What Should Go in a Contractor Agreement?
- JLAJLA
- Apr 21
- 2 min read
Intro
You’re engaging a contractor—maybe a designer, VA, developer, consultant or delivery partner. You’ve agreed on the scope and rate. But do you have the right agreement in place?
This post explains what to include in a contractor agreement to protect your business, your IP, and your working relationship.
Why It Matters
Contractor arrangements are flexible, but they still carry legal and financial risk. If you don’t have a proper agreement, you may face disputes about payment, scope, or ownership—and in some cases, risk having the contractor deemed an employee.
A well-structured contractor agreement sets clear expectations and reduces the chance of confusion or liability later.
What You Need to Know
What to Include in a Contractor Agreement
At minimum, your agreement should cover:
Scope and Deliverables - What the contractor is doing, how deliverables are defined, and how progress will be reviewed.
Performance Expectations - Set measurable standards—whether deadlines, quality benchmarks, availability requirements, or responsiveness expectations. Define what a successful outcome looks like.
Payment Terms - Fixed fee, hourly rate, or retainer? Include when and how the contractor will be paid, and what happens if they invoice late or stop delivering.
Status and Tax Obligations - Make clear the contractor is not an employee—and is responsible for their own tax, super, and insurance.
IP Ownership - Who owns the work product created? Should IP transfer to you on payment or on delivery?
Confidentiality and Non-Disclosure - Especially if the contractor has access to client data, internal systems or business processes.
Termination Rights - How either party can end the agreement, and what happens to work in progress or unpaid invoices.
Indemnity and Insurance - Clarify if the contractor must hold insurance and if they’re liable for losses caused by their actions.
Tip: If the contractor is working inside your systems or representing your business to clients, you need additional protections in place.
What Happens If You Don’t Use One
Without a contractor agreement:
IP ownership may be unclear
Scope creep is harder to manage
You may not be able to enforce confidentiality
You could be liable for unpaid tax or super if the contractor is later treated as an employee
Disputes over payment, timelines or quality become harder to resolve
Commercial Insight
A contractor agreement isn’t just about legal protection—it helps you run your business professionally. Clear terms reduce the time spent managing expectations, and help both sides know what’s required.
It also shows your contractor that you take the engagement seriously and value their role.
What to Do Next to Get Your Contractor Agreements In Order
Review your contractor agreements—do they clearly set out deliverables, IP, and status?
Use written contracts even for short-term or part-time engagements
Don’t rely on informal terms or verbal instructions
Get legal input to ensure your contractors are properly classified and protected
Closing Wrap
I help businesses put clear, enforceable contractor agreements in place—so they can outsource confidently without risking IP, misclassification or misunderstandings. If you’re working with contractors, let’s get the paperwork sorted properly.
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