Free Independent Contractor Agreement

An independent contractor agreement is a contract between an employer (whether an entity or an individual) and an independent contractor (whether an entity or individual) for the provision of services.

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Suppose your business needs to hire some outside help for a particular project. When you want to engage an individual or company, you will need to have a written contract that clearly defines the contractor's role and your expectations. You may want to create an Independent Contractor Agreement.

Using an Independent Contractor Agreement will help you clarify all the terms of the hiring arrangement and protect both parties from future possible disputes or misuse.

Frequently Asked Questions

 

 

An independent contractor agreement is a legally binding document between an employer and a non-permanent employee/independent contractor that outlines the terms by which the contractor is being hired. 

 

 

Whether you are a business owner or private client, you would use an independent contractor agreement if you were hiring a temporary, or “Non-W-2,” employee to work on a specific job or project. The agreement outlines the terms of the job and clearly defines the role of the employer and the contractor, and offers legal protection for both parties involved.

 

 

Although it gives you less control over how a party conducts their tasks, hiring an independent contractor is typically a more cost effective and simple process than hiring a new employee. The independent contractor arrangement is also the best suited for relatively short terms of employment. 

 

Although the independent contractor and employee may functionally act the same, they differ in the following aspects:

  • Payroll Tax Deductions – Employers are responsible for making the appropriate income and social security taxes for employees. Independent contractors are responsible for this themselves. Additionally, a 1099 is used to report payments to an independent contractor, while a W2 is used for employees.

  • Benefits – Independent contractors are not eligible for the benefits offered by the employer to their employees.

  • Workers’ Compensation/ Unemployment Compensation – Unlike employees, independent contractors are not automatically covered by workers’ compensation or unemployment compensation.

  • Performance and Control – Employers have a great deal of control over their employees’ schedules, work performance and output. In contrast, independent contractors set their own hours and methods for performing assigned tasks.

  • Non-Exclusivity – The employer engages the independent contractor with the knowledge that they may take on other clients and tasks during their relationship.

 The independent contractor agreement is fairly straightforward and includes:

  • Recitals: This section describes the who, when and why of the agreement.

  • Terms of Engagement: The agreement proceeds to describe the substantive terms of the independent contractor arrangement, such as the required services, the term of engagement, covenants of confidentiality, amount of compensation, and method of termination.

  • General Provisions: The second article of the agreement contains terms ensuring the document’s validity and describing how disputes will be resolved.

  • Signatures: Each party must sign the agreement for it to be legally effective.

  • Fee Schedule: If the contractor will be paid in multiple installments, a fee schedule will be attached to the agreement.

Who are the parties to this agreement? 

This agreement is designed for use by an employer and an independent contractor. 


 The agreement will be in effect as of the date you specify in the recital section.

 

The purpose of the agreement is to create the independent contractor-employer relationship between the parties.

 

As long as the agreement has not expired, the employer and contractor may expand the scope of the services provided by mutual written agreement.

 

You may set an expiration date for the agreement that will result in termination of the contractor unless both parties mutually agree to extend the term.

Regardless, the agreement may be terminated at any time by either party by providing written notice to the other party. The termination will only be effective after the specified notice period has elapsed.

 Payments to the contractor can be made as hourly wages, installments, or a lump sum. 

 A business may lose its competitive edge if confidential information is disclosed to other businesses or the public at large.

Because there is a possibility that some confidential or privileged information may be disclosed to the contractor during the contracted work period, it is wise to include stipulations in the agreement that forbids the contractor from misusing or leaking such information.

The covenants not only provide peace of mind for the employer, but also gives basis for legal recourse in case the contractor violates this part of the agreement.

 

Our propriety form generator will assist you in creating your customized Independent Contractor Agreement within minutes. Answering the questions is not complicated – you only fill in the requested information and we will put it together for you.

Once you complete the questionnaire and place your order, it will be available for immediate download in either PDF or Word document from your secure online account including a step-by-step guide on how to use your document. 

 

Generally, an independent contractor agreement does not need to be notarized – you only need to sign the document to make it legally enforceable. A witness may be helpful if any party attempts to contest the document, but a notary is not necessary.

 

Please Note: The use of a notary ensures that no one challenges any signatures later and is a secure way to firmly establish the effectiveness of your document.