Independent contractor agreements are important for anybody who runs a business, performs services for others, or works with outside service providers. you work or perform a service for another person or business, and you are not an employee, then you are an independent contractor. To add, if you do work for or provide a service to any other person or business you c= have to ask yourself one question. “Am I an employee?” If the answer is no, then you are a contractor. (If you aren’t sure of the answer, talk to an attorney.)
Particularly, services providers, ie. independent contractors, should have a written agreement to use with clients or customers. A written agreement, even a really simple one, can provide clarity. In addition, prevent tension, confusion, and legal disputes, and can support your professional relationships.
A few terms and provisions commonly found in independent contractor agreements:
- First, services. This one should be obvious, but the agreement should describe the services that you are providing. What kind of work will you be doing? What is the client expecting to receive? Are there any requirements or restrictions on how, when, or where you do the work?
- Second, compensation. Again, pretty obvious. How much is the client paying you? Is it a flat fee, hourly rate, commission-based? When are you getting paid?
- Expenses. Let’s say you’re going to have to buy some materials or equipment, or you are going to have to drive around and travel a lot for your client. The agreement should address which one of you pays for those costs or if you will be reimbursed for mileage and travel.
In sum, agreements come in many shapes and sizes. That’s why it is important that your independent contractor agreement is drafted specifically for you, your business, and your specific situation and needs. This episode of All Up In your business is about what to include in your agreements.