Contract With Independent Contractor

Hiring independent contractors, consultants or freelancers instead of employees can save you time, money and paperwork. But if you treat a contractor as an employee, the IRS can (and will) hit you hard with penalties.

Use the "Contract With Independent Contractor" to not only come to an agreement with your contractor, but to help justify your working relationship when the IRS comes knocking on your door.

 You can save and edit the form before you buy--just create a Nolo.com account. It's easy, free, and there's no obligation to buy anything. If you purchase the form, you'll be able to print, send, or download it.

See below the form for a full product description.

Names

This agreement is between , Client, and , Contractor.

Services to Be Performed 

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Label Contract Text
services

Contractor agrees to perform the following services for Client: 

services in Exhibit  Contractor agrees to perform the services described in Exhibit A, which is attached to and made part of this Agreement.

Time for Performance

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specific date Contractor will complete the performance of these services on or before .
piece by piece

Contractor will perform the services according to the following schedule: 

Payment

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Label Contract Text
fixed fee Contractor will be paid $ upon completion of the work as detailed in this Agreement.
installments

Client will pay Contractor a fixed fee of $, in  installments as follows:

hour/day/week/month

Contractor will be compensated at the rate of $ per .

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cap on payment

Unless otherwise agreed upon in writing by Client, Client's maximum liability for all services performed during the term of this Agreement will not exceed $.

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state and federal taxes

State and Federal Taxes

Client will not:

(a) withhold Social Security and Medicare taxes from Contractor's payments or make such tax payments on Contractor's behalf, or

(b) withhold state or federal income tax from Contractor's payments or make state or federal unemployment contributions on Contractor's behalf.

Contractor will pay all applicable taxes related to the performance of services under this contract. This includes income, Social Security, Medicare, and self-employment taxes. Contractor will also pay any unemployment contributions related to the performance of services under this contract. Contractor will reimburse Client if Client is required to pay such taxes or unemployment contributions.

Fringe Benefits

Neither Contractor nor Contractor's employees are eligible to participate in any employee pension, health, vacation pay, sick pay, or other fringe benefit plan of Client.

Invoices

Contractor will submit invoices to Client for all services performed.

Independent Contractor Status

The parties intend Contractor to be an independent contractor in the performance of the services. Contractor will have the right to control and determine the methods and means of performing the contractual services.

Other Clients

Contractor retains the right to perform services for other clients.

Assistants

Contractor, at Contractor's expense, may employ assistants as Contractor deems appropriate to perform the contractual services. Contractor will be responsible for paying these assistants as well as any expense attributable to them, including income, Social Security, and Medicare taxes, and unemployment contributions. Contractor will maintain workers' compensation insurance for all of its employees.

Equipment and Supplies

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Label Contract Text
contractor provides all equipment Contractor, at Contractor's expense, will provide all equipment, tools, and supplies necessary to perform the contractual services.
client provides some equipment

Contractor, at Contractor's expense, will provide all equipment, tools, and supplies necessary to perform the contractual services, except for the following, which will be provided by Client:

Expenses

Alternate Selection
Label Contract Text
contractor pays all expenses Contractor will be responsible for all expenses required for the performance of the contractual services.
client pays some expenses

Contractor will be responsible for all expenses required for the performance of the contractual services, except for the following, which will be paid for by Client:

Unemployment Compensation

Client will make no state or federal unemployment compensation payments on behalf of Consultant or Consultant's employees or contract personnel. Consultant will not be entitled to these benefits in connection with work performed under this Agreement.

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insurance coverage

Insurance

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general liability General Liability. Client will not provide any insurance coverage of any kind for Consultant or Consultant's employees or contract personnel. Consultant will maintain a broad form commercial general liability insurance policy providing combined single limits of not less than $ per occurrence and $ annual aggregate. Before commencing any work, Consultant will provide Client with proof of this insurance and that Client has been made an additional insured under the policy.
professional liability Professional Liability. Consultant will obtain professional liability insurance coverage for malpractice or errors or omissions committed by Consultant or Consultant's employees or contract personnel during the term of this Agreement. The policy will provide for coverage of at least $ for each occurrence and $ annual aggregate. Before commencing any work, Consultant will provide Client with proof of this insurance.

 

 

Warranties and Representations

Consultant warrants and represents that:

  • Consultant has the authority to enter into this Agreement and to perform all obligations hereunder.
  • The services to be performed are and will be free and clear of all encumbrances including security interests, licenses, liens, or other restrictions except as follows: .
  • The use, reproduction, distribution, or modification of any work product resulting from the services does not and will not violate the copyright, patent, trade secret, or other property right of any former client, employer, or third party.

Indemnification

Consultant agrees to indemnify and hold harmless Client against any third-party claims, actions, or demands, including without limitation reasonable attorney and accounting fees, alleging or resulting from the breach of the warranties contained in this Agreement. Client will provide notice to Consultant promptly of any such claim, suit, or proceeding and will assist Consultant, at Consultant's expense, in defending any such claim, suit, or proceeding.

Term of Agreement

This agreement will become effective when signed by both parties and will terminate on the earliest of:

  • the date Consultant completes the services required by this Agreement
  • , or
  • the date a party terminates the Agreement as provided below.

Termination of Agreement

Each party has the right to terminate this Agreement if the other party has materially breached any obligation herein and such breach remains uncured for a period of 30 days after notice thereof is sent to the other party.

If at any time after commencement of the services required by this Agreement, Client in its sole reasonable judgment, determines that such services are inadequate, unsatisfactory, no longer needed, or substantially not conforming to the descriptions, warranties, or representations contained in this Agreement, Client may terminate this Agreement upon  days' written notice to Consultant.

