees or contract personnel may participate in any employee pension, profit sharing, stock option, health, vacation pay, sick pay or other benefit plan of Company.
Contractor further agrees that in the event a court or government agency later determines that Contractor is an employee rather than an independent contractor, Contractor waives any right to recover, and promises not to seek, employee benefits of any kind to which an employee would have been entitled during the period prior to the court or agency’s ruling.
8. Workers’ compensation: If Contractor hires others to perform any work under this Agreement, Contractor will cover them with workers’ compensation insurance and provide Company with a certificate of coverage. [optional: Contractor will also obtain workers’ compensation coverage for [himself/herself] if Contractor is not a corporation.]
9. Taxes: Since Contractor is an independent business, Contractor is responsible for and will timely pay all income, Social Security, self-employment, unemployment and other taxes that may be due as a result of payments to Contractor under this Agreement. Upon request, Contractor will provide Company with proof that such payments have been made. No taxes will be withheld from Company’s payments to Contractor. Contractor will complete an IRS Form W-9 certifying that Contractor is not subject to backup withholding. Company will provide Contractor with an IRS Form 1099 at the end of each year showing all fees paid to Contractor during the year. In the event of an audit, Contractor agrees to promptly cooperate with Company and provide copies of Contractor’s state and federal income tax returns, and other documents as Company may reasonably request.
10. Business permits, certificates and licenses: Contractor agrees to comply with all federal, state and local laws requiring business permits, certificates and licenses necessary to perform the Work described in this Agreement.
11. Liability insurance: Contractor agrees to maintain a liability insurance policy of at least [insert amount] to cover any negligent acts committed by Contractor or Contractor’s employees or agents while performing services under this Agreement. Contractor will provide a copy of the declarations page of the policy to Company. Contractor also agrees to have Company named as an additional insured under the policy, if Company so requests.
12. Assignment of intellectual property ownership: Contractor hereby assigns and transfers to Company all of Contractor’s rights in the Work. The rights assigned include, but are not limited to, all title and interest in all copyright, trademark, patent and any other proprietary rights. Contractor will assist Company if necessary, at no additional cost to Company except for reasonable out-of-pocket expenses, in obtaining and enforcing all copyrights and other intellectual property rights.
If Contractor hires employees or contract workers to assist Contractor in completing the Work, Contractor will, as soon as practical, provide Company with each person’s name, address and telephone number. Contractor is responsible for obtaining an assignment from each person, in writing, of all intellectual property rights in the Work to Company in a form to be approved by Company.
13. Confidentiality: In the course of Contractor’s relationship with Company, Contractor may have access to confidential trade secret information (referred to in this Agreement as Confidential Information) including, but not limited to, formulas, customer lists, designs, processes, inventions, methods, business strategies, plans, and operations. All of the Confidential Information will remain the sole property of Company and will not be used or duplicated by Contractor except in connection with the Work to be done by Contractor under this Agreement. Contractor will keep the Confidential Information in the strictest confidence and will not disclose it by any means to any third party, except with Company’s prior written approval, and only to the extent necessary to do the Work. Contractor may disclose the Confidential Information to [his/her/its] employees or contract personnel only to the extent necessary to do the Work and only after they have agreed in writing to the provisions of this Paragraph. Upon termination of this Agreement, Contractor will return to Company all of the Confidential Information in Contractor’s possession, including computer files, written documents and notes, and will cease to make any further use of it. Contractor’s obligations under this Paragraph will remain in effect during the term of this Agreement and will continue after its termination.
14. Termination: This Agreement may be terminated at any time, with reasonable cause, by giving written notice to the other party. [OR] This Agreement may be terminated with or without cause, by giving [insert number] days’ written notice to the other party.
15. No partnership or agency: This Agreement does not create a partnership or agency relationship between Company and Contractor. Contractor does not have authority to enter into contracts on behalf of Company without separate written approval from Company.
16. Binding effect, entire agreement, modifications, waiver: This Agreement will be binding on the heirs, successors and assigns of the parties. It may not be assigned without the written consent of both parties. This is the entire agreement between Company and Contractor. It supersedes all prior agreements, if any. It can only be changed by a written agreement signed by Company and Contractor. If any part of this Agreement is deemed unenforceable, the remaining portions will continue in full force and effect. A waiver of a breach of any portion of this Agreement will not be considered to be a waiver of any future breaches. This Agreement will be governed by California law.
By signing below, Contractor and Company acknowledge and agree to the terms set out in this Agreement.
By: Name Printed _______________________________________
By: Name Printed _______________________________________