Business Contracts6 min readFebruary 22, 2026
Independent Contractor Agreement Guide: Protect Your Business
Hiring contractors? A proper agreement protects both parties. Here's what to include.
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Independent Contractor Agreement Guide
An independent contractor agreement defines the working relationship between a business and a contractor.
Why It Matters
- Legal clarity - Defines contractor vs. employee status
- Scope definition - Clear deliverables
- Payment terms - Avoid disputes
- IP protection - Who owns the work
Essential Sections
Scope of Work - Specific tasks and deliverables - Timeline and milestones - Quality standards
Payment Terms - Rate (hourly or project-based) - Payment schedule - Expense reimbursement - Invoicing requirements
Intellectual Property - Work-for-hire provisions - Ownership of deliverables - License grants
Confidentiality - Protection of business information - Non-disclosure obligations - Return of materials
Contractor vs. Employee
The IRS looks at: - Behavioral control - How work is done - Financial control - Business expenses, investment - Relationship type - Written contracts, benefits
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