Independent Contractor Agreement In India

Published on 09 Dec 2019 by Shivi

There are times when a company or service provider is required to hire an independent individual to complete a particular job in which the company holds no expertise. Hiring an independent contractor or individual can leave the business open to many vulnerabilities and to protect the business from any legal liabilities, it is important to have an independent contractor agreement in place. This article discusses the meaning of an independent contractor, the importance of independent contractor agreement, and importance clauses of an independent contractor agreement.

Who Is An Independent Contractor?

An independent contractor is an individual hired by a business to complete a particular job or project instead of assigning the work to an employee. The company assigns the work to the independent contractor and the manner in which the project or job is to be completed is not controlled by the company. This includes the material used, skils and techniques implemented and the additional labour hired by the independent contractor. 

An independent contractor is different from an employee in the sense that the independent contractor is a separate entity who runs their own business and performs the work for other businesses or individuals. On the other hand, an employee is someone who is hired by a company or person to perform certain tasks as assigned, in the manner prescribed by the company.

An independent contractor can be an individual or company that provides services to the company or person hiring them without being under their obligation as an employee. On the other hand, an employee can be an individual who is under the obligation to perform the tasks as per the guidelines set by the company.

Independent Contractor Agreement

When it comes to hiring an independent contractor for some work, it is important to have a legal contract in place to set down the terms and conditions relating to the work assigned and other specifications of the relationship between the hirer and independent contractor. This agreement is called an Independent Contractor Agreement and protects both the parties from any breach or legal issues in the future.

An independent contractor agreement is mostly used by companies who outsource work to independent consultants, or startups who hire freelancers to work for them.

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Important Provisions Of Independent Contractor Agreement In India

The first and foremost thing to keep in mind is that the independent contractor agreement must be well-written and drafted as per the needs and nature of the relationship between the hirer and independent contractor. Consult a good documentation lawyer in India to get your customised independent contractor agreement drafted accurately. 

Nonetheless, a simple independent contractor agreement in India must include certain key provisions to provide all-rounder protection to both parties. These important clauses of an independent contractor agreement are as follows:

  1. Details of the hirer and independent contractor: This clause includes the basic details of the person who has hired the independent contractor and the independent contractor such as their name, address, etc.

  2. Nature of services: The clause lays down the details of the services to be provided by the independent contractor.

  3. Time period: The agreement must include the time period within which the services must be completely provided by the independent contractor.

  4. Duties, responsibilities, and payment: This clause includes the duties to be performed by the independent contractor, the responsibilities undertaken and the payment or remuneration to be given to the independent contractor and the manner in which such payment is to be made. 

  5. Additional expenses: This clause stipulates who will be responsible to pay any form of additional or out-of-pocket expenses incurred in completing such services.

  6. Confidentiality: The clause protects any information exchanges by the parties during the agreement.

  7. Termination: The clause lays down the conditions in which the agreement may be terminated by either of the parties.

  8. Breach of agreement: Theis clause provides the remedies which can be availed by the hirer and the independent contractor in case of breach of the agreement by either side.

  9. Law and Jurisdiction: The provisions mentions the law application and jurisdiction under which the legal matter will fall if any arises in the future.

A legally binding independent contractor agreement can act as a tool to avoid any misunderstanding or confusion relating to the dealings between the hirer and the independent contractor. Consulting an experienced drafting and vetting lawyer in India can help the company in having a protective independent contractor agreement that protects the rights of the company as well as the independent contractor while providing a way out in case of a legal dispute.

Consult Legistify’s top drafting experts for drafting and vetting of contracts in India. Call us at 8468833013 or send us an email at [email protected]


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