|Independent Contractor Agreement |
This Agreement is made and entered into this ————- day of ————- 2013
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. The Contractor is and shall remain an independent contractor in [his/her/its] relationship to the company, and this agreement shall not render the Contractor an employee, partner, agent of or joint-venture with the Company for any purpose.
The Company shall not be responsible for withholding taxes concerning the Contractor’s compensation hereunder, and the Contractor shall not be eligible for paid vacation, unemployment insurance benefits, health insurance, health or disability benefits, sick leave, retirement benefits, workers’ compensation, employee benefits of any kind or any other benefits from the Company.
The Contractor shall provide services to the Company from the date of this agreement on an exclusive basis in the business areas defined in clause 3 below. The Contractor shall devote [his/her/its] best efforts and attention to the performance of [his/her/its] duties under this Agreement, and shall not engage in any other business duties, activities, or employment without the prior verbal or written consent of the Company.
Services to Be Provided
The Contractor will [describe here the work or service to be performed]. [He/she/it] will report directly to [insert name or title of the person responsible] and to any other party designated by [insert name or title of the person responsible] 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.
This engagement shall commence upon execution of this Agreement and shall continue in full force and effect until [insert end 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 by this Agreement.
Payment by the Company to the Contractor in respect of the services provided by the The contractor shall be made against itemized invoices presented in writing and delivered [specify means of delivery] by the Contractor to the Company, with a payment period of [insert period].
The failure of either party to enforce any provisions of this Agreement shall not be deemed a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this Agreement.
Trade Secrets and Confidentiality
Any 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 the all right title and interest in the same to the Company. Any inventions, discoveries, developments, and innovations conceived by the Contractor before the term of this Agreement and utilized by [him/her/it] in rendering duties to the Company are hereby licensed to the Company for use in its operations and 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.
The Contractor affirms that [he/she/it] 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/her/its] duties shall not utilize any invention, discovery, development, improvement, innovation, or trade secret in which [he/she/it] does not have a proprietary interest. During the term of this agreement, the Contractor shall devote such time, energy, and ability to the performance of the duties and obligations stipulated hereunder as is necessary to perform such duties and obligations in a timely and productive manner.
For six months following any termination, the Contractor shall not, directly or indirectly hire, solicit, or encourage the Contractor 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.
This Agreement shall not be terminated by the merger or consolidation of the Company into or with any other entity.
The Contractor shall carry liability insurance (including malpractice insurance, if warranted) relative to any service that [he/she/it] performs for the Company.
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.
This Agreement may be terminated by either party on the provision of one month’s notice in writing to the other party. Also, if the Contractor is convicted of any crime, fails or refuses to comply with the written policies or reasonable directives 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.
Service of Notices
The rights, duties, and obligations contained in this Agreement are personally binding upon the parties to the Agreement and may not be assigned by either party without the written permission of the other party.
The invalidity, in whole or in part, of any term of this Agreement, does not affect the validity of the remainder of the agreement.
No variation of this Agreement (or any document entered into under this Agreement) shall be valid unless it is in writing and signed by or on behalf of each of the parties hereto.
This Agreement constitutes the entire agreement between the parties and supersedes all prior correspondence, discussions, agreements, and understandings, unless otherwise mutually agreed in writing after the execution of this Agreement.
Neither party hereto shall be liable to the other for failure to perform any obligation hereunder, other than an obligation to pay monies, during such time that performance of that obligation is rendered impossible due to an act of God, fire, flood, or another natural catastrophe, caused by any circumstances beyond its reasonable control, including but not limited to defaults of suppliers or subcontractors and all types of industrial disputes, lockouts, and strikes.
The English language shall be the controlling language to interpret this Agreement, and all correspondence between the Contractor and the Company shall be in the English language.
Choice of Law
This Agreement shall be construed and enforced by the [insert governing legal system].
Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof shall be finally settled in [insert venue of arbitration, rules to be followed, etc.].
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.
As witnessthe parties have executed this Agreement effective as of the date of the Contractor’s acceptance below.
The meaning of legal terms used in the contract
- Hereby-by virtue of
- Execution-performing a task
- Pursuant to-according to
- Strict compliance-adherence to given rules
- Disclose-bring out
- Assigns- allocates a piece of work
- Merger- combining aspect
- Binding-obligating one to
- Construed-given by
- The titles have been exerted in the contact statement after a careful study of the document.
