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What Is an Independent Contractor Agreement?
An independent contractor agreement is a contract between a freelancer and a company or client outlining the specifics of their work together. This legal contract usually includes information regarding the scope of the work, payment, and deadlines. The agreement might also provide guidance regarding any confidentiality requirements, insurance, and indemnification.
Independent contractor agreements go by many names, including:
- Independent Contractor Contracts
- Subcontractor Agreement
- Freelance Contractor Agreement
- Contract Labor Form
- Consulting Agreement
- Freelance Contract
- General Contractor Agreement
- Consulting Services Agreement
What Are the Elements of an Independent Contractor Agreement?
Most independent contractor agreements include the following information at a minimum:
Some contracts require additional clauses and information. You can customize an independent contractor agreement to meet the specific needs of your project.
What Is the Purpose of an Independent Contractor Agreement?
Independent contractor agreements serve to protect all parties involved in the transaction. The contract sets clear expectations for the work and end product and provides legal protections for the independent contractor and company or client.
With the contract in place, independent contractors can usually work in the manner they prefer while the company or client does not have any responsibility for their tax obligations.
Independent contractor agreements are only for external freelancers. Company employees do not operate in the same way as independent contractors and thus do not require these agreements.
Confidentiality is a major concern for some companies. Hiring an outside worker can cause some apprehension for keeping company practices internal. Independent contractor agreements often include a clause regarding confidential information, expectations, and consequences in order to protect the company.
When Should You Use an Independent Contractor Agreement?
It's prudent to use an independent contractor agreement if you are one of the following:
- An independent contractor
- A client hiring an independent contractor
- A company hiring an independent contractor
Independent contractors might draw up a contract and present it to their client before beginning the project. Alternatively, the client might produce the contract for the independent contractor to sign, or they might work together to create a contract together.
When a company hires an independent contractor, it's most common for the business to provide the contract for the freelancer rather than the reverse.
Independent contractor agreements are mutually beneficial and protect all parties, so it's in the best interest of everyone involved to draft and sign one.
Benefits of Using an Independent Contractor Agreement
Independent contractor agreements offer a host of benefits for all parties involved in the project. For companies that hire independent contractors, these agreements:
- Protect the company's business interests
- Offer liability protections
- Secure the company's assets
- Ensure the freelancer maintains confidentiality
For freelancers, these agreements:
- Ensure they get paid the pre-determined rate for their work
- Offer professionalism when working with clients by presenting a formal contract rather than a verbal agreement
- Provide clear guidelines and expectations for their work
For clients who hire freelancers to complete projects, these agreements:
- Provide legal protection in the case of an unfinished or unsatisfactory job
- Ensure the project is finished in a set amount of time
- Secure the opportunity to terminate the project if it's not working well
What Is the Difference Between an Independent Contractor and an Employee?
If you're considering hiring someone to perform a job, make sure you know whether you're hiring them as an independent contractor or as an employee. These roles have important distinctions that could impact you and the freelancer or employee negatively if mislabeled.
Independent contractors usually demonstrate these characteristics:
- Are self-employed
- Use their own equipment or tools to perform their work
- Complete 1099 tax forms
- Invoice their clients
- Do not require much, if any, client oversight from day to day
- Work on fixed-term or temporary projects
- Do not receive any employment benefits from their client or hiring company
Employees of a company, by contrast, usually show these characteristics:
- Were hired by a single company to work exclusively for them
- Complete W-2 tax forms
- Have workflow controlled by their employer
- Have wages set by their employer
- Receive employee benefits like health insurance, paid time off, or other perks
- Have an employment contract with the company
- Participate in employee reviews
- Receive in-house training from their company
How To Write an Independent Contractor Agreement
While independent contractor agreements are often straightforward, they are binding legal documents, so it's important that you ensure the information included is accurate. If you want to create an independent contractor agreement, you have a couple of options. First, you can use a template to guide you through the process of creating your own unique contract. If you don't have many special considerations, this is probably the easiest way to create an independent contractor agreement.
