The Importance of a Written Independent Contractor Agreement
We have written before about contracts being important because they lay out the "rules of the game" if you will. They outline the terms and conditions so each side knows what they are getting and more importantly, what they aren't getting. Independent Contractor agreements are no different in that regard and can save you some pretty nasty problems in the future.
1. Independent Contractor vs. Employee. When engaging someone to do work for you or your business, you have to decide if you want them to be an employee or Independent Contractor. When you have employees there are a lot of rules and regulations surrounding that engagement and you have a lot more responsibility surrounding them and their actions. With an Independent Contractor the rules and regulations are different, but still there. If you lay out their status beforehand in an Employment Agreement, for employees, or Independent Contractor Agreement, for Independent Contractors, then the individual or company will have a clear understanding of their status in regard to you. This can save you from huge headaches in the future.
2. Protect Your Business. An Independent Contractor agreement will also serve to protect your confidential information from being shared, for example your pricing, your know-how, your processes, financial information or your ideas. It will also prevent your contractor from taking advantage of working for your business just to leave you to start a similar business that competes for your customers.
3. Outline of Duties. Being clear up front as to the duties of the Independent Contractor and what they can and cannot do is vital. Having a good social media clause and a description of duties goes a log way to keeping your expectations and their expectations on the same page. Minimizing confusion is a great way to minimize disputes which minimizes litigation.
4. Arbitration. Speaking of minimizing litigation, it is always vital and necessary, from my perspective, to have an arbitration clause in Independent Contractor agreements. This takes you away from a dispute arising and the other party going directly to the courthouse. It gives you time to try to come to an agreement with a knowledgeable and insightful arbitrator without all the crazy litigation rules and fees.
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Written by Intuitive Edge Team