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Independent Contractor Consultant Agreement

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Independent Contractor Consultant Agreement

Several companies have realized that hiring, training, and maintaining an in-house staff can be financially burdensome. As a result, they are looking for alternatives that can deliver similar results without hampering the organisational growth. Employing independent contractor consultants has emerged as an effective cost-cutting measure that also engages experienced and skillful talent without breaking the bank.

From the above trends, it becomes clear that there is a great demand for independent contractor consultants. However, before you dive right in and start working on the project, it is important to sign an independent contractor consultant agreement to protect your interests. It clearly outlines the deliverables and the corresponding payments so as to avoid scope-creep and ensure that you are rightfully paid for the work carried out.

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Benefits of an independent contractor consultant agreement

An independent contractor consultant agreement bears the following advantages:

  1. When you sign the independent contractor consultant agreement, you get to have a say on the amount of monetary compensation that you expect in lieu of your services. Hence, you can negotiate and reach on a mutually agreeable figure that works for you and the company, thereby ensuring fair pricing.
  2. Since you are not a full-time employee for the company, you gain certain tax exemptions. However, having an independent contractor consultant agreement in place can act as a document allowing for tax compliance.
  3. Depending on your availability and project timelines, an independent contractor consultant agreement may offer you the freedom to engage with other companies and clients in parallel.
  4. One of the greatest disadvantages of working as an independent contractor consultant is that you are not entitled to certain employee benefits that companies may offer to their regular employees. However, you include an employee benefit clause in the independent contractor consultant agreement for the period of engagement with the client.

Essential components of an independent contractor consultant agreement

Now that you understand how the independent contractor consultant agreement will best protect your interests, let’s have a look at the various elements that it encompasses.

To have a legally binding independent contractor consultant agreement, it must have:

1. Names of the parties

This portion of the agreement will bear the names of the parties involved, that is you and the company that is outsourcing its business processes to you. Additionally, it may also include the names of the sub-contractors, if any.

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2. Scope of work and payments

The scope of the work will clearly define the services that you will render to the company. This is the most important part of the agreement as it spells out all the tasks that come within the ambit of the services that you offer for the decided rate. Make sure that you have an 'additional services' section that outlines your entitled remuneration for the assignments.

Furthermore, the frequency with which the contractor consultant may have to report to the company is also defined in this section, along with the travel expenses corresponding to these reporting incidents.

3. Term of contract

This section establishes a timeline for project completion and states a prospective date when the agreement will terminate and the date when it has been initiated. It may also state any termination clauses, if applicable, and the contingencies against which the agreement may be terminated.

4. Proprietary rights

Proprietary rights dictate who owns the intellectual property. At the same time, it may impose clauses relating to the maintenance of confidentiality and the duty to protect confidential information. The independent contractor consultant agreement may also state that as a contractor consultant, you may have to seek prior approval and consent before engaging with other clients.

Once you have an independent contractor consultant agreement that covers all these aspects, you can have a legally-binding document that preserves your interests. Since you're going to use this template regularly, ensure that you begin with the all encompassing template that Bonsai offers.

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