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Independent Contractor Agreement

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INDEPENDENT CONTRACTOR AGREEMENT

THIS INDEPENDENT CONTRACTOR AGREEMENT (the "Agreement") is dated this ________ day of ________________, ________.

Client

____________________________________________________
(the "Client")

Contractor

____________________________________________________
(the "Contractor")
  1. BACKGROUND
  2. The Client is of the opinion that the Contractor has the necessary qualifications, experience and abilities to provide services to the Client.
  3. The Contractor is agreeable to providing such services to the Client on the terms and conditions set out in this Agreement.

IN CONSIDERATION OF the matters described above and of the mutual benefits and obligations set forth in this Agreement, the receipt and sufficiency of which consideration is hereby acknowledged, the Client and the Contractor (individually the "Party" and collectively the "Parties" to this Agreement) agree as follows:

  1. Services Provided
  2. The Client hereby agrees to engage the Contractor to provide the Client with the following services (the "Services"):
    • _______________________________________________________________
      _______________________________________________________________.

  3. The Services will also include any other tasks which the Parties may agree on. The Contractor hereby agrees to provide such Services to the Client.
  4. Term of Agreement
  5. The term of this Agreement (the "Term") will begin on the date of this Agreement and will remain in full force and effect indefinitely until terminated as provided in this Agreement.
  6. Performance
  7. The Parties agree to do everything necessary to ensure that the terms of this Agreement take effect.
  8. Currency
  9. Except as otherwise provided in this Agreement, all monetary amounts referred to in this Agreement are in NZD (New Zealand Dollars).
  10. Payment
  11. The Contractor will charge the Client a flat fee of $__________ for the Services (the "Payment").
  12. The Client will be invoiced when the Services are complete.
  13. Invoices submitted by the Contractor to the Client are due within 30 days of receipt.
  14. In the event that this Agreement is terminated by the Client prior to completion of the Services but where the Services have been partially performed, the Contractor will be entitled to pro rata payment of the Payment to the date of termination provided that there has been no breach of contract on the part of the Contractor.
  15. The Payment as stated in this Agreement does not include GST, or other applicable duties as may be required by law. Any GST and duties required by law will be charged to the Client in addition to the Payment.
  16. Reimbursement of Expenses
  17. The Contractor will be reimbursed from time to time for reasonable and necessary expenses incurred by the Contractor in connection with providing the Services.
  18. All expenses must be pre-approved by the Client.
  19. Confidentiality
  20. Confidential information (the "Confidential Information") refers to any data or information relating to the Client, whether business or personal, which would reasonably be considered to be private or proprietary to the Client and that is not generally known and where the release of that Confidential Information could reasonably be expected to cause harm to the Client.
  21. The Contractor agrees that they will not disclose, divulge, reveal, report or use, for any purpose, any Confidential Information which the Contractor has obtained, except as authorised by the Client or as required by law. The obligations of confidentiality will apply during the Term and will survive indefinitely upon termination of this Agreement.
  22. Ownership of Intellectual Property
  23. All intellectual property and related material, including any trade secrets, moral rights, goodwill, relevant registrations or applications for registration, and rights in any patent, copyright, trade mark, trade dress, industrial design and trade name (the "Intellectual Property") that is developed or produced under this Agreement, will be the sole property of the Client. The use of the Intellectual Property by the Client will not be restricted in any manner.
  24. The Contractor may not use the Intellectual Property for any purpose other than that contracted for in this Agreement except with the written consent of the Client. The Contractor will be responsible for any and all damages resulting from the unauthorised use of the Intellectual Property.
  25. Return of Property
  26. Upon the expiry or termination of this Agreement, the Contractor will return to the Client any property, documentation, records, or Confidential Information which is the property of the Client.
  27. Capacity/Independent Contractor
  28. In providing the Services under this Agreement it is expressly agreed that the Contractor is acting as an independent contractor and not as an employee. The Contractor and the Client acknowledge that this Agreement does not create a partnership or joint venture between them, and is exclusively a contract for service.
  29. Right of Substitution
  30. Except as otherwise provided in this Agreement, the Contractor may, at the Contractor's absolute discretion, engage a third party sub-contractor to perform some or all of the obligations of the Contractor under this Agreement and the Client will not hire or engage any third parties to assist with the provision of the Services.
  31. In the event that the Contractor hires a sub-contractor:
    • the Contractor will pay the sub-contractor for its services and the Compensation will remain payable by the Client to the Contractor.
    • for the purposes of the indemnification clause of this Agreement, the sub-contractor is an agent of the Contractor.
  32. Autonomy
  33. Except as otherwise provided in this Agreement, the Contractor will have full control over working time, methods, and decision making in relation to provision of the Services in accordance with the Agreement. The Contractor will work autonomously and not at the direction of the Client. However, the Contractor will be responsive to the reasonable needs and concerns of the Client.
  34. Equipment
  35. Except as otherwise provided in this Agreement, the Contractor will provide at the Contractor’s own expense, any and all tools, machinery, equipment, raw materials, supplies, workwear and any other items or parts necessary to deliver the Services in accordance with the Agreement.
  36. No Exclusivity
  37. The Parties acknowledge that this Agreement is non-exclusive and that either Party will be free, during and after the Term, to engage or contract with third parties for the provision of services similar to the Services.
  38. Notice
  39. All notices, requests, demands or other communications required or permitted by the terms of this Agreement will be given in writing and delivered to the Parties at the following addresses:
    1. ______________________
      ______________________________
    2. ______________________
      ______________________________

    or to such other address as either Party may from time to time notify the other.