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client owns IP

Intellectual Property Ownership

Consultant assigns to Client all patent, copyright, trademark, and trade secret rights in anything created or developed by Consultant for Client under this Agreement. Consultant will help prepare any papers that Client considers necessary to secure any patents, copyrights, trademarks, or other proprietary rights at no charge to Client. However, Client will reimburse Consultant for reasonable out-of-pocket expenses incurred. Consultant must obtain written assurances from Consultant's employees and contract personnel that they agree with this assignment.

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confidential information

Confidential Information

Consultant Confidentiality. Consultant acknowledges that within the course of providing services, it will be necessary for Client to disclose certain confidential and proprietary information to Consultant in order for Consultant to perform duties under this Agreement. Consultant acknowledges that any disclosure to any third party or any misuse of this proprietary or confidential information would irreparably harm Client. Accordingly, Consultant will not use or disclose to others without Client's written consent Client's confidential information, except when reasonably necessary to perform the services under this Agreement.

Scope of Confidential Information. Confidential Information includes, but is not limited to:

  • the written, printed, graphic, or electronically recorded materials furnished by Client for use by Contractor
  • Client's business or marketing plans or strategies, customer lists, operating procedures, trade secrets, design formulas, know-how and processes, computer programs and inventories, discoveries, and improvements of any kind
  • any tangible information produced by Consultant for Client under this agreement that provides Client with a business advantage over  competitors and is unknown by Client's competitors
  • any written or tangible information stamped "confidential," "proprietary," or with a similar legend, and
  • any written or tangible information not marked with a confidentiality legend, or information disclosed orally to Consultant, that is treated as confidential when disclosed and later summarized sufficiently for identification purposes in a written memorandum marked "confidential" and delivered to Consultant within 30 days after the disclosure.

Consultant will not be restricted in the use of any material that is publicly available, already in Contractor's possession prior to commencement of Consultant's provision of services to Client, known to Consultant without restriction, or rightfully obtained by Consultant from sources other than Client.

Consultant's obligations regarding proprietary or confidential information extend to information belonging to customers and suppliers of Client about which Consultant may have gained knowledge as a result of Consultant's services to Client.

Consultant will not disclose to Client information or material that is a trade secret of any third party. The provisions of this clause will survive any termination of this Agreement.

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private dispute resolution

Disputes

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mediation only

Mediation. If a dispute arises under or relating to this Agreement, the parties will try in good faith to settle it through mediation conducted by a mediator to be mutually selected. The parties will share the costs of the mediator equally. Each party will cooperate fully and fairly with the mediator and will attempt to reach a mutually satisfactory compromise to the dispute. If the dispute is not resolved within 30 days after it is referred to the mediator, either party may take the matter to court.

mediation to arbitration

(no litigation)

Mediation and Arbitration. If a dispute arises under or relating to this Agreement, the parties will try in good faith to settle it through mediation conducted by a mediator to be mutually selected. The parties will share the costs of the mediator equally. Each party will cooperate fully and fairly with the mediator and will attempt to reach a mutually satisfactory compromise to the dispute. If the dispute is not resolved within 30 days after it is referred to the mediator, it will be settled by binding arbitration by an arbitrator to be mutually selected. Judgment on the arbitration award may be entered in any court that has jurisdiction over the matter.
arbitration (no litigation)

Arbitration. All claims and disputes arising under or relating to this Agreement are to be settled by binding arbitration by an arbitrator to be mutually selected. Judgment on the arbitration award may be entered in any court that has jurisdiction over the matter. 

Multiple Selection
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attorney fees

Attorney Fees

The prevailing party shall have the right to collect from the other party its reasonable costs and disbursements and attorney fees incurred in enforcing this Agreement.

Entire Agreement

This is the entire agreement between the parties. It replaces and supersedes any and all oral agreements between the parties, as well as any prior writings. This Agreement may not be amended except in a writing as provided for in this Agreement.

Successors

This agreement binds and benefits the respective successors, inheritors, assigns, and personal representatives of the parties, except to the extent of any contrary provision in the Agreement.

Waiver

The failure to exercise any right provided in this Agreement shall not be a waiver of prior or subsequent rights.

Governing Law

This Agreement will be governed by and construed in accordance with the laws of the state of  

Severability

If any court determines that any provision of this Agreement is invalid or unenforceable, any invalidity or unenforceability will affect only that provision and will not make any other provision of this agreement invalid or unenforceable and shall be modified, amended, or limited only to the extent necessary to render it valid and enforceable.

Attached Papers

Any attached sheet or document shall be regarded as fully contained in this Agreement.

Notices

All notices must be in writing. A notice may be delivered to a party at the address that follows a party's signature or to a new address that a party designates in writing. A notice may be delivered: in person, by certified mail, or by overnight courier.

No Partnership

This Agreement does not create a partnership relationship. Consultant does not have authority to enter into contracts on Client's behalf.

Keep Together

Counterparts

This agreement may be signed by the parties in different counterparts and the signature pages combined will create a document binding on all parties.

MY SIGNATURE BELOW INDICATES THAT I HAVE READ AND UNDERSTOOD THIS AGREEMENT.

Client: 
Title: ________________________________________

Signature: ____________________________________
Date: ________________________________________
Address: _________________________________________________

 

Consultant: 
Title: _____________________________________________________

Signature: ____________________________________
Date: ________________________________________
Address: _________________________________________________

 

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