Do you need to use an Independent Contractor Agreement? Yes.

Once you have made up your mind to use Independent Contractor Agreement (ICA.)  Then comes real hurdance. How to use it?

An independent contractor, or freelancer, is NOT an employee. This means that they are responsible for their own taxes, insurance, and benefits. They are self-employed.

In this contract, business owners will have less control over the independent contractor in project.

What it means is that a company or business will have authority. They can set deadlines, goalposts, and other parameters of the project.

The ICA is used to establish the expectations. They create terms, and legal obligations of the contractor and company.

Where is the BEST Place to Find a Good ICA?

The internet for free? Of Course it is. You can find an ICA online for free on the internet. But what is the guarantee that it is best for your business and work? It may be absolute trash. If you are going to use an ICA, at least use a good one. The one that will actually protect you and be worth money.

An attorney's office? If you are so rich and don't care about spending extra money, sure, go for it.

Some will say use AI. Same situation as getting it free on the internet, really? Are you sure AI is accurate?  Yes, AI has advanced. Is it that advanced that you can trust it blindly?

You are investing money. And your purpose is that ICA ensure that you and your business:

(1) Identify the Parties

Clearly identify the legal names of the company. Don't you forget to remember name of independent contractor. 

Use dbas (“does business as” names) as needed.

(2) Define the Scope of Work

Clearly describe the project and what services. BE AS SPECIFIC AS POSSIBLE. This will help avoid misunderstandings.

Like I said, be clear. Include all relevant project details. Like deadlines, milestones, and deliverables.

The Individual Legal Templates, likeICA legal templates will help you a lot. They have examples of what type of narratives to provide within the Scope of Work.

(3) Money, Money, Money

Specify the payment structure. This may be an hourly rate, or fixed fee. It can be different methods you have agreed upon.

Define the schedule for payment. Make sure you include how and when the contractor will be paid.

(4) Independent Contractor Status

I have already given information in my previous article. That contractor is not an employee. So no employee benefits will be given.

Make it clear in the contract that they must pay for their own taxes . Clear it out that they must comply with labor laws.

You may wish to provide the independent contractor a W-9 form. There are tax obligations in it that many people won't understand. Make sure that they understand their tax obligations.

(5) Intellectual Property Rights

Companies can have intellectual property rights. In some cases contractors, or joint ownership have intellectual property rights. Avoid misunderstandings! Specify who owns any intellectual property created during the project.

(6) Confidentiality and Non-Compete Clauses

Your company information is sensitive. If competitor has this information then you are at a serious disadvantage. Protect yourself and company. And include clauses that protect the company’s sensitive information.

If it is not during a project then your contractor might share information and work for your competition after ending your project. So  include clauses that prevent the contractor from competing with the company during and after the project.

(7) Dispute Resolution and Termination

There are many situations when you want to quit your work with a contractor. These are for the sake of business. There might be other reasons. But let's see what you can do about it.

Define the circumstances where either party is able to terminate the contract.

Prepare for conflicts. This is something a business owner should have grip on. Make clear and unbiased dispute resolution procedures. Like mediation and arbitration.

(8) Insurance and Liability

If the contractor needs to carry liability insurance, specify the coverage required.

There are cases when contractors damage others property during your project. If that happened. Clarify who is responsible for legal claims and damages.

(9) Governing Law, Signatures, and Dates

Indicate which state’s laws cover the agreement. Not every state and country has the same laws. (if in the USA; if not in the USA, determine and establish the country, region, or other appropriate jurisdiction)

Both parties need to sign and date the agreement.

Both parties should also keep a copy of the agreement.

In business relationships, oral agreement is like paper in the air. Put agreements in writing with the help of legal templates. It helps protect you and your business.

In both cases hiring an independent contractor, or you ARE the independent contractor. Make sure you have contract in writing by filling Independent Contractor Agreement template.

You might think that talking about conflict and legal issues makes them uncomfortable.  But now your money and savings are there. Make them at least a little uncomfortable to make sure you are on the same page. You and the contractor.