Independent Contractor Agreement

$129.00 inc. GST

 Last Updated November 26, 2020
  All Australian States & Territories

★ Grow your team or hire a specialist for a project

★ Clearly define your relationship with a contractor

★ Avoid misunderstandings and disputes

★ Peace of mind that your business is legally protected

★ Drafted in plain English by Australian lawyers

★ Complete our Independent Contractor Agreement template in under 10 minutes

What is a Independent Contractor Agreement?

An Independent Contractor Agreement is a legal contract which allows a business to engage a contractor for the provision of services.

This contract clearly defines the relationship between the two parties, including services, fees, payment terms, timeframe and responsibilities. It also includes important legal clauses for liability, intellectual property, confidentiality, dispute resolution and termination.

Independent Contractor Agreements are very common and can be used in almost any industry. They can be used when you outsource work to a contractor for on-demand services, expertise in a particular area or to complete specific tasks for a project.

A well written agreement will not only provide you with legal protection, it will also help manage your contractor’s expectations.

 

Do I need a contract?

Yes, definitely! A contract protects both you and your contractors.

Putting things in writing protects both parties and gives certainty.

Contracts are about more than wrapping your contractors up in red tape and telling them what they can’t do. Think of your contract as relationship insurance: it does all the hard, boring work of keeping the relationship on track, so you can focus on the fun part – the actual business.

 

Are there any other names for an Independent Contractor Agreement?

Yes, it’s also known as a Contractor Agreement, Freelance Agreement, Consulting Agreement or Services 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:

Contractual Relationship – makes it clear that the contractor is not an employee, agent or partner

Term – how long they will be engaged

Services – the services to be provided by the contractor

Scope – the scope of the services the contractor will provide

Equipment  – generally contractors provide their own equipment

Payment – covers payment terms

Statutory Obligations, Licences and Registrations – to make sure contractors comply with their legal obligations

Compliance – to make sure contractors follow your policies and procedures

Restraint – to protect the interests of the client. In practice this can be difficult to enforce.

Confidentiality – to keep confidential information private between the two parties

Intellectual Property – this covers the rights to intellectual property created

Guarantee and Warranties – guarantee as to due care and skill and any warranties provided by the contractor

Indemnity – important legal clause

Dispute Resolution – process to manage a dispute if a problem arises

Termination – this explains how either party can terminate the agreement

★ General – includes standard contract clauses such as Assignment, Severance, Entire Agreement, Waiver and Governing Law

★ Job Sheet – table with summary of the Job (services, scope, start date, key responsibilities etc)

 

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

🔹 have no guarantee of future work

 

Employees generally:

🔸 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

🔸 have the expectation of ongoing work

 

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.

 

Do contractors need an ABN?

Yes, they do. Contractors are self-employed individuals or companies. To legally operate as a contractor in Australia you need to register for a Tax File Number (TFN), Australian Business Number (ABN) and in certain circumstances you need to register for Goods and Services Tax (GST).

 

What is sham contracting?

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.

Our Independent Contractor Agreement template 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/daily 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.

Some factors that can influence the fees include the length of the project, the skills required to do the job and the scope or size of the project.

 

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. Please note, in practice this can be difficult to enforce and you should seek legal advice.

 

Can this Independent Contractor Agreement template be used by both contractors and businesses hiring them?

Yes, this template is suitable if you are a contractor, or a business looking to hire a contractor. However,​ if you’re a contractor, you may prefer to use a Service Agreement as the terms have been drafted to be more favourable for the contractor (service provider).

 

Can we negotiate on the key terms of the Independent Contractor Agreement?

You bet!

Before you kick off your project, you should discuss the commercial terms and negotiate a position that both parties are happy with.

Don’t forget to make sure that the terms you have agreed to are reflected in the final contract that both parties sign.

 

What can I do if things don’t work out?

We have included a termination clause in the contract which explains the conditions and notice period required for either party to terminate the agreement. For example. if one party breaches the agreement and fails to remedy the breach within 14 days, the other party is within their rights to cancel the contract.

Our template allows for the business (principal) to terminate for non performance or if the contractor fails to meet key responsibilities listed in the agreement.

 

Is this Independent Contractor Agreement template legally binding?

Absolutely!

All of our templates have been drafted by qualified Australian lawyers who hold an Australian legal practicing certificate.

We are affiliated with a commercial law firm based in Sydney.

 

Can’t I copy terms from someone else or download a free template off the internet?

We don’t recommend this approach for a few reasons:

1. You may be committing copyright infringement, which is against the law.

2. You might accidentally copy terms and conditions from another country – if you end up in court for some reason it might be on the other side of the world.

3. Our Independent Contractor Agreement template has been drafted by an Australian lawyer to make sure it’s legally binding here in Australia.

 

I have an Apple Mac – can I still use this template?

Yes, but we recommend you have Microsoft Word installed on your Mac.

Our documents contain smart fields which use a Microsoft Word feature called content controls. They help to save time in updating the template, but may not display correctly in Pages or Google Docs.

If you need a version of your template without the content controls, this is available for immediate download once you complete your purchase (you can download both versions).

Who is this for?

★ A business (“principal”) engaging a contractor for specific services or a project

★ Independent Contractor

★ Freelancer

Consultant

★ You want proper legal protection

★ You want to appear professional

★ You want to avoid misunderstandings and clearly define the business relationship with a contractor

★ It is NOT suitable for an employee

Why You Need This

Clearly set out your terms for contractors

You will appear more professional and avoid misunderstandings if you have a professional legal contract.

You can also refer back to the contract if there are any disputes with contractors about deliverables, payment etc.

Avoid Risk

A contract will help you to avoid risk and limit your liability if something does go wrong.

Protect your business and assets

As the old saying goes, hope for the best and prepare for the worst.

You never know what will happen in the future, but it is vital that you have a contract in place to protect everything you have worked hard for.

How does it work?

Our process is designed to be as easy as possible – you could be up and running in as little as 5-10 minutes.

1.  Select the Independent Contractor Agreement template in the Shop and click Add To Cart.

2.  Proceed to Checkout and complete your purchase.

3.  You will receive an email with a download link immediately after have completed your purchase

4.  Open the document in Microsoft Word and complete the highlighted fields with your personal information (name, ABN etc). Your document will be ready to go in minutes!

FAQ

Is this template editable?

Yes, the template comes in Word format so you are free to make changes to the document.

However, we do not recommend you make changes outside of the fields we have highlighted in the document. The clauses and wording have been written by a lawyer for a good reason. Deleting clauses or modifying them can affect the legal protections contained in the document.

 

What if the law changes?

If the law changes, we’ll email you with the changes and updates to add to your existing templates. So please ensure you keep us updated if your email address changes.

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MK
Maree K.
AU AU
I recommend this product
25 September 2020

So easy to use!

Such an easy and reliable way to be legally covered when bringing someone on! Plus it was cost effective and allowed me to get it sorted straight away without all the legal costs! Highly recommend!

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