Independent Contractor Agreement – Template
[DATE]
INDEPENDENT CONTRACTOR AGREEMENT
This Independent Contractor Agreement (the "Agreement") is entered into as of [Effective Date]
by and between:
[Client Legal Name], a [State] [entity type] with its principal place of business at
[Client Address] ("Client"), and
[Contractor Legal Name], a [State] [individual/entity type] with its principal place of business
at [Contractor Address] ("Contractor").
1. SCOPE OF WORK.
Contractor will perform the services described in Exhibit A (the "Services").
2. TERM.
This Agreement begins on [Start Date] and continues until [End Date] or until terminated
as provided herein.
3. COMPENSATION.
Client will pay Contractor [hourly rate/fixed fee/milestone-based fee] as detailed in
Exhibit A. Payment is due within [number] days of receipt of invoice.
4. INDEPENDENT CONTRACTOR STATUS.
Contractor is an independent contractor, not an employee. Contractor is responsible for
all taxes, insurance, and benefits. Contractor retains control over how the Services are
performed.
5. INTELLECTUAL PROPERTY.
All work product, inventions, and deliverables created by Contractor in connection with
the Services ("Work Product") shall be the sole and exclusive property of Client.
Contractor hereby assigns all right, title, and interest in the Work Product to Client.
6. CONFIDENTIALITY.
Contractor agrees to keep confidential all non-public information obtained from Client
during the term of this Agreement and for [number] years thereafter.
7. NON-SOLICITATION.
During the term and for [number] months thereafter, Contractor will not solicit Client's
employees, contractors, or customers for competing purposes.
8. TERMINATION.
Either party may terminate this Agreement:
(a) For convenience with [number] days' written notice
(b) For cause immediately upon written notice if the other party materially breaches
9. LIABILITY & INDEMNIFICATION.
Contractor's liability is limited to fees paid in the [6/12] months prior to claim.
Contractor will indemnify Client against third-party claims arising from Contractor's
gross negligence or willful misconduct.
10. GOVERNING LAW & DISPUTE RESOLUTION.
This Agreement is governed by the laws of [State]. Any disputes will be resolved through
[binding arbitration / courts of [County, State]].
11. GENERAL PROVISIONS.
- Entire Agreement: This Agreement supersedes all prior agreements.
- Amendment: Must be in writing and signed by both parties.
- Assignment: Neither party may assign without the other's written consent.
- Notices: All notices must be in writing to addresses above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
CLIENT: CONTRACTOR:
________________________ ________________________
[Name] [Name]
[Title] [Title]
[Date] [Date]
EXHIBIT A – SCOPE OF WORK & COMPENSATION
[Detailed description of services, deliverables, milestones, and payment terms]
This sample assumes U.S. law and a client-friendly position. Always review and adapt the
agreement to your specific facts and jurisdiction before using it.
Key clauses in an independent contractor agreement
1. Scope of work & deliverables
What this clause does: Defines exactly what work the contractor will perform, what deliverables are expected, and any deadlines or milestones.
Why it matters: Prevents scope creep and disputes about what was promised. Without clear deliverables, you can't enforce quality standards or timely completion.
What can go wrong: Vague descriptions like "consulting services" lead to disputes. Be specific: "Develop a responsive website with 5 pages, mobile-optimized, delivered by March 15."
When to get help: If the project is complex, involves multiple phases, or you're unsure how to define acceptance criteria.
2. Term & termination
What this clause does: Sets the duration of the relationship and how either party can end it.
Why it matters: Protects both sides. "At-will" termination gives flexibility; "for cause only" gives contractors more security but limits your flexibility.
What can go wrong: No termination clause means you're stuck until the work is done. A 90-day notice period may be too long if performance is poor.
When to get help: For long-term engagements or when contractor insists on "for cause only" termination.
3. Payment, invoicing & expenses
What this clause does: Specifies how much you'll pay (hourly, flat fee, milestone-based), when invoices are due, and who pays for expenses.
Why it matters: Prevents payment disputes. Clear payment terms also help demonstrate this is truly an independent contractor relationship (not employment).
What can go wrong: "Net 30" payment terms without late fees means contractors have no leverage for late payment. Vague expense policies lead to surprise bills.
When to get help: For large projects, consider milestone payments tied to deliverable acceptance to protect both sides.
4. IP ownership & license
What this clause does: Determines who owns the work product. Options: full assignment to client, license to client, or contractor retains ownership.
Why it matters: If you're paying for custom work, you usually want to own it. But "work made for hire" doesn't automatically apply to contractors under U.S. law—you need explicit assignment language.
What can go wrong: Without clear assignment, contractor may own the work and only grant you a limited license. This is catastrophic for core business assets.
When to get help: Always, for any creative or technical work where IP matters. This is one of the most commonly litigated contract issues.
5. Confidentiality & non-disclosure
What this clause does: Protects your confidential business information, customer data, trade secrets, etc.
Why it matters: Contractors often see sensitive information. Without confidentiality obligations, they can share it with anyone—including competitors.
What can go wrong: Overly broad definitions ("all information") may be unenforceable. Too short a duration (1 year) doesn't protect long-term trade secrets.
When to get help: If contractor will access customer data, source code, financial information, or strategic plans.
6. Independent contractor status
What this clause does: Clarifies that contractor is not an employee—they pay their own taxes, provide their own tools, control their own schedule.
Why it matters: Misclassifying an employee as a contractor triggers massive tax penalties, wage claims, and benefits liability.
What can go wrong: A clause alone doesn't make someone a contractor. If you control when/where/how they work, they may legally be an employee regardless of what the contract says.
When to get help: Before engaging anyone full-time, requiring set hours, or integrating them deeply into your team.
7. Liability, indemnity & limitations
What this clause does: Caps the contractor's liability (typically to fees paid) and allocates risk for third-party claims.
Why it matters: Without a cap, contractor faces unlimited liability for any mistake. Without indemnity, you bear all risk if contractor's work infringes IP or violates laws.
What can go wrong: Unlimited liability scares away good contractors. But excluding liability for gross negligence or IP infringement gives contractors too much protection.
When to get help: For high-risk work (public-facing software, regulated industries, high-value projects).
8. Governing law & dispute resolution
What this clause does: Chooses which state's law applies and whether disputes go to court or arbitration.
Why it matters: Avoids fighting over jurisdiction. Arbitration can be faster and cheaper than court, but you give up the right to appeal.
What can go wrong: Agreeing to contractor's home state may put you at a disadvantage. Mandatory arbitration with split costs may be expensive for small disputes.
When to get help: For out-of-state or international contractors, or when the project value justifies custom dispute resolution (mediation first, then arbitration).