Agreement between Independent Contractor and Service Provider

What is Agreement between Independent Contractor and Service Provider?

An agreement between independent contractor and service provider is signed between them in order to acknowledge future business prospects. An agreement of this nature is a legal document and a written promise to carry out the business, on terms and conditions as described by the Agreement between the parties. This document officially records the terms between the parties - including each party’s duties and expenses involved.

Why is Agreement between Independent Contractor and Service Provider required?

An agreement between an independent contractor and service provider is an official record - capturing the essential information regarding the partnership between the said parties. Such an agreement officially records the specific terms, based upon which the business between these parties shall be conducted.  It is an important step as all the rights and liabilities of both the parties are stated clearly and thus avoids future legal trouble and confusion. Its main purpose is to serve as written evidence of the promises made between the parties, which in turn ensures that the parties will fulfill these promises. It is a legal document and is enforceable in the Court of law.

What should a Agreement between Independent Contractor and Service Provider cover?

 

It should consist of all the necessary terms and conditions. The following are important terms (among others) that must be included in an agreement of this nature:

1. The relevant personal details of the parties such as full name, residential addresses and ages of the parties to the agreement, 

2. Duties and responsibilities of and between the parties,

3. The consideration / amount / payments / expenses / bills involved, 

4. Duration or the term of the agreement, 

5. Penalty clause explaining the details of what the penalty would be if either party defaults in fulfilling its duties in accordance with the agreement, 

6. Warranty details, mentioning the product and service warranties as agreed between the parties,

7. General clauses such as termination of agreement, applicable laws, dispute settlement clause, confidentiality, intellectual property rights, etc.) and

8. Date of signing of the agreement. 

Format for Agreement between Independent Contractor and Service Provider

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Draft of Agreement between Independent Contractor and Service Provider


This agreement is only a guideline it can be costumesied as per the requirement

This Agreement is entered into as of the ________ day of ________________, 20____, between [ABC company located at ______] (Hereinafter referred as "the Company") and [XYZ service provider's name] (Hereinafter referred as the "the Contractor" for the sake of brevity).

1.     Independent Contractor. Subject to the terms and conditions of this Agreement, the Company hereby engages the Contractor as an independent contractor to perform the services set forth herein, and the Contractor hereby accepts such engagement.

2.     Duties, Term, and Compensation. The Contractor's duties, term of engagement, compensation and provisions for payment thereof shall be as set forth in the estimate previously provided to the Company by the Contractor and which is attached as Exhibit A, which may be amended in writing from time to time, or supplemented with subsequent estimates for services to be rendered by the Contractor and agreed to by the Company, and which collectively are hereby incorporated by reference.

3.     Expenses. During the term of this Agreement, the Contractor shall bill and the Company shall reimburse [him or her] for all reasonable and approved out-of-pocket expenses which are incurred in connection with the performance of the duties hereunder. Notwithstanding the foregoing, expenses for the time spent by Contractor in traveling to and from Company facilities shall not be reimbursable.

4.     Written Reports. The Company may request that project plans, progress reports and a final results report be provided by Contractor on a monthly basis. A final results report shall be due at the conclusion of the project and shall be submitted to the Company in a confidential written report at such time. The results report shall be in such form and setting forth such information and data as is reasonably requested by the Company.

5.     Inventions. Any and all inventions, discoveries, developments and innovations conceived by the Contractor during this engagement relative to the duties under this Agreement shall be the exclusive property of the Company; and the Contractor hereby assigns all right, title, and interest in the same to the Company. Any and all inventions, discoveries, developments and innovations conceived by the Contractor prior to the term of this Agreement and utilized by [him or her] in rendering duties to the Company are hereby licensed to the Company for use in its operations and for an infinite duration. This license is non-exclusive, and may be assigned without the Contractor's prior written approval by the Company to a wholly-owned subsidiary of the Company.

