8 Things to Include in an Independent Contractor Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,656 reviews

Jump to Section

Need help with a legal contract?

Post Project Now

An independent contract agreement is a contract between a freelancer and a company or client outlining the specifics of their work together. Companies use it as a way to set expectations, clarify roles, and use appropriate documents for taxes and record-keeping purposes.

Legally, a 1099 independent contractor must still file taxes for any income they earn as an independent worker. This is why the 1099 employee form is important on top of an independent contractor agreement.

Here are 8 things you should always include in an independent contractor agreement when hiring an independent contractor or signing a contract as a freelancer.

1. Parties Involved

Start the document by describing the independent contractor and to whom they will provide services. For example, a contractor may work for an individual, or they could offer their services to a company on a freelance basis.

2. Time Frame of Project

Because they are not employees, companies cannot mandate working hours or schedules for independent contractors. However, they can require a schedule for their project.

Establish a time frame for the services and set a deadline for any deliverables.

The time and length of the project are important features that will make the contract legally binding.

Without a specified time and end date, it will become more difficult for either party to request payment or services when needed.

Here is an article about independent contractors and how they work.

3. Service Details

A self-employed person or business entity must describe the services they will provide for a company. Likewise, a company issuing a contract may outline the services they are hiring the contractor to perform.

To comply with independent contractor tax laws, the company must provide a 1099 independent contractor form for services exceeding $600.

The 1099 form is not the same as an independent contractor agreement. The agreement is the contract that outlines things such as:

  • The scope of services
  • The project timeline
  • The terms and conditions of the agreement
  • Payment terms

Keep the description of services simple and straightforward. Avoid generalizations like “marketing services” or “web design.” Instead, explain what specific tasks each service package includes.

Here is an article with types of independent contractor services.

Meet some lawyers on our platform

Kristen R.

27 projects on CC
View Profile

Anand A.

9 projects on CC
View Profile

George L.

1 project on CC
View Profile

Jeremiah C.

37 projects on CC
View Profile

4. Compensation

Describe payment terms for the contractor. For example, they may be paid upfront, receive a partial payment at the contract's start, or require a deposit for their services.

Some independent contractors work on an ongoing basis, so they receive monthly payments similar to that of an employee.

However, there are many distinctions between an independent contractor vs. employee payment rights. For example, the employer does not have to provide a freelancer or contractor benefits like health insurance. They can also choose to pay them for a service outright or hourly.

As for whether you can pay an independent contractor hourly or per diem, the answer varies by industry, service, and individual contractor. In addition, the independent contractor agreement cost will vary based on the length of the project and contractor’s rates.

The best thing for all parties involved is to be clear in the agreement about how much the contractor will be paid when they will be paid, and how they will receive payment.

Here is an article about the best ways to pay independent contractors.

5. Confidentiality

Because an independent contractor may have a working arrangement that grants them access to company data, confidentiality clauses are important.

A confidentiality agreement can protect certain parts of the project or company’s operations.

Here is an article about what you need to know about confidentiality clauses.

6. Termination Clause

You may sometimes give yourself or the contractor the right to terminate your agreement early. In addition, other circumstances, such as a breach of contract or failed deliverables, can grant the hiring party the right to terminate their agreement.

Likewise, failure to pay or respond within a certain timeframe can give the freelancer the right to terminate the agreement.

While outside circumstances may influence the outcome of a project, there should be measures in place to protect both parties’ best interests.

You can also state that the contract will expire, e.g., naturally terminate, once the client has received work and fully paid the independent contractor.

Here is an article on termination clauses in contracts.

7. State of Governance

You should specify which state governs the terms and conditions laid out in the contract. This is especially relevant if the independent contractor and hiring party live in different states.

A state of governance can significantly impact a party’s ability to file or win a lawsuit. For example, the governing laws in your state may protect you in ways the freelancer’s state does not.

It is easy to state the governing jurisdiction. For example, you may write something such as:

“By signing this agreement, all parties agree to adhere to the laws and regulations of the United States of America, and the state of Massachusetts”

Here is an article about governing law in contracts.

8. Signatures of Parties

Contracts are not legally binding unless competent parties sign them.

Legal signatures can be signed in person or remotely through a secure electronic signature service.

An e-signature allows someone to type their name on an electronic document and submit it, rather than physically signing anything in ink.

Be sure to date all signatures, whether done in person or electronically.

Here is an article on electronic signatures and legality in the United States.

Post a project in ContractsCounsel’s marketplace to receive flat fee bids from lawyers for your project. All lawyers have been vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

View Nichole
Member Since:
October 22, 2021

Nichole C.

Free Consultation
Get Free Proposal
16 Yrs Experience
Licensed in KY
University of Louisville, Brandeis School of Law

Licensed attorney in KY and Federally JD, 2006 University of Louisville MBA, 2006 University of Louisville BS, 2001 Berea College Licensed Title Agent Arbitrator and Certified Mediator Business Consultant Adjunct Professor, Law and Business

View Orin
Member Since:
October 23, 2021

Orin K.

Free Consultation
Get Free Proposal
New York
18 Yrs Experience
Licensed in NY
New York Law School

I'm an employment lawyer. I counsel and represent employees in all professions, from hourly workers to doctors and all in between. I also counsel and represent employers in many aspects of employment law.

