Independent Contractor Agreement
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What it is
To hire someone as a contractor.
An Independent Contractor Agreement is a services contract between a company and a contractor that’s been hired to work with the company. It describes the services that will be done and the conditions attached to those services. Having an Independent Contractor Agreement makes your working agreement clear from the beginning, which not only helps to avoid disagreements or even formal legal disputes later, it also makes it easier to work together. Here are the main topics in an Independent Contractor Agreement:
- A clear description of the services the contractor will do
- Payment terms
- Insurance requirements (if any)
- Ownership of the services and intellectual property, like the copyright and other intellectual property rights to the work created
- Confidentiality promises that each party may give
- Any non-competition promises you want to include
- Limits on your liability and who will be responsible for any claims that come up
- Company policies that need to be followed
Who needs it
When you need one
When you start your services for a company or client.
Independent Contractors and their clients and customers should have a contract when they start working together. Having a contract helps to avoid problems and disputes that will get in the way of doing business. When there is a disagreement about the conditions attached to your work, you can point to your Independent Contactor Agreement. Most importantly, the clarity from a contract gives you confidence in having a professional and good working relationship.
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FAQs
What's the difference between a Consultant Agreement and an Independent Contractor Agreement or Services Agreement?
They’re actually the same family of legal documents and other than the name we call them, they’re mostly the same document.
An Independent Contractor Agreement tends to be the name we use when someone is hired as a contractor rather than an employee. Sometimes, some employment-like terms are included, like an agreement to follow company policies that usually only apply to employees.
A Consultant Agreement tends to be the name used when an independent firm or professional is hired to give advice.
A Services Agreement is the generic name for agreements where one person or company provides services to another company.
What's a non-competition clause?
A non-competition clause is a promise to not compete with another business. They’re not always easy to enforce, especially if the party agreeing to the non-competition clause wouldn’t easily be able to find employment or continue their business after agreeing to the clause. In short, the non-competition clause should be the minimum necessary to protect the party needing it. So, non-competition clauses are usually time-limited (e.g., 1 – 2 years), limited to a specific area (e.g., the city or province where the person worked), and apply only to the business of the protected party.
What's a non-solicitation clause?
A non-solicitation clause is a promise to not hire the other party’s employees or contractors. It can also be a promise to not go after the party’s customers and clients. Non-solicitation clauses are generally easier to enforce than non-competition clauses, but are still normally limited to a time period, like one or two years for example.