posted
Ok, a friend asked me to read over this and I have no clue. But know where to ask with some people who will! So... have at it. And thanks. I think I took out all the personal info and left everything else.
INDEPENDENT CONTRACTOR AGREEMENT This Independent Contractor Agreement ("Agreement") is made and effective this March 15, 2005, by and between ***** ***** ("Consultant") and ***** *** ("Company"). Now, therefore, Consultant and Company agree as follows: 1. Engagement. Company hereby engages Consultant, and Consultant accepts engagement, to provide to Company the following services: Graphic Design Services for apparel, marketing, business applications where design is required, sales material any and all other professional design needs. 2. Term. Consultant shall provide services to Company pursuant to this Agreement for a term commencing on [March 15, 2005] and ending on [September 2006]. 3. Place of Work. Consultant shall render services primarily at Consultant's office, but will, upon request, provide the services at Company offices or such other places as reasonably requested by Company as appropriate for the performance of particular services. 4. Time. Consultant's daily schedule and hours worked under this Agreement on a given day shall generally be subject to Consultant's discretion, provided that Consultant and Company anticipate that Consultant shall work on average 40 hours per week in the performance of services pursuant to this Agreement. Company relies upon Consultant to devote sufficient time as is reasonably necessary to fulfill the spirit and purpose of this Agreement. 5. Payment. Company shall pay Consultant [Pay Rate – $4000 ] for monthly services performed pursuant to this Agreement. Payment shall be made [every other Friday or upon receipt of invoice and you must submit invoice]. Consultant shall share Consultant's expenses incurred in the performance of this Agreement with Company as agreed. Travel Expenses: Lodging, Gas, Food and all to be paid by Company when traveling for Company. Rate of .30 per mile Car Allowance towards maintenance to Consultants Vehicle.
6. Confidentiality. During the term of this Agreement, and thereafter March 15, 2005 Consultant shall not, without the prior written consent of Company, disclose to anyone any Confidential Information. "Confidential Information" for the purposes of this Agreement shall include Company's proprietary and confidential information such as, but not limited to, customer lists, business plans, marketing plans, financial information, designs, drawing, specifications, models, software, source codes and object codes. Confidential Information shall not include any information that: A. is disclosed by Company without restriction; B. becomes publicly available through no act of Consultant; C. is rightfully received by Consultant from a third party. 7. Termination. A. This Agreement may be terminated by Company as follows: i. If Consultant is unable to provide the consulting services by reason of temporary or permanent illness, disability, incapacity or death. ii. Breach or default of any obligation of Consultant pursuant to Section 7, Confidentiality, of this Agreement. iii. Breach or default by Consultant of any other material obligation in this Agreement, which breach or default is not cured within five (5) days of written notice from Company. B. Consultant may terminate this Agreement as follows: i. Breach or default of any material obligation of Company, which breach or default is not cured within five (5) days of written notice from Consultant. ii. If Company files protection under the federal bankruptcy laws, or any bankruptcy petition or petition for receiver is commenced by a third party against Company, any of the foregoing of which remains undismissed for a period of sixty (60) days. 8. Independent Contractor. Consultant is and throughout this Agreement shall be an independent contractor and not an employee, partner or agent of Company. Consultant shall not be entitled to nor receive any benefit normally provided to Company's employees such as, but not limited to, vacation payment, retirement, health care or sick pay. Company shall not be responsible for withholding income or other taxes from the payments made to Consultant. Consultant shall be solely responsible for filing all returns and paying any income, social security or other tax levied upon or determined with respect to the payments made to Consultant pursuant to this Agreement. Contractor is not limited to exclusive employment by Company. 9. Tools and Supplies. Unless otherwise agreed to by Company in advance, Consultant shall be solely responsible for procuring, paying for and maintaining any computer equipment, software, paper, tools or supplies necessary or appropriate for the performance of Consultant's services hereunder. Would this include the car? 10. Controlling Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. 11. Headings. The headings in this Agreement are inserted for convenience only and shall not be used to define, limit or describe the scope of this Agreement or any of the obligations herein. 12. Final Agreement. This Agreement constitutes the final understanding and agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, understandings and agreements between the parties, whether written or oral. This Agreement may be amended, supplemented or changed only by an agreement in writing signed by both of the parties. 13. Notices. Any notice required to be given or otherwise given pursuant to this Agreement shall be in writing and shall be hand delivered, mailed by certified mail, return receipt requested or sent by recognized overnight courier service as follows: If to Consultant: ADDRESS If to Company: ADDRESS 14. Severability. If any term of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then this Agreement, including all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never been included. IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first above written.
