This is the story all about how my life got flipped, turned upside down…
(Please tell me you get the reference)
No but really, this IS a story about how I learned a business lesson that I 100% should’ve already known. I mean, I’m a practicing lawyer for heaven's sake! But I too was once a victim of a contract pitfall.
The short of it is this: I onceused a staffing agency to expand my law firm. Without me knowing, someone on my team signed a contract to hire a paralegal.
The paralegal was… not great. She didn’t deliver and we let her go with swiftness. Then, we hired another one (from the same agency). And you guessed it… she was equally not good.
Cue deciding we would never work with this agency again and politely letting them know their agency wasn’t “meeting expectations.” This is where the lesson was unfortunately learned…
They said, “Sure, we can be done. But you owe us $5k first.” 🤯
When I say my jaw literally DROPPED. I thought surely that couldn’t be right, so I turned to the contract… and unfortunately yes, that was correct. Thanks to minimum fees and other silly little things I didn’t have the opportunity to read and agree to (another lesson), we did, in fact, owe them five grand.
Moral of the story? Read your contracts!!!
As a small business owner or solopreneur, one of the best and easiest ways to expand your team is to hire independent contractors versus full time employees (this is something I do for my own business and LOVE), but before signing on the dotted line, make sure you know what you’re agreeing to.
An independent contractor agreement should ideally be designed to benefit both parties and you absolutely should not enter a working relationship with an independent contractor without one.
In this blog post, I’m breaking down why independent contractor agreements are a must-have, how they benefit both parties, and the key elements of an effective contract so that you can start outsourcing with confidence!
Why Independent Contractors Need Contracts
First, let’s start with why, as an independent contractor, YOU need a contract for your clients.
(And for the sake of making sure you understand what I mean by “independent contractor,” this section is for you if you identify as a freelancer, service provider, or business owner who takes on clients WITHOUT becoming an official employee for the brand or company you’re working with.)
If this is you, chances are you already know you need a contract for your clients, but you might not fully realize the most important clauses to include and why. So, let’s cover those!
✅ Clarity on Scope and Payment
Without a contract, you're relying on informal agreements like email threads or DMs, which can easily lead to miscommunication. A contract clearly outlines what’s included (and not included) in your services, your rate, payment schedule, and when payments are due. This helps you get paid on time and avoid scope creep.
✅ Legal Protection
Contracts are legally binding documents, which means that should a dispute arise – say, over a missed payment or an unrealistic request – you have a written agreement to fall back on. This gives you a stronger position if you ever need to escalate the matter legally.
✅ Establishing Boundaries
An independent contractor agreement template often includes clauses that protect your time, like policies on revisions, cancellations, or late payments. Including these boundaries upfront helps you avoid burnout and awkward conversations later.
✅ Defining Contractor vs. Client Responsibilities
Many issues in contractor-client relationships come down to mismatched expectations. A good contract outlines what the contractor is responsible for, such as deliverables, timelines, and communication, as well as what the client is expected to provide, such as assets, approvals, or access to tools. This mutual accountability keeps the project on track and reduces friction.
How Independent Contractor Agreements Benefit the Client
When hiring an independent contractor, many clients assume contracts are solely for the benefit of the contractor, but that couldn’t be further from the truth. Contracts actually protect BOTH parties involved.
If you’re a client of an independent contractor, here’s how you’re protected specifically:
✅ Peace of Mind on Deliverables
As a client, you want to make sure the work you’re paying for gets done AND that it gets done right. A contract defines exactly what the contractor is responsible for delivering, when it's due, and how it will be delivered. That means fewer surprises and more accountability.
✅ Protection of Business Assets
Most freelance contract templates include confidentiality clauses, non-disclosure terms, and intellectual property agreements. These help protect your business ideas, proprietary methods, or sensitive information shared during the project.
✅ A Smoother Working Relationship
From communication preferences to revision policies, contracts foster a transparent relationship. When both parties are on the same page from day one, projects tend to go smoother and that’s good for business on both sides!
✅ Quality Assurance
Outsourcing can feel scary as a business owner because you want to know that the work being done is being done well and it can often feel like you are the only one capable of that. Your contract can specify quality standards or project milestones that must be met for payment to be released.
This provides an avenue for you to hold the contractor accountable for the quality of work and make sure that it meets your standards before ever being presented to your audience! This alone can give you a TON of peace of mind when it comes to outsourcing in your business.
Key Elements of an Effective Independent Contractor Agreement
In order for both parties to be protected with an independent contractor agreement like described above, the contract should include:
- Scope of Work – What’s included (and excluded)
- Payment Terms – Rate, due dates, and late fees
- Timeline & Deadlines – When deliverables are due
- Revisions – How many are included and when they must be requested
- Termination Clause – What happens if either party needs to end the contract
- Confidentiality & IP Ownership – Who owns what after the project is done
These elements aren’t just legal fluff! They’re what keep your working relationship clear, professional, and efficient.
But here’s the thing – even when you include those things in your contract, you run the risk of NOT being protected if you fall into common contract traps, like:
❌ Using vague language
❌ Using a generalized contract template
❌ Leaving out important clauses like intellectual property ownership
❌ Failing to get both parties’ signatures
❌ Starting work before the contract is signed
This is why I always recommend working with a lawyer to craft contracts that are specific to you and your business OR, even easier, using lawyer drafted contract templates that are designed with your industry in mind.
(AHEM, that’s literally what TBL’s Contract Template Shop is!)
So, who provides the contract?
Now that you know why independent contractor agreements are so important – for both the contractor and the client – a common question that people ask is who is supposed to provide the contact in this working relationship? The contractor? The client? Both?
My answer: it technically doesn’t matter!
Typically an independent contractor will provide the contract since they’re the one offering the service, but savvy clients will often have their own contract ready too, especially if they work with multiple freelancers.
The key is that only ONE contract should be signed, so if both parties have their own, it’s worth reviewing them together and choosing the most comprehensive or combining terms into one solid agreement. The most important thing to remember is that the goal here is mutual protection, not a power play!
Grab Your Independent Contractor Agreement Template
Overall, investing the time and effort into creating a properly structured contract is a form of risk management that can save both – independent contractors and their clients – from future headaches, legal complications, and financial losses.
While you could of course attempt to DIY a contract from a free download or piece them together from past clients, there’s a good chance you’ll leave important protections on the table, which is not what you want!
So, to make things easy for you, I’ve created a fill in the blank contract specifically designed for independent contractors that can be used to protect both parties and ensure that everyone is on the same page about important terms, conditions, and expectations by covering all of the essential aspects of the relationship!
➡️ FOR CONTRACTORS: created for any independent contractor (videographers, photographers, assistants, etc.) that will be taking on clients to provide a service
➡️ FOR COMPANIES: created for businesses that are ready to outsource work to independent contractors (*not full-time employees)
Need both? Here’s the bundle!
Overall, if you’re a business owner looking to expand your team, working with independent contractors can be a GREAT way to do it without having to hire a full time employee, but with anything in business, you want to make sure you do it RIGHT!
If you aren’t sure where to start with outsourcing to contractors, this blog post provides a full list that could serve as a great starting point.
And if you happen to BE a contractor reading this and are looking for some help implementing contracts in your business, here’s a few resources for you specifically:
⭐️ 6 Things To Include In Your Independent Contractor Agreements
⭐️ The Hardest Working Clauses In Your Independent Contractor Agreements
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