6.     Confidentiality. The Contractor acknowledges that during the engagement [he or she] will have access to and become acquainted with various trade secrets, inventions, innovations, processes, information, records and specifications owned or licensed by the Company and/or used by the Company in connection with the operation of its business including, without limitation, the Company's business and product processes, methods, customer lists, accounts and procedures. The Contractor agrees that [he or she] will not disclose any of the aforesaid, directly or indirectly, or use any of them in any manner, either during the term of this Agreement or at any time thereafter, except as required in the course of this engagement with the Company. All files, records, documents, blueprints, specifications, information, letters, notes, media lists, original artwork/creative, notebooks, and similar items relating to the business of the Company, whether prepared by the Contractor or otherwise coming into [his or her] possession, shall remain the exclusive property of the Company. The Contractor shall not retain any copies of the foregoing without the Company's prior written permission. Upon the expiration or earlier termination of this Agreement, or whenever requested by the Company, the Contractor shall immediately deliver to the Company all such files, records, documents, specifications, information, and other items in his possession or under [his or her] control. The Contractor further agrees that he will not disclose his retention as an independent contractor or the terms of this Agreement to any person without the prior written consent of the Company and shall at all times preserve the confidential nature of his relationship to the Company and of the services hereunder.

7.     Conflicts of Interest; Non-hire Provision. The Contractor represents that he is free to enter into this Agreement and that this engagement does not violate the terms of any agreement between the Contractor and any third party. Further, the Contractor, in rendering his duties shall not utilize any invention, discovery, development, improvement, innovation, or trade secret in which he does not have a proprietary interest. During the term of this agreement, the Contractor shall devote as much of his productive time, energy and abilities to the performance of his duties hereunder as is necessary to perform the required duties in a timely and productive manner. The Contractor is expressly free to perform services for other parties while performing services for the Company. For a period of six months following any termination, the Contractor shall not, directly or indirectly hire, solicit, or encourage to leave the Company's employment, any employee, consultant,or contractor of the Company or hire any such employee, consultant, or contractor who has left the Company's employment or contractual engagement within one year of such employment or engagement.

8.     Right to Injunction. The parties hereto acknowledge that the services to be rendered by the Contractor under this Agreement and the rights and privileges granted to the Company under the Agreement are of a special, unique, unusual, and extraordinary character which gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated by damages in any action at law, and the breach by the Contractor of any of the provisions of this Agreement will cause the Company irreparable injury and damage. The Contractor expressly agrees that the Company shall be entitled to injunctive and other equitable relief in the event of, or to prevent, a breach of any provision of this Agreement by the Contractor. Resort to such equitable relief, however, shall not be construed to be a waiver of any other rights or remedies that the Company may have for damages or otherwise. The various rights and remedies of the Company under this Agreement or otherwise shall be construed to be cumulative, and no one of the them shall be exclusive of any other or of any right or remedy allowed by law.

9.     Merger. This Agreement shall not be terminated by the merger or consolidation of the Company into or with any other entity.

10.  Termination. The Company may terminate this Agreement at any time within ".....working days''  by a written notice to the Contractor. In addition, if the Contractor is convicted of any crime or offense, fails or refuses to comply with the written policies or reasonable directive of the Company, is guilty of serious misconduct in connection with performance hereunder, or materially breaches provisions of this Agreement, the Company at any time may terminate the engagement of the Contractor immediately and without prior written notice to the Contractor.

11.  Independent Contractor. This Agreement shall not render the Contractor an employee, partner, agent of, or joint venture with the Company for any purpose. The Contractor is and will remain an independent contractor in [his/her] relationship to the Company. The Company shall not be responsible for withholding taxes with respect to the Contractor's compensation hereunder. The Contractor shall have no claim against the Company hereunder or otherwise for vacation pay, sick leave, retirement benefits, social security, worker's compensation, health or disability benefits, unemployment insurance benefits, or employee benefits of any kind.

12.  Insurance. The Contractor will carry liability insurance (including malpractice insurance, if warranted) relative to any service that [he or she] performs for the Company.

13.  Successors and Assigns. All of the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, if any, successors, and assigns.

14.  Choice of Law. The laws of the state of [______________] shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties hereto.

15.  Arbitration. Any controversies arising out of the terms of this Agreement or its interpretation shall be settled in [____________________] in accordance with the rules of the American Arbitration Association, and the judgment upon award may be entered in any court having jurisdiction thereof.

16.  Headings. Section headings are not to be considered a part of this Agreement and are not intended to be a full and accurate description of the contents hereof.

17.  Waiver. Waiver by one party hereto of breach of any provision of this Agreement by the other shall not operate or be construed as a continuing waiver.

18.  Assignment. The Contractor shall not assign any of [his or her] rights under this Agreement, or delegate the performance of any of [his or her] duties hereunder, without the prior written consent of the Company.

