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Keys to Drafting an Independent Contractor Agreement

Jul 15, 2008
A clear, thorough independent contractor agreement will cover all aspects of the relationship between an independent contractor and the company securing his or her services. Exhibits may be used as important references, covering the contractor's duties, compensation, etc.

Key provisions near the top of the agreement may address duties, term and compensation, respectively. An agreement might also need to include a provision covering "expenses", which states that either the company or the contractor (most likely the company) shall be responsible for all expenses. It is proper for the agreement to provide for the fact that the contractor will initially cover expenses, as to not delay his or her efforts, and then shall bill the company, who shall promise to reimburse the contractor for appropriate expenses. This reimbursement could take place from time to time or at the conclusion of the contract, as decided by the parties.

If appropriate, a paragraph covering "inventions" should be included in the agreement. This is again a negotiable provision, however it is customary for the company to "own" all inventions, discoveries, developments, and innovations conceived by the contractor during his or her engagement. If this is the case, the language should include the fact that the contractor "assigns all rights, title, and interest in any and all inventions to the company." However, if the contractor has enough leverage, he may be able to limit the company's rights to a non-exclusive license, meaning the company is allowed to use or license out the invention, discovery, or innovation during the term of the engagement, but that after the termination of the relationship, the invention belongs to the contractor.

Every good independent contractor agreement must also contain a confidentiality clause. Here, the Contractor acknowledges that during the engagement, he or she may have access to and become acquainted with various trade secrets, inventions, innovations, processes, information, records and specifications owned or licensed by the Company in connection with the operation of its business, including the Company's business and product processes, methods, customer lists, accounts and procedures. Consequently, the contractor must agree that he or she will not disclose any of the Company's confidential information either during the term of the Agreement or at any time thereafter except as required in the course of this engagement with the Company.

This confidentiality provision may also include a clause stating that all files, records, documents, blueprints, specifications, notebooks, and similar items relating to the business of the Company prepared by the Contractor shall remain the exclusive property of the Company. Here, the contractor will most likely not feel the need to negotiate this provision, since these items relate only to the work of the company. However, if necessary, this can also be a point of negotiation between a contractor with extreme leverage and a company desperate to acquire the services of that particular contractor.
About the Author
Mark Warner is a Legal Research Analyst for RealDealDocs.com. RealDealDocs gives you insider access to millions of legal documents drafted by the top law firms in the US. Search over 10 million Documents, Clauses, and Legal Agreements for Free at http://www.RealDealDocs.com
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