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Template Description
The US independent contractor agreement is a legally binding agreement between an independent contractor and another company or individual. Independent contractors are also referred to as freelancers who provide temporary services. An independent contractor can even be a business owner who delivers freelance services to the public, such as a lawyer or veterinarian.
Independent contractors are self-employed and have to pay self-employment taxes. They also have to file different tax forms annually. A big part of an independent contractor agreement is distinguishing the independent contractor you hire from other employees who work for your business full-time. You have to do this for text and legal purposes.
There are many things you should include in your independent contractor agreement. It is always easier to consider reviewing a contractor contract template and picking the items that apply to your situation. However, in general, these sections will help you understand how to write an independent contractor agreement:
- Parties involved and services
Include a list of who is performing services. As part of the agreement, contract workers may or may not be given perks, such as disability insurance, health insurance, or other employee benefits. It is something you need to discuss ahead of time.
- How to handle information
A significant portion of your agreement should discuss what trade secrets or confidential information might be exchanged as part of the contract and what security measures contractors need to employ to protect that information. Someone working for a health insurance company on an independent contract agreement might need to use a contractor agreement template that specifies what electronic security needs to be used to protect personal identifying information. Also, for all medical work, they’ll probably need to sign a nondisclosure agreement or other document agreeing to adhere to HIPAA rules.
- Breach of contract
Similarly, there needs to be a section stating what happens if there is a material breach or subsequent breach. It should include what measures a business owner and independent contractor must take and who will accept legal responsibility in this joint venture.
- Legal review
You also want to include a section where the business owner and contractor are given a chance to provide prior written consent from an attorney.
Both parties should sign on the same page of the independent contractor agreement.
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Frequently Asked Questions
You are not legally required to use an attorney to draft your document. You can write the entire agreement yourself and only use licensed attorneys to provide legal advice. You can also use an attorney or law firm to review what you have written. You can find lawyer services where you live and get a quote for such services.
- If you hire an independent contractor, you can choose when the contract expires. It can either be:
- The date of completion for the single task or services; or
- A designated date written into the contract.
Whether you use an independent contractor agreement sample or draft your own, the applicable law that governs any of these terms is something you want to state in the contract. If you both live in the same place, by default, they will generally be the state and country where you live. If you hire a contractor from New York, but your company is based out of Ohio, you can designate which state law applies. Generally speaking, it is the state law where the contractor lives, so it would be New York in this example.