What Is an Independent Contractor Agreement?

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What Is an Independent Contractor Agreement?

An independent contractor agreement as the name suggests is a document which highlights the manner in which an independent contractor is engaged by a company and the details which are formulated therein. It is a legal document and thus it must be written with care and consideration. An independent contractor agreement of a particular state of the United States will be formulated based on the laws of that state itself. Thus, it varies from state to state and location to location as statutes under the law keep changing. Some important factors to be kept in mind while writing these contractor agreements are as follows:

  • An independent contractor agreement must be written in accordance with the laws of the land, so that in case of non-performance of promised services, financial irregularities and non-compliance with company policy, the case can be referred to the tribunal of the state. It must be written accurately so that all information provided in this agreement is correct. In case of a breach of contract, the document will be referred to resolve the issue.
  • An independent contractor agreement must provide all the necessary information about the agreement. It must include the details of the independent contractor whose services have been hired, the duration of the agreement, the dates of commencement and termination, the financial transactions between the company hiring and the independent contractor and so on. This must be done in a clear and lucid manner so that the document can also have later reference value. It must be such that it can be referred back to in the later stages of the agreement as well.
  • An agreement must be written in a manner which is in sync with the legal terminology and jargon such documents are expected to adhere to. It must thus be written by a professional who is well versed in the composition of legal documents.

Benefits of an Independent Contractor Agreement

Such independent contractor agreements are important in many ways. Some of them are:

  • They lend a great deal of transparency and clarity to a particular agreement between a company and an independent contractor which would otherwise have resulted in confusion and chaos.
  • They also ensure that the court retains a copy of the document so that it can use it to resolve disputes(1) between the two parties involved. By being submitted before the law, the document is ratified and validate legally.