posted
He should get a lawyer to read it over, simple as that.
And he needs to make sure he's getting paid right, too. If he's working as the normal sort of independent contractor, who doesn't get benefits, a pay rate of one and a half times or more what he'd be paid as an employee is appropriate. That compensates him for what he now needs to pay out of pocket, with a small bit for increased risk due to being a contractor rather than an employee.
Posts: 15770 | Registered: Dec 2001
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posted
I have one question myself....one part of it ways something about sharing expenses with the contractor " as agreed upon", and that would worry me a bit. I would wnat it to spell it out more specifically, so that I wouldn't get caught holding the bag.
Keep in mind that I am not a lawyer, nor am I in law school. I also have not been an IC myself, so I have no idea if that is a usual sort of wording, or if I have a good point or not.
posted
Note all that stuff in there about being an independent contractor. That means that instead of the employer paying the social security part, the independent contractor does. Independent contractors usually have to do estimated taxes four times a year, instead of once a year like employees. A lot of benefits are excluded, as you see listed in the reading. If this person is not used to being an independent contractor, that is something to consider and also ask the lawyer about. Yeah, definitely need a lawyer to look at that. Always saves time, money, and heartache to do it now instead of learning the problems and the loopholes later on.
Posts: 1990 | Registered: Feb 2001
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posted
Reviewing a contract is a little too specific for me to do - it would definitely be practicing law. So, without reading it, here's my suggestion as a former IC:
1.) Make sure they review it with a lawyer. 2.) Make sure the payment terms include price and period. 3.) Make sure the scope of the work is clear - perform x task, or work y hours, or work z hours per payment period. 4.) Your friend should realize they owe and additional ~7% tax for being self employed. 5.) Specify who will own the intellectual property, and what rights the other party will have. 6.) Have it reviewed by a lawyer in the state where the law will be controlling.
Dagonee P.S., don't forget to have a lawyer review it.
posted
Yeah, I was wondering how specific you could get Dag. Thanks for the responses everyone. Some great points and observations. One day Hatrack will solve the world’s problems.
Posts: 2845 | Registered: Oct 2003
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posted
Oh, and if this is even a slightly lucrative contracting deal, he should talk to an accountant too, to make sure his taxes are dealt with properly (at least get an accountant friend to give him a written run-down of what he'll need to do, which will likely include paying estimated taxes to avoid a penalty, among other things).
Posts: 15770 | Registered: Dec 2001
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posted
Very good point. It sucks to miscalculate taxes and end up owing money. We lost $5,000 dollars for filing one form late at a time when our annual revenue was only about $240,000. The fine could have been tripled if we hadn't caught it exactly when we did.
Posts: 26071 | Registered: Oct 2003
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posted
IANAL but I do work for one. And to the best of my very-late-night mental processes, this looks to be very much like the IC contracts I help my boss with.
Definitely have a lawyer go over it and make sure that everything's okay in their eyes. Definitely get the "as agreed to" expenses delineated, at least a starting point with a "including but not limited to". That way those expenses that are itemized and signed to by the parties are absolute and unquestionable. Definitely make sure he understands that he's on the hook for all of his taxes, including the employer portion of Social Security, FICA, etc. if he doesn't already have an accountant, make sure he gets one, and possibly have the accountant in on these conversations regarding fiscal agreements.
That's all I can think of at the immediate moment (and yes I'm sure I'm repeating other comments in the thread). If I think of more, I'll post later.
Posts: 4515 | Registered: Jul 2004
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