Contractor Agreement Template

by Aslam · February 8, 2023

A Contractor is a person who is hired by an individual or a company to provide services or orders. Usually, when we talk about a contractor, it refers to a person who is hired for construction purposes but there are many other types of contractors too. When a person or a company hires a contractor, they enter into an agreement known as a contractor agreement.

Brief Description of Contractor Agreement:

The contractor agreement explains the services that the hirer expects from the contractor along with the compensation that the hirer has agreed to pay to the contractor in exchange for his services. This means that if you sign this agreement, you can make sure that the hired contractor will provide the services that he agreed to and you will have the right to reject the work if it doesn’t fulfill the pre-defined criteria according to the contract. In the same manner, the contractor can also make sure that he is paid according to the schedule and that the hirer doesn’t stop his payment even when the work is completed.

Key Elements to include in the Contractor Agreement:

Name of the client/company or hirer who hired the contractor with complete address
Name of the contractor and his company with complete address
The date on which the agreement is being signed
Details of the services that the hirer requires from the contractor
A detailed description of each service that the contractor will provide
Acceptance criteria for the services provided by the contractor
Compensation offered by the hirer to the contractor in exchange for his services
Payments, installments, and other particulars i.e. dates and amount of each payment
Terms and conditions of the agreement
Validation and expiration of the agreement
Actions that will result in the termination of the agreement
Settlement clause in case of a dispute
Signature of the hirer, contractor, insurer, and witnesses

Here is a preview of a Free Sample Contractor Agreement Template created using MS Word,

Useful Tips for Creating a Contractor Agreement:

Understand the status of the contractor:
There is a very small difference between an employee and an independent contractor. This is why before you sign this agreement; you need to understand the status of your contractor to see in which category he lies.
Get the agreement in writing:
Verbal agreements are only useful for personal reasons and when you have a good and trustful relationship with the contractor. Other than that, you need to get the contractor in writing as the verbal conversation is impossible to prove in case of a dispute.
Understand all the terms in the agreement:
Before you sign the agreement, you need to read the entire agreement and understand each and every term from the point of view of the hirer and contractor. This way if there is a mistake or something that doesn’t go in your way, you can change it before signing.
Include a detailed explanation of the required services:
This is the most important part of this agreement. Here you need to explain and give detail of each service that the hirer requires from the contractor. Enlist the services and give a brief description of each service.
Include the payments and methods:
It is also very important to include the terms and conditions of the payments that the hirer will make to the contractor. This includes the amount of each payment, the dates on which payments will be made and the criteria to qualify for the next payment.