Sign an independent contractor agreement online

What a contractor agreement is for

An independent contractor agreement engages someone to do work for your business without employing them. It sets the services, the fee, who owns what is produced, and how either side can end it. Used well, it also records the facts that show the person is genuinely self-employed.

That last point matters, because the label on the document does not decide employment status. Tax authorities and courts look at how the relationship works in practice.

Employment status: the real risk

In the US, the IRS applies a common law test of behavioural control, financial control and the relationship of the parties, and some states go further. California's ABC test, from Assembly Bill 5, presumes a worker is an employee unless the hirer proves all three limbs.

In the UK, the off-payroll working rules, known as IR35, can make the client responsible for deciding status and deducting tax where the contractor works through their own limited company and the client is medium or large. The agreement should match reality: the right to send a substitute, control over how the work is done, and the contractor supplying their own equipment.

We are not giving legal or tax advice here. If a contractor works full time for you for months, take advice on status before you rely on the contract.

Clauses that matter most

Read these before you send, and be wary of a template copied from a different country.

• Scope of services, or a reference to statements of work issued under the agreement.
• Fees, invoicing and payment terms, and who pays expenses.
• Intellectual property: an outright assignment to the client of everything created for the project. In the US, most contractor work is not 'work made for hire' unless it falls in one of the statutory categories, so an assignment is needed. In the UK, section 90(3) of the Copyright, Designs and Patents Act 1988 requires an assignment of copyright to be in writing and signed by the assignor.
• Confidentiality, often with a separate NDA.
• Substitution and control, to support self-employed status.
• Insurance: professional indemnity and public liability for trades.
• Termination on notice and for breach, and what is paid for work in progress.

Who signs

The client signs through someone with authority. The contractor signs personally, or, if they trade through a company, as a director of that company. Make sure the party named at the top of the agreement is the one signing at the bottom, because a mismatch between 'Jane Smith' and 'Smith Consulting Ltd' muddies who owns the IP and who invoices.

Because the IP assignment needs the assignor's signature, the contractor's signature is the one you cannot do without.

Mistakes to avoid

Starting work before the agreement is signed is the most common, and the costliest when ownership of code or designs is later disputed. Another is using an employee contract with the word 'contractor' swapped in, complete with holiday pay and fixed hours, which undermines the very status you want to record.

Sending it with Sign PDF

Upload the agreement and Sign PDF places signature and date boxes against the 'Client' and 'Contractor' blocks. Type 'contractor initials next to clause 7' in the assistant if you want the IP clause initialled separately. Add text boxes for the contractor's company number or tax ID.

The contractor signs in the browser after confirming a code sent to their email. The completed PDF is sealed with a digital signature and timestamp, and the certificate of completion lists each signer's email, IP address and the time they signed. On the Full plan you can keep the agreement as a template and reuse it for each new contractor.