Independent Contractor Agreement
A contract defining the relationship between a business and an independent contractor, covering scope of work, payment, and IP ownership.
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An independent contractor agreement is a written contract between a business or individual (the client) and a self-employed person or company (the contractor) who will perform specific services. It defines the scope of work, payment terms, timelines, intellectual property ownership, confidentiality obligations, and the basis on which either party may end the relationship.
Employee vs. contractor distinction
One of the most important functions of an independent contractor agreement is documenting the nature of the working relationship. The Canada Revenue Agency applies a multi-factor test to determine whether a worker is an employee or an independent contractor — a distinction that has significant tax and benefits implications for both parties. The agreement alone does not determine the classification; the actual working relationship must reflect contractor status.
Key clauses
A thorough independent contractor agreement should address: a precise description of services; payment terms and invoicing; ownership of work product and intellectual property; confidentiality and non-disclosure; non-solicitation of clients and staff; liability and indemnification; dispute resolution; and termination provisions.