19.  Notices. Any and all notices, demands, or other communications required or desired to be given hereunder by any party shall be in writing and shall be validly given or made to another party if personally served, or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice or demand is served personally, notice shall be deemed constructively made at the time of such personal service. If such notice, demand or other communication is given by mail, such notice shall be conclusively deemed given five days after deposit thereof in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as follows:

If to the Contractor:

[ name and complete address]

If to the Company:

[ name & Complete Address]

Any party hereto may change its address for purposes of this paragraph by written notice given in the manner provided above.

20.  Modification or Amendment. No amendment, change or modification of this Agreement shall be valid unless in writing signed by the parties hereto.

21.  Entire Understanding. This document and any exhibit attached constitute the entire understanding and agreement of the parties, and any and all prior agreements, understandings, and representations are hereby terminated and canceled in their entirety and are of no further force and effect.

22.  Unenforceability of Provisions. If any provision of this Agreement, or any portion thereof, is held to be invalid and unenforceable, then the remainder of this Agreement shall nevertheless remain in full force and effect.

IN WITNESS WHEREOF the undersigned have executed this Agreement as of the day and year first written above. The parties hereto agree that facsimile signatures shall be as effective as if originals.

[Company name]

By:____________________

Its:____________________ [title or position]

[Contractor's name]

By:____________________

Its:____________________ [title or position]


 





SCHEDULE A

DUTIES, TERM, AND COMPENSATION

DUTIES: The Contractor will [describe here the work or service to be performed]. [____] will report directly to [name] and to any other party designated by [name] in connection with the performance of the duties under this Agreement and shall fulfill any other duties reasonably requested by the Company and agreed to by the Contractor.

TERM: This engagement shall commence upon execution of this Agreement and shall continue in full force and effect through [date] or earlier upon completion of the Contractor's duties under this Agreement. The Agreement may only be extended thereafter by mutual agreement, unless terminated earlier by operation of and in accordance with this Agreement.

COMPENSATION: (Choose A or B)

A.    As full compensation for the services rendered pursuant to this Agreement, the Company shall pay the Contractor at the hourly rate of [dollar amount] per hour, with total payment not to exceed [ amount] without prior written approval by an authorized representative of the Company. Such compensation shall be payable within 30 days of receipt of Contractor's monthly invoice for services rendered supported by reasonable documentation.

B.    As full compensation for the services rendered pursuant to this Agreement, the Company shall pay the Contractor the sum of ____________________ [ amount], to be paid _______________ [time and conditions of payment.]

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Documents Required for Agreement between Independent Contractor and Service Provider

There are no specific documents required for the drafting and execution of an agreement between an independent contractor and a service provider. However, ID proofs of the parties in order to confirm the names and permanent addresses of the parties shall be scrutinized. Moreover, papers evidencing the parties’ rights to carry out the business (as per the agreement) and provide the service(s) in question, could be examined. 

Procedure for Agreement between Independent Contractor and Service Provider

No set procedure is applicable in the making of such an agreement. However, once the agreement has been drafted by a lawyer, it should be specifically and carefully read by both the parties to the agreement. Any necessary changes required to be made shall be carried out and once the agreement is finalised, it shall be signed by both the parties along with the requisite witnesses. The said agreement is legally binding when it is printed on judicial stamp paper/e-stamp paper and signed by both the parties. The stamp paper value (if relevant) depends on the particular State in which it is executed. Each party should thereafter keep a signed copy of this agreement between the independent contractor and service provider. 

Legal Considerations for Agreement between Independent Contractor and Service Provider

An independent contractor could possibly be a company, an individual or a business which provides goods or services to the other party i.e. service provider, based upon the specific terms and conditions between the parties (as stated in the agreement between them). An agreement of this kind is a legal document and the legality of such documents depends on the fulfilment of requirements as per the law, such as printing on a judicial / e-stamp paper of the correct value and signing of the agreement by both parties. The agreement can be modified or amended as per the terms of the agreement. 

How can a lawyer help to draft Agreement between Independent Contractor and Service Provider?

One of the first and the most important steps that you must undertake is to hire a good documentation lawyer, as he/she is aware of the nitty gritty of the legal procedures and necessary requirements involved in drafting of agreements between independent contractors and service providers. A lawyer would draft such an agreement, better than you can yourself, for obvious reasons. A lawyer has the necessary legal knowledge and experience to handle and draft documents. He/She will be able to guide you and draft for you according to your particular situation -  the facts, circumstances, business risks and needs involved. A documentation lawyer is aware of good drafting technique and the clauses that must be included in your agreement. Hiring a good lawyer in order to draft such important legal documents is a prerequisite and will help you in more ways than one. 

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