  40. Indemnification
  41. Except to the extent paid in settlement from any applicable insurance policies, and to the extent permitted by applicable law, each Party agrees to indemnify and hold harmless the other Party, and its respective affiliates, officers, agents, employees, and permitted successors and assigns against any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees and costs of any kind or amount whatsoever, which result from or arise out of any act or omission of the indemnifying party, its respective affiliates, officers, agents, employees, and permitted successors and assigns that occurs in connection with this Agreement. This indemnification will survive the termination of this Agreement.
  42. Modification of Agreement
  43. Any amendment or modification of this Agreement or additional obligation assumed by either Party in connection with this Agreement will only be binding if evidenced in writing signed by each Party or an authorised representative of each Party.
  44. Time of the Essence
  45. Time is of the essence in this Agreement. No extension or variation of this Agreement will operate as a waiver of this provision.
  46. Assignment
  47. The Contractor will not voluntarily, or by operation of law, assign or otherwise transfer its obligations under this Agreement without the prior written consent of the Client.
  48. Entire Agreement
  49. It is agreed that there is no representation, warranty, collateral agreement or condition affecting this Agreement except as expressly provided in this Agreement.
  50. Enurement
  51. This Agreement will enure to the benefit of and be binding on the Parties and their respective heirs, executors, administrators and permitted successors and assigns.
  52. Titles/Headings
  53. Headings are inserted for the convenience of the Parties only and are not to be considered when interpreting this Agreement.
  54. Gender
  55. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  56. Governing Law
  57. This Agreement will be governed by and construed in accordance with the laws of New Zealand.
  58. Severability
  59. In the event that any of the provisions of this Agreement are held to be invalid or unenforceable in whole or in part, all other provisions will nevertheless continue to be valid and enforceable with the invalid or unenforceable parts severed from the remainder of this Agreement.
  60. Waiver
  61. The waiver by either Party of a breach, default, delay or omission of any of the provisions of this Agreement by the other Party will not be construed as a waiver of any subsequent breach of the same or other provisions.

IN WITNESS WHEREOF the Parties have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

_______________________________
______________________ (Client)
_______________________________
______________________ (Contractor)
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Independent Contractor Agreement

What is an independent contractor?

An independent contractor is someone who works independently by providing services to clients and customers without being considered an employee. The contractor provides their services to the client under an Independent Contractor Agreement. They may be part of a group of contractors working under one contract, or they may be a self-employed contractor.

You can use an Independent Contractor Agreement to hire any kind of contractor, including:

  • Contract builders
  • Painters
  • Freelance creatives

Do independent contractors need a contract?

While a contractor can work for a client without a written contract, formalising the agreement in writing benefits both parties. An independent contract form allows for both parties to establish and agree upon the details of the arrangement.

For example, you can hire a contractor without completing any paperwork. However, if you only have a conversation about their rates, you won’t have a record of your agreement if they charge you differently than you were expecting. By creating an independent contractor agreement, you can get important details in writing on a signed document.

Creating an Independent Contractor Agreement protects both parties. By outlining the details of the arrangement, such as pay and deadlines, both parties can enter into the working arrangement with confidence.

Can a contractor be an employee?

When someone works for a company, they can either be a contractor or an employee, but not both. Because a contractor and an employee are legally different, it’s important to understand them as two separate roles.

What is the difference between an independent contractor and an employee?

While the kinds of work independent contractors and employees can do is very similar, it’s important to distinguish one from the other because of the legal differences between the two.

An independent contractor usually:

  • Has more than one customer or client
  • Is self-employed
  • Determines their own rates and sends invoices to customers for payment
  • Uses their own tools or equipment
  • Works without supervision
  • Signs an Independent Contractor Agreement
  • Works on a fixed-term basis
  • Doesn’t receive employment benefits or paid annual leave
  • Files an individual income tax return and pays ACC levies
  • Can claim back expenses against tax liability
  • Needs to register for GST if income is above $60,000
  • Isn’t covered by employment-related laws, meaning they aren’t entitled to sick leave

Independent contractors can hire employees or subcontractors to help complete the services they offer.

Conversely, an employee usually:

  • Reports to a supervisor or manager who controls how, where, and when they complete their work
  • Has a wage or salary established by the employer
  • Has the potential to receive employment benefits, like medical, holiday pay, sick pay, or a pension
  • Signs an Employment Contract
  • Undergoes employment reviews
  • Receives in-house training
  • Has PAYE deducted from their salary by their employer

In New Zealand, employees have established rights under employment laws that employers must uphold. These rights include:

  • Minimum wage
  • Holidays and leave entitlements

With both independent contractors and employees, companies must adhere to health and safety laws.

How do you fill out an Independent Contractor Agreement?

Before signing an Independent Contractor Agreement, both the client and the contractor should discuss the following:

  • The services that the contractor provides and the compensation they require
  • If the client or customer will cover expenses or provide resources
  • The duration of the contract
  • If one party can penalize the other for things such as late payments or unfinished work
  • Who retains ownership rights over any intellectual property

You can create a contract for a single job, a fixed duration of time, or indefinitely if the job is ongoing.

Provide details regarding the independent contractor’s services. Be clear and specific when describing tasks, and indicate any important dates. Make sure to provide both the contractor’s and the client’s name and address.

The contractor also has the option of charging the client a retainer fee to secure services The retainer amount depends on the trustworthiness and financial stability of the client, but a reasonable amount is usually 10-50% of the total contract.

Other terms to consider include:

  • If one party can end the contract early and, if so, how many days’ notice they must give
  • A confidentiality clause, prohibiting the contractor from revealing the client’s sensitive information
  • Any additional clauses necessary

LawDepot’s Independent Contractor Agreement template is customised for New Zealand. Use our questionnaire to personalise your document to suit your needs.

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