Free Independent Contractor Agreement Template
An independent contractor agreement engages somebody who is not your employee. The document matters less for what it says than for whether the working relationship actually matches it, because that is the test a state agency applies.
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What belongs on a independent contractor agreement
- Who the parties are and what services are being bought
- The fee, how it is calculated, and when it is paid
- A clear statement of independent contractor status and no benefits
- Who controls the means and methods, which is the heart of every classification test
- Whose tools and equipment are used, and who carries the expenses
- Tax responsibility and the taxpayer identification form before first payment
- Insurance, licensing and certificates
- Who owns the work product once it is paid for
- Termination on notice, and payment for work already done
A finished independent contractor agreement, filled in
A remodeling company engaging a one person drafting and permitting business for a six month period, project by project. Page one of three, and page one is the half that decides the case: who the two parties are, where the work happens, what is being bought and how it is paid for. The twelve clauses run from the foot of page one onto page two and are printed in full further down this page.
- CLIENT is the business in the letterhead, and that is the reversal to watchOn every other agreement on this site the company at the top of the sheet is the one doing the work. On this one it is the one doing the hiring: the form puts the letterhead name in CLIENT and the other party in CONTRACTOR. Fill it in the other way round out of habit and the document says the drafting studio engaged the remodeler, which is not what anybody signed.
- WHERE SERVICES ARE PERFORMED answers the real question before any clause doesThe contractor's own office, with site visits by arrangement. A state agency deciding whether this is an employee does not start with clause 3, it starts with the facts, and where the work happens is one of the first three it looks at. A field saying "our office, 7am to 4pm" has answered it the wrong way before the clauses get a chance.
- Paid per project, and there is no payment for being availableThe schedule says it in one sentence: no retainer, no minimum number of projects and no payment for time when no project is authorized. An hourly rate paid every Friday for a set number of hours is the single strongest fact pointing at employment, and it does not matter what the document is titled. Per deliverable, invoiced on delivery, net 15 is what an independent business looks like.
- CONTRACT PRICE is one project, not the engagement$1,450.00, with the basis beside it reading fixed fee per project, and the engagement period in the header covering 1 October to 31 March. Three fields, and between them there is no way to read the number as six months of work. A price field filled in with a total nobody has committed to is how a fixed fee agreement turns into an argument about a minimum.
- The clause numbers start at 3The form numbers the services 1 and the fees 2 itself, so the first written clause, INDEPENDENT CONTRACTOR STATUS, prints as 3 and the twelve run to 12. Worth knowing before you refer to a clause number in an email, because the numbering on the sheet is not the numbering of the list you typed.
- Clause 6 wants the tax form before the first payment, not at the end of the yearTAXES AND FILINGS says the contractor provides a completed taxpayer identification form before the first payment. That ordering is the whole trick. In January a business that has been paid and has moved on has no reason to answer the phone, and the filing obligation is still yours.
- Clause 8 matters here because the deliverable is drawingsWork product created for the client becomes the client's property on payment in full, and the contractor keeps its own pre existing tools and methods. On a job where what you bought is a set of permit drawings, that sentence is the difference between owning the file you submitted and having paid for a look at it.
- Clause 12 admits the document does not settle the questionGoverning law closes by saying worker classification is decided by the facts of the relationship under that state's test, not by this document alone. A form telling you it cannot do the thing people buy it for is unusual, and it is the truest line on the sheet. The agreement is evidence. The facts are the case.
This is a template and a worked illustration, not legal advice, and on this document the paper is the small half of the problem. Worker classification is decided by the facts of the relationship under the test the state applies, and several states apply a strict one under which somebody doing your core trade is presumed an employee. A signed agreement does not settle it. If the person you are about to engage works only for you, on your schedule, with your tools, take advice before the first payment rather than after the audit.
The agreement does not decide classification, the facts do
Agencies look at the relationship, not the paperwork. If you set the hours, supply the tools, supervise the method and the person works only for you, calling them a contractor in a document does not make them one.
The agreement is still worth having. It records what both sides intended, and where the facts are genuinely consistent with independence it supports that. Where they are not, it is evidence against you.
The ABC test changes the answer in several states
A number of states apply a three part test where the worker is presumed an employee unless the hiring business proves all three parts, including that the work is outside the usual course of the hiring business.
That middle part is the one that catches contractors. A framing company hiring a framer as a 1099 has a hard argument in an ABC state, whatever the contract says.
For a trade working under you on a construction project, use the subcontract
This form is the general one. A trade performing part of a construction project under your prime contract needs lien waiver, additional insured, backcharge and schedule terms that this form does not carry.
The subcontractor agreement on this site is written for that and is the better fit.
Questions people ask
Is an independent contractor agreement the same as a 1099 agreement?
People use the phrases interchangeably. The 1099 is the information return you may have to file at year end, not the contract itself. This agreement is the contract.
Does signing this make someone a contractor rather than an employee?
No. Classification is decided by how the work is actually performed, under the IRS test and your state's test, which in some states is a strict three part test. The agreement supports a genuine contractor relationship, it does not create one.
Do I need a W-9 from an independent contractor?
You will normally need their taxpayer identification before you can file the information return, so it is standard to collect the form before the first payment. This agreement says so in the taxes clause.
Can I use this for a subcontractor on a construction job?
You can, but the subcontractor agreement on this site is the better document, because it also covers lien waivers, additional insured status, backcharges and schedule.