WHAT IS AN INDEPENDENT CONTRACTOR AGREEMENT?

An independent contractor agreement is a legal contract that sets out the terms and conditions of the relationship between an individual or entity and the independent contractor, including the rights and obligations of each party. In Ontario, independent contractors are not governed by the Employment Standards Act. An independent contractor agreement is typically used in situations where the client requires specific services or expertise of the independent contractor, but does not intend to create an employer-employee relationship with the independent contractor. For example, if a retail store hires a marketing consultant to assist with advertising, the retailer may not wish to create an employer-employee relationship with the marketing consultant and would instead enter into the relationship with an independent contractor agreement. Independent contractor agreements are commonly used by individuals or entities wishing to temporarily hire a tradesperson for a specific job. Common terms of an independent contract agreement include:

  • Identification of the parties;
  • Details of the services to be provided;
  • Acknowledgment of independent contractor status;
  • Information on the scope of the services;
  • Rights of substitution;
  • Details of payment terms including compensation and expenses;
  • Intellectual property agreements;
  • Details on the exclusivity of the independent contractor’s services, if any;
  • Confidentiality clauses;
  • Non-competition and non-solicitation clauses;
  • Information on the term of the agreement including the option for the client to renew the term, if any;
  • Representations and warranties; and
  • Indemnification clauses.

If you are looking to enter into an independent contractor agreement, it is recommended to consult with an experienced business lawyer to draft or review the independent contractor agreement to ensure it clearly outlines the scope of the agreement and protects the rights and obligations of both parties.

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Disclaimer: The information contained in this article is not to be construed as legal advice. The content is drafted and published only for the purpose of providing the public with general information regarding various real estate and business law topics. For legal advice, please contact us.

About the Author:

Shahriar Jahanshahi is the founder and principal lawyer at Jahanshahi Law Firm with a practice focus on representing business star-ups and investors in the province of Ontario. For further information about Shahriar Jahanshahi, click here.