However, if your contract has unique complexities due to the nature of your work, you should consult a contract attorney to help you create an individualized independent contractor agreement to ensure all parties involved in the project are appropriately protected.
After you create your independent contractor agreement, you might consider adding a few other related documents to your file to ensure every aspect of your job is well-described and protected.
- W-9 Form: A W-9 form is a tax form that independent contractors and their hiring company or clients must complete. It's different from a W-2 form, which is required for employees.
- Non-Compete Agreement: This agreement ensures that an independent contractor won't work for a competitor for a set period of time, usually during the course of the project.
- Non-Solicitation Agreement: This agreement ensures that the independent contractor won't take the hiring company's clients with them after they finish the job.
Independent contractor agreements are useful legal tools to help protect every disparate party working on a unified project. Make sure your independent contractor agreement includes every important aspect of the job to ensure timely and accurate completion as well as protection for you, your company, and your clients. Seek guidance from a qualified contract lawyer if you need help creating a unique independent contractor agreement.
Meet some of our Independent Contractor Agreement Lawyers
Creative, results driven business & technology executive with 24 years of experience (13+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. My engagements often include legal consultation & advisory roles, drafting of NDAs, TOS & Privacy Policies, contracts and corporate law, business strategy advice & consulting, in-house counsel, Founder & entrepreneur guidance and other roles as needed by my clients. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.
Seasoned technology lawyer with 22+ years of experience working with the hottest start-ups through IPO and Fortune 50. My focus is primarily technology transactions with an emphasis on SaaS and Privacy, but I also provide GC services for more active clients.
I am a California-barred attorney specializing in business contracting needs. My areas of expertise include contract law, corporate formation, employment law, including independent contractor compliance, regulatory compliance and licensing, and general corporate law. I truly enjoy getting to know my clients, whether they are big businesses, small start-ups looking to launch, or individuals needing legal guidance. Some of my recent projects include: -drafting business purchase and sale agreements -drafting independent contractor agreements -creating influencer agreements -creating compliance policies and procedures for businesses in highly regulated industries -drafting service contracts -advising on CA legality of hiring gig workers including effects of Prop 22 and AB5 -forming LLCs -drafting terms of service and privacy policies -reviewing employment contracts I received my JD from UCLA School of Law and have been practicing for over five years in this area. I’m an avid reader and writer and believe those skills have served me well in my practice. I also complete continuing education courses regularly to ensure I am up-to-date on best practices for my clients. I pride myself on providing useful and accurate legal advice without complex and confusing jargon. I look forward to learning about your specific needs and helping you to accomplish your goals. Please reach out to learn more about my process and see if we are a good fit!
I am a NY licensed attorney experienced in business contracts, agreements, waivers and more, corporate law, and trademark registration. My office is a sole member Law firm therefore, I Take pride in giving every client my direct attention and focus. I focus on getting the job done fast while maintaining high standards.
A twenty-five year attorney and certified mediator native to the Birmingham, Alabama area.
Longtime corporate real estate counsel with specialities in commercial leasing, contracts, corporate governance, and general small business/startup/entrepreneurship legal issues.
I absolutely love helping my clients buy their first home, sell their starters, upgrade to their next big adventure, or transition to their next phase of life. The confidence my clients have going into a transaction and through the whole process is one of the most rewarding aspects of practicing this type of law. My very first class in law school was property law, and let me tell you, this was like nothing I’d ever experienced. I remember vividly cracking open that big red book and staring at the pages not having the faintest idea what I was actually reading. Despite those initial scary moments, I grew to love property law. My obsession with real estate law was solidified when I was working in Virginia at a law firm outside DC. I ran the settlement (escrow) department and learned the ins and outs of transactions and the unique needs of the parties. My husband and I bought our first home in Virginia in 2012 and despite being an attorney, there was so much we didn’t know, especially when it came to our HOA and our mortgage. Our real estate agent was a wonderful resource for finding our home and negotiating some of the key terms, but there was something missing in the process. I’ve spent the last 10 years helping those who were in the same situation we were in better understand the process.