What Is An Independent Contractor Agreement?

What is an independent contractor agreement? Get educated today by learning the accurate real facts on the topic.

In simple terms, the definition of the term independent contractor is any free corporation, any person or any business that renders services and provides goods, clearly mentioned under the written or verbal contract, to any other entity. The verbal contract is known as the independent contractor agreement.

It is not necessary that a contractor will always work and also work for the same employer. An independent contractor works whenever he is required. Mostly during the time of his employment with the employer, the independent contractor is bound to the laws and rules of that company.

The remuneration received by an independent contractor is on a freelance basis. The same is for someone involved in a land contract agreement. The only different tends to be the consequences.

It sometimes becomes difficult to determine who is an independent contractor and who is a regular employee. The IRS has laid down some guidelines in order to make this comparison easy.

According to them, when we look at an independent contract versus an employee we must look at three things – the behavioural and financial control and the relationship between the parties.

Legal Facts Of An Independent Contractor Agreement

Usually an independent contractor has full control over the hours he works and jobs he does as opposed to a regular employee. Also independent contractors do not have income taxes suspended from them.

The calculation of taxes for an independent contractor is often more complicated than regular employees. An independent contractor is free to set his own terms and conditions relating to any job he is asked to do. Regular Employees cannot do this.

The agreement or contract that binds an independent contractor with the company he renders services to, is called an independent contractor agreement. Independent contractors usually do various jobs through their own limited companies or might work through a company that acts as their employer (this is called an umbrella company).

An independent contractor agreement is a simple document that clearly lists the name of the contractor(s) and the company. It also lists the jobs that will be done, the services that will be provided, what the remuneration will be and also lists the name(s) of any subcontractor if there are any.

Thus the independent contractor agreement is basically like an employment agreement between the contractor and the company. You can get a sample of the agreement from the internet that can help you in drafting your own version. 

What Is The Purpose Of Getting This Type Of Agreement?

If a contractor gets into a non disclosure agreement with the company then they have the option of limiting what information, knowledge and material can and cannot be accessed, viewed and used by each party. This agreement usually also lists the restriction of such material by any third party.

Some places of work where it is quite typical to have an independent contractor agreement are in real estate, sales, personal training, engineering field, legal field and in the medical field.

Independent Contractors are free to choose their own path and are their own bosses in most cases. This can be really a gift for those people who cannot work for anyone but themselves.

Before beginning work as an independent contractor, one must always draw up a sample agreement and then come up with the final version of their independent contractor agreement.

Go back to the agreements category page or the land contract forms home page.