Legal Agreement With an Independent Contractor

Independent Contractor Agreement

This Agreement is made and entered into this ————- day of ————- 2013

Between

  1. [Insert company name] (hereinafter referred to as “the Company”) of [insert company’s registered business address]
  2. [Insert service provider’s name] (hereinafter referred to as “the Contractor”) of [insert Company’s registered business address].

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. 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.

Exclusivity

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.

Term

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.

Compensation

  1. As full compensation for the services rendered under this Agreement, the Company shall pay the Contractor at the hourly rate of [insert currency and rate] per hour, with total payment not to exceed [insert currency and amount] without prior written approval by an authorized representative of the Company. Such compensation shall be payable within [insert agreed period] of receipt of the Contractor’s monthly invoice for services rendered.
  2. As full compensation for the services rendered under this Agreement, the Company shall pay the Contractor the sum of [insert currency and amount], to be paid [insert time and conditions of payment.]

Invoicing

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].

Expenses

  1. All disbursements and expenses incurred by the Contractor in the course of carrying out work on the Company’s instructions must be approved in advance by the Company and shall be separately remunerated on presentation of an invoice, receipt, or other documentary evidence of the expenditure in such form as is sufficient for accountancy purposes.
  2. No reimbursement need be made by the Company to the Contractor in respect of disbursements or expenses in respect of which the Company has not granted prior approval or in respect of which no sufficient documentary evidence is produced by the Contractor.
  3. Notwithstanding the foregoing, expenses for the time spent by the Contractor in traveling to and from Company facilities shall not be reimbursable.

Waiver

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

  1. The Company and the Contractor acknowledge to one another that as a result of this business relationship, the Contractor will have confidential customer information, trade secrets, technical data, and know-how relating to the products, processes, methods, equipment, and business practices of the Company and its clients (the “Confidential Information”). Such Confidential Information includes, but is not limited to, technical and business information relating to the Company’s products, research and development, strategies and methods which are not standard industry practices, specifications, proposals, reports, analyses, finances, client details, marketing, production and future business plans, business and personal data relating to clients, affiliates and Contractors of the Company.
  2. The Contractor agrees that [he/she/it] shall maintain in confidence and shall not disclose or use, at any time during or after the term of this Agreement without the prior written consent of the Company, any Confidential Information whether or not it is in written or permanent form.
  3. Upon termination of this Agreement or upon request by the Company at any time before or after such termination, the Contractor shall deliver to the Company all written and tangible material in the Contractor’s possession incorporating the Confidential Information or otherwise relating to the Company’s business.
  4. These obligations concerning the Confidential Information extend to information belonging to clients and suppliers of the Company, or persons or entities which license confidential information or technology rights of the Company, who may have disclosed such information to the Contractor as the result of the Contractor’s business relationship with the Company.

Inventions

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.

Assignment

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.

Non-Hire Provision

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.

Merger

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

Insurance

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.

Termination

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

  1. All notices, demands, or communications which are required under this Agreement and invoices shall be deemed given (and concerning invoices deemed received) on the date of receipt, if personally delivered, when sent by email, fax, or by post, and addressed to the parties at their above addresses or such other address as either party may designate in writing from time to time, and if given in any other manner, shall be deemed given upon actual receipt.
  2. Any notice so served by email, fax, or post shall be deemed to have been received: in the case of email or fax, twelve (12) hours after the time of dispatch; in the case of recorded delivery or registered post, forty-eight (48) hours from the date of posting.

Assignment

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.

Entire Agreement

The invalidity, in whole or in part, of any term of this Agreement, does not affect the validity of the remainder of the agreement.

Severability

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.

Force Majeure

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.

Waiver

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.

Language

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].

Arbitration

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.].

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.

As witnessthe parties have executed this Agreement effective as of the date of the Contractor’s acceptance below.

CONTRACTOR
By: __________________________
[Insert signature]
[Print full legal name & position]

COMPANY
By: _______________________________
[Insert signature]
[Print full legal name & position]

The meaning of legal terms used in the contract

  • Hereby-by virtue of
  • Render-make
  • Prior-before
  • 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
  • Deemed-assumed
  • 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.

Arbitration

It provides a method of solving conflicts that may arise in the cause of fulfilling the contract between the two parties.

Assignment

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.

Compensation

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.

Entire Agreement

It explains piecemeal interpretations of the agreements and their validity

Exclusivity

It explains the importance of the contract over all other agreements.

Expenses

It explains how the contractor is to be reimbursed in case of extra expenses from their monies.

Force Majeure

It explains the superiority of the contract over other agreements that either party may get into in the course of the contract.

Headings

It elaborates on how various titles should be interpreted.

Insurance

It explains the nature and validity of insurance policies that may be sorted by either party.

Invennins

This clause sets the path straight about discoveries or other related inventions by either party during the contract.

Invoicing

It explains how to fill and submit invoices.

Language

The clause specifies the language to be used in interpreting the contract.

Merger

Explains what should happen in case the company is merged with other companies in the course of the contract.

Non-Hire Provision

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.

Severability

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.

Term

It gives details on the duration of the contract from the beginning to the end.

Termination

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.

Waiver

It brings out situations that may lead to the nullification of the whole contract.

Written reports

It elaborates on the impacts of the various reports that may contradict the terms of the contract.

  1. 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.
  2. 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).
  3. 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.
  4. 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).
  5. 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.
  6. 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.
  7. The contract binds the contractor after completion in terms of who he can employ or hire.
  8. 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.
  9. 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.

Works Cited

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.