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.
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.
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:
The relevant personal details of the parties such as full name, residential addresses and ages of the parties to the agreement,
Duties and responsibilities of and between the parties,
The consideration / amount / payments / expenses / bills involved,
Duration or the term of the agreement,
Penalty clause explaining the details of what the penalty would be if either party defaults in fulfilling its duties in accordance with the agreement,
Warranty details, mentioning the product and service warranties as agreed between the parties,
General clauses such as termination of agreement, applicable laws, dispute settlement clause, confidentiality, intellectual property rights, etc.) and
Date of signing of the agreement.
Draft of Agreement between Independent Contractor and Service Provider
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.]
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.
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.
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.
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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