Free Independent Contractor Agreement Template
An independent contractor agreement covering services, fees, invoicing, IP ownership on payment, confidentiality, liability cap and contractor status.
An independent contractor agreement sets the terms for a self-employed person providing services: scope, fees, payment, ownership of work, confidentiality and termination. Whether someone is legally a contractor depends on how the relationship works in practice, not just the contract's label.
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INDEPENDENT CONTRACTOR AGREEMENT
This Agreement is made on [DATE] between [CLIENT LEGAL NAME], [ADDRESS] ("Client"), and [CONTRACTOR NAME / BUSINESS], [ADDRESS] ("Contractor").
1. SERVICES. Contractor will provide the services described in Schedule A ("Services") and deliver the deliverables listed there ("Deliverables") by the dates stated.
2. INDEPENDENT CONTRACTOR STATUS. Contractor is an independent contractor, not an employee. Contractor: controls the manner, means, hours and location of work, subject to agreed deadlines and specifications; provides its own tools and equipment; may hire assistants at its own cost; may provide services to other clients; and is responsible for its own taxes, insurance and licences. Client will issue IRS Form 1099 where required. Contractor is not eligible for Client's employee benefits.
3. FEES. Client will pay [$[AMOUNT] per hour / a fixed fee of $[AMOUNT] / the milestone fees in Schedule A]. [A deposit of [PERCENT]% is due before work begins.] Pre-approved expenses will be reimbursed at cost with receipts.
4. INVOICING AND PAYMENT. Contractor will invoice [monthly / on each milestone]. Client will pay within [30] days of a correct invoice. Late amounts accrue interest at [1]% per month or the maximum allowed by law, if lower, and Contractor may pause work while any invoice is more than [15] days overdue.
5. ACCEPTANCE. Client will review each Deliverable within [10] business days and either accept it or identify in writing how it fails the specifications. A Deliverable is accepted if Client does not reject it in that period or uses it in production.
6. CHANGES. Changes to the Services require a written change order stating the effect on fees and deadlines.
7. INTELLECTUAL PROPERTY. On receipt of full payment for a Deliverable, Contractor assigns to Client all rights in that Deliverable. Contractor retains ownership of materials, tools and know-how it owned before this Agreement or developed independently ("Background IP") and grants Client a non-exclusive, perpetual, royalty-free licence to use Background IP incorporated in the Deliverables as part of them. Contractor may display non-confidential work in its portfolio after public release.
8. CONFIDENTIALITY. Contractor will keep Client's non-public information confidential, use it only for the Services, and return or delete it at the end of the engagement. Standard exclusions apply for public, prior, third-party and independently developed information.
9. WARRANTIES. Contractor warrants that it will perform the Services in a professional manner consistent with industry standards and that, to its knowledge, the Deliverables will not infringe third-party rights, excluding materials supplied by Client.
10. INDEMNITY. Each party will indemnify the other against third-party claims caused by its own breach of this Agreement or negligence. Contractor's indemnity for infringement does not apply to Client-supplied materials or Client modifications.
11. LIMITATION OF LIABILITY. Except for indemnified third-party claims, breach of confidentiality, and gross negligence or willful misconduct, neither party is liable for indirect or consequential damages, and each party's total liability is limited to the fees paid or payable under this Agreement.
12. INSURANCE [OPTIONAL]. Contractor will maintain [professional liability / general liability] insurance of at least $[AMOUNT].
13. TERM AND TERMINATION. This Agreement starts on [DATE] and continues until the Services are complete, unless ended earlier. Either party may terminate on [14] days' written notice, or immediately for material breach not cured within [10] days. On termination, Client will pay for Services performed to the termination date [plus a kill fee of [PERCENT]% of the remaining fixed fee if Client terminates for convenience].
14. NON-SOLICITATION [OPTIONAL]. For [6] months after this Agreement ends, neither party will solicit the other's employees with whom it worked, excluding general job postings.
15. GOVERNING LAW. This Agreement is governed by the laws of [STATE].
GENERAL PROVISIONS
(a) Notices. Notices must be in writing and sent to the addresses or emails above (or as later updated by notice). Email notice is effective when sent, unless the sender receives a delivery failure message.
