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What To Include In Your Independent Contractor Agreement

What to Include in Your Independent Contractor Agreement

independent contractor agreementIt’s the dreaded situation no business owner wants to find themselves in.

Hiring an independent contractor to save yourself time just to end up chasing them around for weeks for what you paid for.

It’s one of the most defeating aspects of outsourcing. That is, however, if you don’t have an independent contractor agreement in place.

A contract is a necessity that covers your bases in every situation. There’s no wondering what the outcome will be; you know you’re covered.

Are you looking to hire an independent contractor?

Then you need to learn how to write a simple agreement to ensure your experience is a positive one.

1. Start with the Basics When Drawing up an Independent Contractor Agreement

It may seem intimidating when you’re starting the hiring process, but outsourcing is a beneficial aspect of running a business.

Before you get into the nitty-gritty – take into account the basic information you’ll require when drawing up a contractor agreement.

Basic Infomation

  1. Who: Who’s being hired and who’s doing the hiring
  2. What: This is where you include the services the independent contractor is providing
  3. When: When will the project commence? And very crucial – when is the deadline?

Another factor to consider is to state the jobs of each party. This is something you should discuss prior with your contractor.

2. Payment and Billing Terms

One of the most vital components of a legal contractor agreement is laying out the exact payment and billing terms.

Details will vary depending on your individual business. But, in general, include the exact amount of payment and when the payment is to be made.

Other Details of Billing to Consider:

  • Are you paying an upfront cost? If so, how much?
  • When is the deadline for payment, and when is the earliest they can invoice you for payment.
  • How will you pay? Paypal? Stripe? Another payment service?

Have all of these factors laid out ahead of time. So when it’s time to draw up your contract, you have everything you need and you’re not left scrambling.

3. The Scope of the Project

If you practice flexibility in the workplace, you’ll already be the type of person to keep things organized in any hiring process.

Laying out the specific description of your project will be second nature for you.

Before crafting your contractor agreement form, you should plan to have a discussion with your independent contractor regarding the ins and outs of the project together.

This will ensure there’s no confusion when it comes time for the work to be produced or submitted.

4. Termination Terms

While we never want a business relationship to go sour, sometimes we don’t have control over this.

This is why having a termination section on your agreement is essential and should be included in every contractor agreement you create.

In this section, you should state that you or the contractor can terminate the business relationship at any time (or however you would like to organize the specifics).

You should also include how many days notice your contractor (or you as the business owner) needs to give before termination.

5. Confidentiality/Non-Disclosure

This section can easily be forgotten, but as a business owner, you need to make sure you include this to cover your business. Even if you’re hiring a friend, or someone well-known in their industry, it’s still not smart to leave this bit out.

Under this section, you can mention:

  • The contractor is not to disclose trade secrets of any kind
  • They’re forbidden to share company knowledge
  • The contractor is not to share or take private data or information they needed access to while conducting your project

You can adjust this section as you see fit. And add other clauses depending on the scope of the project.

Final Thoughts

Hiring an independent contractor for your business has various benefits and can unlock  But, of course, it doesn’t come without issues occasionally.

The only way you can protect yourself and your business is to ensure you have an independent contractor agreement signed ahead of time.

Then you can rest easy knowing your work is being completed by a professional, and you’ll receive your money’s worth.

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