How to address IP rights in contractor agreements?

If you are considering using a template for your independent contractor agreement, you should view it as a starting point. It can be a good way of finding boilerplate provisions that are going to be in just about every agreement. Unfortunately, because they are templates, you run the risk of leaving out important details that may apply to your situation. Additionally, the template might not go far enough in protecting interests that you specifically need to have protected. Think of it this way. Template agreements are usually so general, they will probably be valid in almost every state. Consequently, by being general, they usually leave out key details that would apply in your situation but not in other contractors' situations. You should always consider having an attorney review your agreement to make sure that the agreement meets your legal needs and that it is legally binding in your state.

While an independent contractor agreement is not absolutely required to include terms and conditions regarding confidentiality, including such terms and conditions can help protect both the hiring party and the contractor. An independent contractor agreement that does not address confidential information can potentially exposes the contractor to unnecessary risk and liability. For example, the hiring party could claim that the contractor improperly disclosed or used its confidential information, although the parties have not agreed to what would constitute improper disclosure or use. If you have already signed an independent contractor agreement, you can attempt to negotiate an amendment to the agreement. A North Carolina attorney who is knowledgeable in independent contractor agreements and confidentiality clauses should be able to advise about amendments or even help negotiate additional or amended terms and conditions.

There are no set fees that are in an independent contractor agreement. Generally, what is covered are the fees or costs associated with the work or project and they may also include expenses incurred related to the work or project, such as travel and/or accommodations.

A non-disclosure agreement (sometimes called an "NDA," a "confidential disclosure agreement," or a "CDA") is a common component of an independent contractor agreement. Whether it is included in the independent contractor agreement or is a separate document does not, in and of itself, affect the enforceability or validity of an NDA. However, it must be clear how a separate NDA is part of an overall deal. An independent contractor with a valid and enforceable NDA is obligated to comply with its terms and conditions. For example, the NDA might prohibit the independent contractor from disclosing confidential information to others or might require the independent contractor to comply with certain standards for maintaining confidentiality. An independent contractor who violates an NDA could be liable to the other party for monetary damages. For example, the NDA might require the contractor to pay the other party a predetermined amount of money or a court could order the contractor to pay the other party another amount. A North Carolina attorney who is knowledgeable of independent contractor agreements and NDAs should be able to assist with these, whether they are combined or are separate documents. To best understand your obligations and responsibilities, consult with a knowledgeable attorney.

A business that hires an independent contractor should be careful not to confuse an independent contractor relationship with an employment relationship. Treating an independent contractor like an employee can result in the law ultimately determining that the contractor is actually a "misclassified" employee. In North Carolina, "performance metrics" typically apply to employees, not independent contractors. This is because the "independent" in "independent contractor" means that the hiring party does not "control" (manage, monitor, supervise, etc.) the contractor like it would an employee. The hiring party is entitled to hold the contractor accountable for the results that it hires the contractor to achieve. However, the independent contractor is entitled to determine the manner, means, and methods of achieving the desired results. With that all being said, it is important for the parties to an independent contractor relationship to have clear expectations. An independent contractor agreement should outline the essential terms and conditions of the engagement. These might include such terms as definitions of the deliverables, deadlines for the deliverables, remedies for the independent contractor's failure to produce the deliverables by the agreed-upon deadlines, and special considerations. A knowledgeable North Carolina attorney can advise on the legalities of the proposed terms and conditions of an independent contractor relationship that is to be governed by North Carolina law.