What is a Independent Contractor Agrement?
An Independent Contractor Agreement is a legal contract between a business and an independent contractor or consultant. It outlines the details of the work or project to be performed and the terms of the agreement.
It covers all of the important aspects of your relationship, including services, payment terms, confidentiality, termination and limitation of liability.
It helps to set the ground rules so that both parties can understand their obligations from the start.
Do I need a contract?
Yes, absolutely! A contract protects both you and your contractors.
You should always have a contract signed before a new contractor starts working for you.
You need a proper written contract to enforce your rights and make sure your business is legally protected in case something goes wrong.
Our Independent Contractor Agreement template will help you avoid misunderstandings and disputes.
Are there any other names for an Independent Contractor Agreement?
Yes, you might have also heard this contract referred to as a Contractor Agreement or Consulting Agreement.
All of them are basically the same thing, just different names for the contract you use to hire a contractor.
What does this Independent Contractor Agreement template include?
Our Independent Contractor Agreement template covers everything you need:
★ Intellectual Property
★ Guarantee and Warranties
★ Dispute Resolution
Differences between an employee and a contractor
Whether you are an employee or a contractor depends on many different factors.
Independent contractors generally:
🔹 work for themselves and are their own boss
🔹 are free to accept or refuse work
🔹 control their own working times
🔹 provide their own tools and equipment
🔸 work in someone else’s business
🔸 are subject to controls on how, where and when they do their work
🔸 are paid a wage
🔸 receive employee entitlements, such as sick and annual leave
Still not sure about the difference?
We recommend you visit the Fair Work Ombudsman website to read more. If you’re an employer, visit the ATO’s website to learn the tax and super obligations for both employees and contractors, and read more about the differences between them.
What is sham contracting?
A sham contracting arrangement is when an employer attempts to disguise an employment relationship as an independent contracting arrangement. This is usually done to avoid paying employee entitlements. Even if you make an innocent mistake, you can still be fined!
If you’re convicted of sham contracting, you could be hit with a fine of up to $12,600 as well as back-payment of wages and entitlements.
This agreement makes it crystal clear that you have a true Independent Contractor arrangement.
How do I include all of the details for the job in the contract?
We have included a Job Sheet in the contract where you can write down all of the specific details of the services or project. This includes things like job description, start date, services to be provided and fees.
If you have any questions about how to fill this out, you’re welcome to Contact Us.
Does the contractor get paid a fixed fee, or an hourly rate?
It’s up to you to negotiate fees with the contractor.
For a specific project, you might like to have the cost certainty of a fixed fee, but it’s very common for contractors to charge out at an hourly or daily rate.
How do I stop a contractor from taking my clients, or competing with my business?
We have included a Restraint clause in our Independent Contractor Agreement template to prevent the Independent Contractor from taking clients or employees away from your business, or competing with your business.
Can I terminate the agreement for non performance?
Yes you can.
Our template includes a detailed Termination clause which allows you to terminate for non performance or failing to meet key responsibilities listed in the agreement.