Ten Key Provisions for Independent Contractor Agreements – Part 3 of our Updating

Briefly skipping over the important intellectual property ramifications of utilizing independent contractors rather than employees, I wanted to quickly review some of the important deal terms for independent contractor agreements, which are also available on a fully searchable basis at www.RealDealDocs.com.  I’ve also provided links to some recent independent contractor agreements filed by some public companies, such as this independent contractor agreement from an environmental consulting and technology provider based in Canada in addition to the ones found at the sites above.

It is generally good drafting to include the following terms in independent contractor agreements, particularly if your objective is to preserve independent contractor status rather than an employee relationship:

1.   Who the parties are and what is their intended relationship (i.e., independent contractor status)

2.   The services to be provided

3.   Compensation, the nature and timing of which contributes to the determination of independent contractor status

4.   Reimbursement of expenses

5.   Company’s cooperation obligations

6.   An affirmative representation of independent contractor’s understanding of tax obligations

7.   Ownership of work product, with particular attention to the assignment of intellectual property rights, which under statutory law in the US are automatically held by the independent contractor unless specifically assigned to the Company

8.   Confidentiality / non-disclosure and non-solicitation of employees or customers

9.   Termination provisions (the easier the independent contractor can terminate without penalty, generally the more likely an employee relationship is found)

10.   General provisions, including warranties, governing law provisions, arbitration, notices, survival, severability, assignability, indemnification, etc.

I should also mention that you can search here for specific deal clauses and provisions from independent contractor agreements, or from any other type of agreement for that matter.