Whether you are working as an independent contractor, or you are hiring one, it is of the utmost importance that you have a contract in place. There are so many details involved with hiring an independent contract that without clearly having the terms of your agreement written out can cost you not only headaches down the line, but lots of money. Here are 6 reasons why you must have an independent contractor agreement in place before hiring one.

Here are five things you should include in your terms of service:

1. Responsibilities. This is where you want to lay out what is expected from the independent contractor as well as from you the hiring party. You want to detail out the services the independent contractor will be providing, how communication will work between the parties, as well as any other details that could get confused or misinterpreted.
   
   
   
2. Payment. Spell out the exact terms when relating to payment. This is not only how much the independent contractor will be paid, but this also includes how and when they will be paid.
   
   
   
3. Taxes and Benefits. Your independent contractor agreement will make it clear that the independent contractor is not an employee of your business and therefore is responsible to handle payment of their own taxes. Also, independent contractor will not be eligible to receive any benefits granted to your actual employees.
   
   
   
4. Intellectual Property. Your independent contractor agreement will detail out who owns any intellectual property created during the term of the independent contractor agreement. If you want to make sure that this information isn’t shared to any third parties, you would want to consider having the independent contractor sign a non-disclosure agreement as well as a confidentiality agreement.
   
   
   
5. Dispute Resolution. What will happen if something goes wrong during the term of the independent contractor agreement? You want to include clauses including meditation or arbitration to avoid having to take the case to court and incur huge legal fees.
   
   
   
6. Termination. Make sure to detail out when the independent contractor agreement will end. Does it end when the work ends? Is it for a period of time instead of based on the work completion? Who can terminate the agreement early?
   

Although the thought of having an agreement like this can seem overwhelming, having it in place will actually save you stress in the long run. If you are looking for a place to find a trusted independent contractor agreement, I’ve created a rock solid template for you to use that you can fill out and have ready to be signed in less than 10 minutes. Just head over to the SHOP here to find the independent contractor agreement as well as other legal templates to help you protect your business.