- Short explanations of the requirements of each clause.
It provides a method of solving conflicts that may arise in the cause of fulfilling the contract between the two parties.
It explains the task to be performed during the contract and it is the reason for hiring the contractor in the first place.
Choice of Law
It specifies the particular legal principles applicable to this specific contract.
It explains the remuneration or payment to a party for tasks performed after completion.
Conflict of Interest
It elaborates what is to be done in case individual interests that are against the contract emerge as well as prevents the parties from the contract from taking part in activities that directly conflict with the task to be performed.
It explains piecemeal interpretations of the agreements and their validity
It explains the importance of the contract over all other agreements.
It explains how the contractor is to be reimbursed in case of extra expenses from their monies.
It explains the superiority of the contract over other agreements that either party may get into in the course of the contract.
It elaborates on how various titles should be interpreted.
It explains the nature and validity of insurance policies that may be sorted by either party.
This clause sets the path straight about discoveries or other related inventions by either party during the contract.
It explains how to fill and submit invoices.
The clause specifies the language to be used in interpreting the contract.
Explains what should happen in case the company is merged with other companies in the course of the contract.
It prevents one party from hiring employees of the other within a specified period after the contract.
Service of Notices
It gives the procedure to be followed in serving notices.
Services to Be Provided
This clause explains the particular task to be performed during the duration of the contract.
Elaborates how punitive, non-adherence to the terms of the contract can be detrimental.
Successors and Assigns
It explains how successors and other similar parties can affect the contract.
It gives details on the duration of the contract from the beginning to the end.
It explains how the contract can be brought to an end and what actions can lead to such a decision.
Trade Secrets and Confidentiality
This clause prevents the parties from exposing confidential information related to the business to a third party not stated in the contract.
It brings out situations that may lead to the nullification of the whole contract.
It elaborates on the impacts of the various reports that may contradict the terms of the contract.
- The contract starts upon signing of the agreement and ends on the date that is to be specified under the end of the termination clause.
- The contract has to complete the tasks specified in the contract. They will then serve the company with the invoice containing the amounts to be paid. Payments will be made after processing of the invoice (Randy 33).
- Expenses paid from the contractor’s pocket to cater for the contractual assignments are paid back to together with their remuneration. He is expected to specify such payments on the invoice and they should be supported with their specific receipts.
- The contractor is allowed to work for others as per the terms of the contract, but he is expected to give more priority to this contract (Ewan 42).
- A third party like the contractor’s son or wife can only take up the contractual assignments after the contractor agrees with the company on such arrangements in writing and the company must agree if not then a third party cannot transact.
- Intellectual property relates to many inventions and discoveries that may come up in the course of the contract. Such properties are owned by the company and not the contractor as it is clearly stated under the invention clause.
- The contract binds the contractor after completion in terms of who he can employ or hire.
- The contractor is restricted from setting up his own business with any of the employees of the company six months after completion of the contract.
- In the case of disagreements between the contractor and the company, they should make use of the arbitration clause. The arbitration clause contains the rules and venue at which the conflict will be resolved. The rules are specified by the parties to the contract at the time of signing the contract and hence they should be adhered to in case of any breach of contract or dispute (Atiyah 56).
Final analysis and conclusion
The contract is a bit fair, although to some extent it favors the company. It is fair in that at the end of it all the contractor is fully compensated for the work done and any expenses incurred from their own pockets reimbursed as long as they can provide proof of the expenses incurred. The company also benefits from the services rendered by the contractor thus they have nothing to lose since their business secrets are safe as per the terms of the contract and if the other partner gives out any of their insider information then they will be liable to prosecution by law.
However, it is unfair that the contractor does not gain anything from the intellectual properties that may come up in the course of the contract. The terms are clear that any such inventions will be the sole property of the company and this may make the employees of the company reluctant to provide all their expertise as well as explore their creative potential for the fear of not being recognized. The company is not expected to pay for such discoveries in any way as it is not stated in the contract and making the company pay will result in a breach of the contract yet a contract is usually protected by law.
Atiyah, Philip. The Rise and Fall of Freedom of Contract. New York, NY: Clarendon Press, 2009. Print.
Ewan, McKendrick. Contract Law – Text, Cases and Materials, London, UK: Oxford University Press, 2006. Print.
Randy, Barnett. Contracts. London, UK: Aspen Publishers, 2010. Print.