View Michelle
Member Since:
January 24, 2022

Michelle F.

Free Consultation
Get Free Proposal
New York
4 Yrs Experience
Licensed in NY
Touro College Jacob D. Fuchsberg Law Center

I provide comprehensive legal and business consulting services to entrepreneurs, startups and small businesses. My practice focuses on start-up foundations, business growth through contractual relationships and ventures, and business purchase and sales. Attorney with a demonstrated history of working in the corporate law industry and commercial litigation. Member of the Bar for the State of New York and United States Federal Courts for the Southern and Eastern Districts of New York, Southern and eastern District Bankruptcy Courts and the Second Circuit Court of Appeals. Skilled in business law, federal court commercial litigation, corporate governance and debt restructuring.

View Abhijit "Beej"
Member Since:
October 25, 2021

Abhijit "Beej" D.

Managing Director
Free Consultation
Get Free Proposal
Boston, MA
22 Yrs Experience
Licensed in MA, NY
University of Michigan Law School

Beej serves as counsel to innovators and entrepreneurs in a wide array of legal and business matters worldwide.

View Steve
Member Since:
October 26, 2021

Steve C.

Principal | Attorney
Free Consultation
Get Free Proposal
23 Yrs Experience
Licensed in CA
Loyola Law School

I am a corporate and business attorney in Orange County, CA. I advise start-ups, early-growth companies, investors, and entrepreneurs in various sectors and industries including technology, entertainment, digital media, healthcare, and biomedical.

View Lolitha
Member Since:
October 26, 2021

Lolitha M.

Free Consultation
Get Free Proposal
Homewood, IL
1 Yr Experience
Licensed in AL
UIC John Marshall Law School

Small firm offering business consultation and contract review services.

View Scott
Member Since:
October 26, 2021

Scott S.

Free Consultation
Get Free Proposal
New York, NY
15 Yrs Experience
Licensed in NY
Benjamin Cardozo School of Law

Scott graduated from Cardozo Law School and also has an English degree from Penn. His practice focuses on business law and contracts, with an emphasis on commercial transactions and negotiations, document drafting and review, employment, business formation, e-commerce, technology, healthcare, privacy, data security and compliance. While he's worked with large, established companies, he particularly enjoys collaborating with startups. Prior to starting his own practice in 2011, Scott worked in-house for over 5 years with businesses large and small. He also handles real estate leases, website and app Terms of Service and privacy policies, and pre- and post-nup agreements.

View Oscar
Member Since:
October 28, 2021

Oscar B.

Free Consultation
Get Free Proposal
Saint Petersburg, FL
20 Yrs Experience
Licensed in FL
Stetson University, College of Law

Oscar is a St. Petersburg native. He is a graduate of the University of Florida and Stetson University, College of Law. A former US Army Judge Advocate, Oscar has more than 20 years of experience in Estate Planning, Real Estate, Small Business, Probate, and Asset Protection law. A native of St. Petersburg, Florida, and a second-generation Gator, he received a B.A. from the University of Florida and a J.D. from Stetson University’s College of Law. Oscar began working in real estate sales in 1994 prior to attending law school. He continued in real estate, small business law, and Asset Protection as an associate attorney with the firm on Bush, Ross, Gardner, Warren, & Rudy in 2002 before leaving to open his own practice. Oscar also held the position of Sales & Marketing Director for Ballast Point Homes separately from his law practice. He is also a licensed real estate broker and owner of a boutique real estate brokerage. As a captain in the US Army JAG Corps, he served as a Judge Advocate in the 3rd Infantry Division and then as Chief of Client Services, Schweinfurt, Germany, and Chief of Criminal Justice for the 200th MP Command, Ft. Meade, Maryland. He is a certified VA attorney representative and an active member of VARep, an organization of real estate and legal professionals dedicated to representing and educating veterans. Oscar focuses his practice on real small business and asset protection law.

View Rachael
Member Since:
October 28, 2021

Rachael D.

Free Consultation
Get Free Proposal
New York
10 Yrs Experience
Licensed in NY
Touro Law

We help simplify every transaction and provide a superior level of customer service to create long lasting and trusted relationships with our clients. Our goal is to guide our clients with practical and zealous legal representation and eliminate the difficult nature of any legal transaction.

View Gamal
Member Since:
October 31, 2021

Gamal H.

Free Consultation
Get Free Proposal
New York City
24 Yrs Experience
Licensed in NY
New York Law School

I am a commercial contracts attorney with twenty years of experience. I have represented major corporate clients including Amazon, Marvel, and Viacom as well as independent entertainment professionals and technology startups.

View Yoann E. A.
Member Since:
October 29, 2021

Yoann E. A. L.

Free Consultation
Get Free Proposal
3 Yrs Experience
Licensed in CA
Concord Law School at Purdue University Global

For over 15 years, I accumulated both hands-on technical and business experience as an IT engineer and entrepreneur, enabling me to understand your challenges probably better than anyone else on the legal market! My California-based full-online practice focuses on: - Intellectual Property (Copyright / Trademarks) - Privacy / Data Protection - Commercial matters (e.g. service contracts) - Corporate (e.g. incorporation, restructuring)

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call