A work agreement, also known as an Independent Contract Agreement, is a document that testifies the legal relationship between a contractor or freelancer and a business owner. It is important to have both the parties sign this agreement form as it defines some crucial aspects of the project on both ends. As a business owner, it is easy to design the template by yourself. Continue reading ahead to learn the five key elements that go into a work agreement contract.
Identification and Duration of the Contract
Both the parties must identify themselves through their names, titles, and contact information. This sets atop your agreement, followed by a specifically outlined duration for the project. This component is important especially for contract or freelancing positions. This is crucial to ensure that parties are always fairly compensated for their services. Business owners who are not looking for long-term employees must outline the time frame for which they require individual contractors. In hiring temporary, or leased employees, ensure you clearly highlight project deadlines. As an owner, list necessary time frames and obligations associated with completing projects. Begin an effective work agreement contract by stating the identification and duration of specific contracts.
Duties and Responsibilities
This is probably the most important segment of the contract. It outlines in detail the duties associated with the work. The contractor is also made aware of the specific responsibilities that the work entails. As the business owner, this is your prime chance for outlining the skills you need and the performance levels you wish to measure at the end of the contract. The length of this section normally depends on specialization of the task. If you need the contractor to work on a big project, you may need several paragraphs to state the duties. Devote a separate sheet at the end to detailing work duties and responsibilities. The second key part to an effective work agreement contract highlights needed duties and responsibilities.
Charges And Mode of Payment
Once you have negotiated a price with the contractor or freelancer, have it laid out on the Work Agreement Contract. Here, you must also include how you wish to make the payment. Guarantee that your business constantly tracks contractor hours to ensure that parties are fairly compensated. With contract positions, a time tested payment method is paying a stipulated amount for the project, instead of paying hourly. This is as hourly payments frequently lead to slower work, and therefore higher rates. You can either agree to pay the who amount towards the end or after specific goals have been achieved. Use this segment to additionally define the penalties for late completion of the project. The third key part of a work agreement contract must entail required charges and modes of payment.
Keep Your Trade Secrets Confidential
A Confidential Agreement is an important section of the Work Agreement Contract. A Non-Disclosure pact helps you keep your trade methods and tactics a secret. The contractor would come in close contact with your company’s culture and processes. Once the project is over, you do not want them to leak out what lends individuality to your company. Hence, include a confidentiality segment somewhere towards the end of your work agreement. Additionally, confidentiality also works in favor of the freelancer you employ. After all, they are also lending you a piece of their intellect and would not want it to be used unsolicited by your company either. Ensure your work agreement contract contains a section stressing confidentiality.
Terminating Project Prematurely
Unanticipated events happen. Although, they should not hamper your progress in any way. Outline terms for canceling the project prematurely. Perhaps your contractor backs out. In such a case, tell them in the Agreement what the consequences may be. You might have to end the contract because of your own reasons. State the termination notice period in this section. Not having these terms laid down in the Work Agreement could spell legal trouble for both of you. Not to mention, bad company reputation if you suddenly notify the contractor about the termination. This part simply contains the penalties for failure to complete, or employee incentives for early completion. The last key element to an effective work agreement contract discusses consequences of terminating projects prematurely.
Drafting a Work Agreement Contract becomes easier once you know all the essential segments that go in it. It is also an important document since it negates any future financial risks that may result from unspecified or poorly notified terms of agreement. As you are drafting the template, first add your identifiers along with a mention of project duration. Next, dictate the responsibilities you seek from the contractor. Mention the rates you have negotiated and your choice method of payment. Add a confidentiality segment. Lastly, word out specifications for terminating the project before deadline. Follow this post to understand the five key elements that go into a work agreement contract.