What to Include in an Independent Contractor Agreement (Checklist)

What should be included in an independent contractor agreement?

A complete agreement answers five questions: what you will deliver, what you will be paid and when, who owns the result, who carries the risk if something goes wrong, and how either side can end the relationship. Everything else supports those answers. The checklist below lists the clauses in the order most contracts present them. Not every engagement needs every clause in full, but leaving one out should be a deliberate choice rather than an oversight.

• 1. Parties: full legal names, business entities if any, and mailing addresses.
• 2. Scope of work: specific deliverables, milestones, and the number of revision rounds included.
• 3. Fee and payment schedule: the amount or rate, deposit, invoice timing and a firm payment date.
• 4. Late payment: interest or a late fee, and the right to pause work while an invoice is overdue.
• 5. Expenses: which costs are reimbursed and whether they need approval first.
• 6. Intellectual property: what transfers, what you keep, and when ownership passes.
• 7. Confidentiality: what counts as confidential and how long the duty lasts.
• 8. Independent contractor status: control over methods, tools and schedule, and freedom to serve other clients.
• 9. Warranties, indemnity and a liability cap tied to the fees paid.
• 10. Termination: notice, cure periods, and payment for work completed, including a kill fee.
• 11. Dispute resolution and governing law: which state's law applies and where disputes are heard.
• 12. Entire agreement, amendments in writing, and signatures.

Which contract terms does state law require?

Three states now regulate freelance contracts directly. New York's Freelance Isn't Free Act became statewide law on August 28, 2024, as Article 44-A of the General Business Law. Illinois's Freelance Worker Protection Act (820 ILCS 193) took effect on July 1, 2024. California's Freelance Worker Protection Act, Business and Professions Code section 18100 and following, applies to contracts entered into or renewed on or after January 1, 2025. New York City, Los Angeles and some other cities have local versions too.

The required contents overlap heavily: both parties' names and mailing addresses, an itemized list of the services and their value, the rate and method of pay, the date payment is due (or how it will be set), and, where the client needs one to process payment, the date by which you must submit your invoice or list of services. If the contract sets no payment date, payment is generally due within 30 days after the work is completed, and Illinois also caps the agreed payment date at 30 days after the work is provided. Each law also bars retaliation against a freelancer who asserts these rights. Thresholds are measured over 120 days, so several small jobs for one client can add up and trigger the law.

How specific should the scope of work be?

Specific enough that a stranger could tell whether you finished. "Website redesign" is not a scope. "Design and build a five-page marketing site in WordPress, including two rounds of revisions on the homepage design and one round on inner pages, delivered by March 31" is. Vague scope is the root of most freelance disputes, because every later argument about extra work, late delivery or withheld payment comes back to what the job was supposed to be.

Put the details in a separate statement of work if the relationship will cover more than one project. The main agreement then holds the legal terms, and each project gets its own short document with deliverables, dates and price. A statement of work template keeps that structure consistent. Add a change-order process: any work outside the listed deliverables is quoted and approved in writing before you start it. Without that sentence, scope creep and unlimited revisions are almost guaranteed.

What payment terms belong in a contractor agreement?

State the fee in numbers, not as "to be agreed." For fixed-price work, tie payments to milestones, with a deposit up front. Twenty-five to fifty percent is common for project work and gives you something if the client disappears. For hourly or day-rate work, say how time is tracked, how often you invoice and whether there is a cap that needs approval to exceed.

Then set a payment deadline that runs from your invoice or from delivery, not from the client's internal approval. Clauses that say you are paid "upon final approval" or "when the client is satisfied" let payment slide indefinitely. Net 30 is a widely used default. Add a late fee or interest on overdue amounts, a right to pause work after an invoice is a set number of days late, and a statement that the client reimburses reasonable collection costs. Finally, list any expenses you will bill, such as stock photos, software licenses or travel, and whether they need prior approval.

Who should own the work, and when should ownership transfer?

