What Are the Key Elements of an Agreement with an Independent Contractor?

Your business must have a good form of Independent Contractor Agreement to mitigate liability and cost issues. A good agreement will often cover these seven items.

I am thinking of hiring a consultant/independent contractor. I expect I should have a written agreement so as to avoid any misunderstandings. What are the key elements I should worry about for an Independent Contractor Agreement?

Your business must have a good form of Independent Contractor Agreement to mitigate liability and cost issues. A good agreement will often cover the following:

• The specific services to be performed
• The timing when services are to be completed
• When the contractor will get paid, and what conditions to payment must be satisfied (you want to ensure that you are reasonably satisfied with the contractor's work before you have to pay)
• How often the contractor should report to you on his progress
• An obligation on the part of the contractor to keep confidential the information he learns through working with your company
• That the work being performed by the contractor is "work for hire,", and that any work product of the contractor will be deemed solely owned by the company
• Any warranties to be given by the contractor, such as that the work will be performed in a high quality professional manner

Check out the Agreements & Forms Center of www.AllBusiness.com for sample Independent Contractor Agreements.

In addition, you can read our Nine Tips to Create Better Contracts for guidelines that apply to your letter of intent and other crucial business agreements. Also, to cover the legal uncertainties of electronic communication, you might want to read the answer to the common question, "Can an email agreement be a binding contract?"

Find more information on effectively using independent contractors to help your business grow at AllBusiness.com.

Copyright © 1999 - 2007 AllBusiness.com, Inc. All rights reserved.