For many business owners hiring independent contractors is definitely the easier and often much cheaper way to handle increased workloads.

However, many don’t feel that it’s necessary to craft any kind of agreement to secure prosperous relationships between both sides and those few that actually do often use poorly crafted templates or fail to identify the most important clauses to include.

Why craft independent contractor agreement anyway?

There is widespread misconception that independent contractors doesn’t need to be bound with any kind of contract. This not only poses serious risk to your business since you have nothing to protect yourself if things don’t go as planned, but also can get you in real trouble with the government.

There are pretty strict rules when it comes to classifying employees as independent contractors and they are pretty strict when it comes to crafting the agreement.

Clearly Define Work Scope

Getting great results from independent contractors requires setting up clear requirements and goals that need to be met at every stage of the work process. While it’s important to classify professionals as independent contractors for tax purposes, they can’t share the same work scope as your other employees.

The more detailed and clear description of the required services, as well as the work that needs to be done, you are able to provide, the better results you can expect from the independent contractor. Every successful independent professional will tell you that behind their growing business, there always is great customer service. It’s your right to require this every time you hire an independent contractor.

Specific Terms of Payment

There is no way to craft independent contractor agreement without including specific terms and deadlines for all payments involved with completing the specific work. Every time you release a payment as part of your agreement, there must be clear milestones set. This is where most business owners fail, due to unclear terms, so if you don’t want to end up with empty budget and just fraction of the work complete, so in some cases it may be of great benefits to seek help from a lawyer.

How the Expenses will be covered?

With pretty much all projects where the help of independent contractors is required there is certain amount of supplies and expenses involved. The agreement must contain clear terms on how these will be handled i.e. who will be in charge of delivering the supplies, who will cover the ongoing expenses and how disputes over the terms will be handled. Often, the supplies and expenses involved with completing the particular project fall to the independent contractor, but disputes are not rare.

Crafting the Final Version of the Agreement

With the basic terms to be included in your independent contractor agreement, the last step is actually crafting its final version. While this sounds easy, you must double-check to ensure it is bulletproof or you risk ending up in big trouble. The best people to help with that task will always be qualified lawyer and your accountants, but if you end up using a template, make sure it’s developed according to the exact standards.

Great sources of independent contractor agreement templates are available from Microsoft, LawDepot and Simply Docs