Copyright starts with the creator. For an independent contractor, a client becomes the owner only in two ways. The first is "work made for hire," which under 17 U.S.C. 101 applies to commissioned work only if it falls into one of nine categories, such as a contribution to a collective work or part of an audiovisual work, and both parties sign a written agreement calling it work made for hire. The second is a written assignment: 17 U.S.C. 204(a) says a transfer of copyright ownership is not valid unless it is in writing and signed by the owner. Most websites, logos and standalone software do not fit the nine categories, so the assignment clause is what usually does the work.

Three points belong in that clause. Ownership of the final deliverables passes to the client on payment in full, not on creation. Your pre-existing tools, code, templates and design components stay yours, with the client getting a non-exclusive license to use them as part of the deliverables. And you keep the right to show the work in your portfolio, perhaps after a public launch date. Our guide to who owns the work you create covers work made for hire in more depth.

Which clauses protect independent contractor status?

The contract label does not decide whether someone is an employee or a contractor. The IRS, the Department of Labor and state agencies look at how the relationship works in practice, especially who controls how the work is done. Still, the agreement should describe a genuinely independent relationship, because a contract full of employee-style controls is evidence against the label.

Include language that you control your methods, schedule and location, supply your own equipment, may work for other clients, and are paid by project or invoice rather than a salary. Avoid exclusivity, fixed office hours and requirements to follow internal employee policies. Say that you are responsible for your own taxes and insurance, and that the client will not withhold tax. For reporting, the threshold for issuing a Form 1099-NEC rose from $600 to $2,000 for payments made in 2026 and later, but all of the income is taxable whether or not a form is issued. If you are unsure which side of the line you fall on, read our guide to 1099 vs W-2 misclassification.

How should liability, indemnity and confidentiality be handled?

These clauses decide how much you could lose if something goes wrong, and they are the ones most often left one-sided. A fair liability clause caps each side's total liability at the fees paid under the agreement, or the fees paid in the last 12 months, and excludes indirect losses such as lost profits. Without a cap, a mistake on a $3,000 project could expose you to a claim many times that size.

Indemnity should be mutual and narrow. You cover third-party claims that your work infringes someone else's rights, unless the infringement came from material the client supplied. The client covers claims arising from its content, its instructions and its use of the work. Confidentiality should protect genuinely confidential information, exclude information that is public or that you already knew, and last for a defined period such as two or three years after the project, longer only for real trade secrets. If the client asks for insurance, the agreement should name the type and amount so you can price it in.

What termination and dispute terms should you include?

Every independent contractor agreement needs a clear exit. Let either side end the agreement for convenience on written notice, often 14 or 30 days, and for cause if the other side breaches and does not fix it within a short cure period. Then say what happens on termination: the client pays for all work completed to the termination date, approved expenses, and a kill fee if the client cancels a fixed-price project midway. List which clauses survive termination, usually payment, confidentiality, ownership and liability.

For disputes, name the governing law and the place where disputes are heard. A freelancer usually prefers their home state, or at least a neutral forum, over the client's courts in another state. Small claims court is often the fastest way to collect a modest unpaid invoice, so think twice before agreeing to mandatory arbitration for every dispute. Add an attorney's fees clause if you want a realistic way to recover collection costs. Close with an entire-agreement clause and a rule that changes must be in writing, which stops either side relying on side promises made by email or phone.

Should you use your own template or the client's contract?

Either can work, as long as the final document covers the clauses above. Many freelancers send their own terms to smaller clients, which gives them control of the starting point. Larger clients usually insist on their own paper, and then the job is to compare it against this checklist and ask for changes to the clauses that matter most: payment timing, ownership on payment, the liability cap and the exit terms.

If you need a starting point, our free independent contractor agreement template includes each of these clauses in plain English. If a client sends you a draft, an automated review can flag missing or one-sided terms, such as payment tied to approval, ownership passing on creation or uncapped indemnity, before you sign. For a high-value engagement or anything unusual, a short consultation with a lawyer licensed in your state is still worth the cost.