Independent contractors generally enjoy more freedom and flexibility than typical employees. Yet, there are drawbacks to working for yourself. Therefore, it is helpful to understand the pros and cons of being a freelancer and learn the best ways to protect yourself. Freelancers can benefit from a solid independent contractor agreement to help provide security and structure to their work. An excellent example contractor agreement can be developed for your use from the following.
What Is an Independent Contractor Agreement?
If you have been considering freelance work, you may have asked, what is an independent contractor agreement? Generally, this document is a legal contract between a freelancer and a client for whom the freelancer will provide work. The agreement may be known by a variety of other names, including:
- Freelance Contract
- Contract Labor Agreement
- Freelance Contractor Agreement
- Independent Contractor Contract
- Subcontractor Agreement
- Consulting Services Contract
- Consulting Agreement
- General Contractor Agreement
A well-drafted independent contractor agreement sets forth the scope of the work and outlines the expectations of both the client and the freelancer. The document should include the specific work to be performed, the deadlines for each project milestone, and the payment that the client will pay the freelancer for completing each milestone.
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What Does Independent Contractor Mean?
Before you can determine whether you need an independent contractor agreement, it is essential to ask what a contractor is. More specifically, what’s an independent contractor? An independent contractor is a person who does not have an employer but is self-employed. This person offers services to clients who need a particular type of work performed. Independent contractors usually do not work exclusively with one client the way an employee works for one employer. Instead, they have separate contract work agreements with each client. Independent contractors are often called freelancers since they are free to determine clients to work with, work hours and days, workplace, and rate of pay. Many freelancers are paid by the project or milestone of the project rather than an hourly rate.
Many employers find it more desirable to have a work agreement with contractor arrangements for certain projects rather than having full-time employees for that work. These arrangements can be especially useful when a project is short-term and requires specialized knowledge. An employer can contract with a freelancer who fits the project’s needs without committing to a long-term employer-employee relationship. Further, employers do not need to pay taxes or offer employee benefits, such as health insurance, to independent contractors.
Why Do You Need an Independent Contractor Agreement as a Freelancer?
Independent contractors have more flexibility and control over their working conditions than do most employees. However, they do not usually qualify for the same benefits and job security that standard employees enjoy. Because freelancers are responsible for their own taxes (self-employment taxes), insurance (liability insurance), business expenses, retirement plans, and much more, they should be sure to protect themselves with the proper legal documents.
One of the most important legal documents used by freelancers is the independent contractor agreement. An attorney in your area who understands the needs of independent contractors can discuss your unique situation and help you better understand how to protect yourself and your business. Search Lawrina for help locating a lawyer near you to consult with about your freelancing services.
Ten Must-Haves in an Independent Contractor Agreement
Having a detailed contract before starting to work with a client will help to prevent several avoidable problems. The written document can be lengthy and cover every detail of the agreed terms, or it can be simple and straightforward. However, there are some specific terms that every contract should include. At a minimum, the following ten must-have terms are what should be included in an independent contractor agreement:
- The names of the parties — the client and the independent contractor.
- The relationship between the parties — specifies that the contractor is not an employee.
- A description of the services to be provided by the independent contractor.
- The date when work will commence and the deadlines for each milestone of the project.
- Payment for the services, including how much, how often, and the method.
- The term of the agreement and an independent contractor termination clause.
- How information should be handled, including trade secrets and confidential information.
- A breach of contract section.
- A section stating how disputes or disagreements will be handled and the relevant jurisdiction.
- Signature blocks for all parties to sign and date the agreement.
Be sure to understand the ins and outs of being an independent contractor so you will know how to set yourself up for success as a freelancer. You may even want to take the time to consult with an experienced business law attorney near you who understands the unique considerations of working as a freelancer.
Related: 5 Things All HR Professionals Should Know About Contractors' Invoices
Download Lawrina’s Independent Contractor Agreement
Streamline your contract creation process by downloading the Lawrina independent contractor agreement template. You will find clear instructions on how to fill out independent contractor agreements and can use the template to create your own agreement before working with a new client.
Final Thoughts
More and more workers are choosing to become freelancers. The life of an independent contractor can offer great flexibility and freedom. However, it can also leave the freelancer feeling vulnerable and unsure of how to best protect his or her business. Contractors do not generally have the same benefits and protections that standard employees are provided by their employers. Therefore, an independent contractor should understand the benefits and liabilities of freelancing. One of the most significant ways freelancers can protect themselves and their business is by having a solid independent contractor agreement when working with freelance clients. Independent contractors can visit Lawrina for great resources, including local attorneys for the advice and guidance they need to navigate their freelance journey.
