Template · Independent Contractor Agreement

Free Independent Contractor Agreement Template

Full contractor agreement with Exhibit A for scope and compensation. Every clause explained in plain English so you understand exactly what you're agreeing to.

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For informational purposes only — not legal advice.

Clause risk indicators

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Standard

Header: Parties and Date

INDEPENDENT CONTRACTOR AGREEMENT Entered into as of [DATE] between: [COMPANY NAME], a [entity type] organized under the laws of [State] ("Company"); and [CONTRACTOR NAME], an independent contractor ("Contractor").

If you operate through an LLC or S-Corp, contract in the entity's name. This separates personal liability from business liability and reinforces independent contractor status.

1. Services

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(a) Engagement: Contractor performs Services described in Exhibit A, professionally and per industry standards. (b) Change Orders: Out-of-scope work requires a written change order signed by both parties before Contractor performs it. (c) Tools: Contractor provides own tools unless Exhibit A specifies otherwise.

Plain English

Putting scope in Exhibit A keeps the main agreement clean and lets you update scope details without re-signing the whole contract. The change order clause is critical — any verbal "can you also do this?" request has no legal effect without a signed change order.

Watch for

Services described so broadly in the main body that they are impossible to bound. Always attach a specific Exhibit A with deliverables, timelines, and acceptance criteria.

2. Compensation

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Net 30 payment. 1.5%/month interest on overdue amounts. Pre-approved expense reimbursement. Contractor responsible for all taxes — Company does not withhold.

Plain English

The tax language is crucial. As an independent contractor, you pay self-employment tax (15.3%) on top of income tax. Factor this into your rate — contractors should generally charge 20-30% more than equivalent employees to cover taxes and benefits.

Watch for

"Net 60" or "Net 90" without a deposit. Also check that payment terms are clearly defined in Exhibit A — vague compensation structures lead to payment disputes.

3. Intellectual Property

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Assignment conditional on full payment. IP reverts to Contractor if Company does not pay within 60 days of final invoice. Pre-existing IP stays with Contractor; Company gets a license for embedded use only.

Plain English

Unlike employees (where work-for-hire is automatic), IP created by contractors belongs to the contractor by default. This clause transfers ownership to the Company — but only after full payment. The payment condition is your main leverage to collect what you're owed.

Watch for

"All inventions, ideas, and works conceived during the engagement are the exclusive property of Company, whether or not related to the Services" — this sweeps in personal projects, side work, and anything you think about while under contract.

4. Confidentiality

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Contractor keeps Company Confidential Information secret for 3 years post-termination. Standard carveouts: public information, prior knowledge, independent development, legal compulsion. Use restriction: only for performing Services.

Plain English

3 years is standard for contractor agreements. The carveouts (i through iv) are essential — without them, you could technically be in breach for discussing publicly available facts. The use restriction prevents you from using what you learn about the client to compete with them.

Watch for

Missing carveouts, especially the public information carveout. Also watch for confidentiality obligations that apply to your own work methods, pricing, and tools — these should not be covered.

5. Non-Solicitation

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12 months after termination: do not solicit Company employees or customers with whom Contractor had material contact during the engagement. Exception: general advertising and responding to unsolicited inquiries.

Plain English

Non-solicitation is narrower than a non-compete and generally more enforceable. It protects specific relationships — people you actually worked with — rather than broadly restricting your career. The 12-month duration is standard. The "material contact" limitation is critical.

Watch for

"Contractor shall not solicit any employee or customer of Company" without a "material contact" limitation. Without it, this could cover everyone at the company and every client they have, including people you never interacted with.

6. Independent Contractor Status

Worth reviewing
Contractor is an independent contractor, not an employee. No benefits, workers' comp, or unemployment insurance. Contractor controls the manner of work; deliverables must meet Exhibit A specs.

Plain English

This clause matters legally — courts look at the actual relationship, not just the label. If a company controls how and when you work, provides all your tools, and restricts you from other clients, a court may reclassify you as an employee regardless of what this clause says.

Watch for

Contracts that say "independent contractor" but require fixed hours, mandatory on-site location, exclusive availability, or use of only company equipment. These blur the contractor/employee line and create potential tax and labor law issues for both parties.

7–8. Termination

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Either party can terminate for convenience on 30 days' notice. Either party can terminate immediately for uncured material breach. Company pays for all completed work on termination + 25% kill fee on remaining value if terminating for convenience.

Plain English

The kill fee (25% of remaining value) is what makes termination for convenience fair. Without it, the Company can cancel at any time after you've invested time and resources, with no obligation beyond what was invoiced. Symmetrical termination rights mean you can also exit if the client stops communicating or paying.

Watch for

"Company may terminate for convenience at any time without further obligation to Contractor" — no kill fee, no payment for work in progress. This is a significant red flag in any contractor agreement.

9–10. Liability and Indemnification

Worth reviewing
Liability capped at fees paid in the preceding 12 months. No consequential damages (except confidentiality breaches and fraud). Mutual indemnification — each party covers third-party claims arising from their own breach, negligence, or IP infringement.

Plain English

Mutual indemnification is fair. Each party is responsible for problems they cause — not for problems caused by the other side. The liability cap prevents a relatively small contract from creating catastrophic financial exposure. Exceptions for confidentiality and fraud are reasonable and standard.

Watch for

"Contractor shall indemnify, defend, and hold harmless Company from any and all claims arising from or related to the Services" — unlimited, one-sided indemnification with no scope limit. You should never indemnify the other party for their own negligence.

Exhibit A: Scope and Compensation

EXHIBIT A — SCOPE OF SERVICES AND COMPENSATION Services: [Describe deliverables, timelines, and milestones in detail] Compensation: [Hourly rate: $__/hr, OR Fixed fee: $__, OR Milestone schedule] Payment Schedule: [E.g., 25% on signing, remainder Net 30 on delivery]

Exhibit A is where the substance lives. Be specific. List each deliverable, feature, and integration explicitly — and define what done looks like for each one.

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