(b) Entire agreement. This agreement, with any schedules and exhibits, is the entire agreement between the parties on its subject and replaces all prior discussions and agreements on that subject.
(c) Amendments and waivers. Changes must be in writing and signed by both parties. A failure or delay in enforcing any term is not a waiver of it.
(d) Severability. If any provision is found unenforceable, it will be limited to the minimum extent necessary and the rest of this agreement will remain in effect.
(e) Assignment. Neither party may assign this agreement without the other party's written consent, except to a successor in a merger or sale of substantially all of its business, on notice.
(f) Relationship. Nothing in this agreement creates a partnership, joint venture or agency relationship unless expressly stated.
(g) Counterparts and electronic signatures. This agreement may be signed in counterparts and by electronic signature, each of which is an original and together form one agreement.
(h) Independent advice. Each party has had the opportunity to review this agreement with its own legal counsel and signs it voluntarily.
CLIENT: _______________________ Name/Title: ______________ Date: __________
CONTRACTOR: ___________________ Date: __________
SCHEDULE A: Services, Deliverables, milestones and fees
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This free template is provided by ClauseAudit for general informational purposes and is not legal advice. Have it reviewed before use. Replace all [BRACKETED] placeholders.When to use this template
- Hiring a freelancer, consultant or contractor for defined work.
- A contractor wants fair terms on payment, ownership and liability.
- Replacing an employee-style agreement for a genuine contractor.
How to fill it in
- Describe services and deliverables in Schedule A with deadlines.
- Choose hourly, fixed or milestone fees and any deposit.
- Keep payment, acceptance and change order rules.
- Tie IP transfer to payment and carve out background IP.
- Confirm the working relationship matches contractor status in practice.
Key clauses to check
- Contractor status
- Misclassification risk depends on control, exclusivity and integration, not the label.
- IP on payment
- Protects the contractor's leverage and the client's ownership once paid.
- Background IP
- Lets the contractor keep reusable tools.
- Liability cap
- Keeps contractor risk proportionate to the fee.
- Termination payment
- Pays for work done if the client ends early.
Frequently asked questions
What makes someone an independent contractor?
Control over how, when and where they work, their own tools, freedom to work for others and running their own business. Tests vary by law and state.
Who owns work created by an independent contractor?
The contractor owns it unless a written agreement assigns it; most agreements transfer it to the client, ideally on payment.
Can a contractor be sued for unlimited damages?
Without a liability cap, potentially yes, which is why a cap tied to the fee is standard.
Does a written contract make someone an independent contractor?
No. Calling someone a contractor in a contract does not decide their status. Government agencies and courts look at the real working relationship, such as who controls how the work is done, who supplies tools, whether the worker serves other clients and how they are paid. Federal and state tests differ, and some states use a stricter test that makes contractor status harder to establish.
Does an independent contractor need a 1099?
Generally, a business that pays an unincorporated independent contractor at or above the IRS reporting threshold during the year must issue a Form 1099, usually the 1099-NEC, and collect a Form W-9 before paying. Payments to most corporations are typically exempt. The threshold and rules can change, so check current IRS instructions each year. Your state may have its own reporting requirements too.
Want to check if a contract is fair before you sign?
If someone sent you a freelance contract, don't guess. We flag risky clauses in plain English, tuned to your state, with a downloadable report and suggested-fix redline.
Read before you sign
- What to Include in an Independent Contractor Agreement (Checklist)What to include in an independent contractor agreement: scope, payment, ownership, contractor status, liability and exit terms, plus what state law requires.
- Is My Freelance Contract Fair? A Pre-Signing Checklist for Independent WorkersClient contracts are written to protect the client. Here is the checklist our team runs on a freelance agreement before you sign, payment, ownership, scope, and the traps in between.
- My Client Wants All Rights to My Work Before Paying. Should I Agree?Transferring ownership of your work before you are paid removes your leverage. Here is how to make rights transfer on payment instead, and what to offer clients who push back.
- 1099 vs W-2: When Does Your Freelance Contract Actually Make You an Employee?A contract that calls you an "independent contractor" does not automatically make you one. Here is the real test the IRS and states apply, and what is at stake when a freelance arrangement is actually employment.
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This free template is general information, not legal advice, and is no substitute for a qualified attorney. Laws vary by state; have it reviewed by a lawyer before you use or sign it.