Independent Contractor Agreement for US Companies: 15 Required Clauses

An independent contractor agreement is the document that protects your IP, defines the work, and limits your exposure if something goes wrong. A bad one leaves your code unowned, your data exposed, and your company defending claims that should have been contractually impossible.

This guide walks through the 15 clauses every US independent contractor agreement needs, with sample language and the legal authority behind each one. The audience is US founders, operations leads, and counsel drafting agreements for domestic and international contractor engagements.

1. Parties

State legal names, entity types, and addresses. For US entities, include state of incorporation. For international contractors, include country and business registration number.

This Independent Contractor Agreement (“Agreement”) is entered into on [Date] between [Client Legal Name], a [State] [entity type] at [Address] (“Client”), and [Contractor Legal Name], [individual / entity type] at [Address] (“Contractor”).

Misidentified parties create enforceability problems. Use the full legal name from incorporation documents.

2. Services Description

Contractor shall provide the services described in Exhibit A (“Services”). Contractor shall perform the Services in a professional and workmanlike manner, consistent with industry standards. Contractor shall not perform any services outside the scope of Exhibit A without a written change order signed by both Parties.

Avoid “such services as Client may request from time to time”. It eliminates the scope boundary. For long-term engagements with multiple projects, use the MSA + SOW structure described in MSA vs SOW for international contractor engagement.

3. Term

This Agreement commences on [Start Date] and continues until [End Date] or until terminated as provided herein. The Agreement may be renewed for additional terms by mutual written agreement.

Avoid indefinite terms without a termination clause. Indefinite engagement looks like employment and creates classification risk.

4. Compensation

Client shall pay Contractor [Fixed fee of USD [Amount] / Hourly rate of USD [Rate] capped at USD [Cap] / Milestone payments per Exhibit A]. Contractor shall invoice [monthly / on milestone completion]. Client shall pay undisputed invoices within 30 days of receipt. Late payments accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law.

Net 30 is standard. Net 45 or 60 strains contractor cash flow and breeds disputes.

5. Expenses

Contractor is responsible for all expenses except that Client shall reimburse pre-approved travel and out-of-pocket expenses, submitted with receipts within 30 days. Expenses over USD 500 require written pre-approval.

Without an expense clause, contractors either absorb costs (which they price into their rate) or invoice ad-hoc (which causes disputes).

6. IP Assignment and Work Made for Hire

The most consequential clause. The standard two-step:

All deliverables, work product, inventions, designs, code, and other materials created by Contractor under this Agreement (“Work Product”) shall be deemed “work made for hire” as defined in 17 USC 101 to the maximum extent permitted by law. To the extent any Work Product does not qualify as work made for hire, Contractor hereby irrevocably assigns to Client all right, title, and interest in the Work Product, including all copyrights, patents, trade secrets, and other intellectual property rights, effective upon creation. Contractor waives all moral rights to the maximum extent permitted by applicable law and shall execute any further documents necessary to perfect this assignment.

Under 17 USC 101 (https://www.law.cornell.edu/uscode/text/17/101), work-made-for-hire status for contractors is limited to nine specific categories (collective works, motion pictures, translations, supplementary works, compilations, instructional texts, tests, answer materials, atlases). Software, design, and most product work do not fit. Copyright assignment also requires a writing signed by the assignor under 17 USC 204 (https://www.law.cornell.edu/uscode/text/17/204). For cross-jurisdictional details, see contractor IP assignment across US, India, and EU jurisdictions.

California gotcha: Under California Labor Code 3351.5(c), a contractor agreement with work-made-for-hire language deems the contractor a statutory employee for workers’ compensation purposes (https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=3351.5). For California contractors, drop the work-made-for-hire phrase and rely solely on the explicit assignment.

7. Confidentiality

Each Party shall hold the other Party’s Confidential Information in strict confidence and shall not disclose or use it except as necessary under this Agreement. Confidentiality survives 3 years post-termination for general information and indefinitely for trade secrets, customer data, and source code. Standard exclusions apply for information that is public, known prior to disclosure, independently developed, or required to be disclosed by law.

Trade secret claims under the Defend Trade Secrets Act (18 USC 1836) require you to show reasonable steps to maintain secrecy. A confidentiality clause is the most basic of those steps.

8. Non-Solicitation

During the Term and for 12 months following termination, Contractor shall not (i) solicit any employee or contractor of Client to terminate their relationship with Client, or (ii) solicit any customer of Client with whom Contractor had material contact during the engagement, for the purpose of providing competitive services.

Non-solicitation is more enforceable than non-compete in most US states because it does not prevent the contractor from working in their field. It only prevents targeted poaching. For state-by-state enforceability, see non-compete and non-solicitation clauses for contractors.

9. Contractor Representations and Warranties

Contractor represents and warrants that (a) Contractor has full authority to enter into this Agreement, (b) performance does not violate any third-party agreement (including non-compete or NDA), (c) the Work Product is original to Contractor and non-infringing, (d) Contractor is an independent contractor solely responsible for all taxes (including self-employment taxes) and is not entitled to employee benefits, (e) if Contractor is an entity, Contractor is duly organized and in good standing, and (f) Contractor maintains all licenses and permits required to perform the Services.

The IRS classification acknowledgement does not control IRS analysis under common-law rules (https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee). It does protect Client from contractor-side claims for benefits, overtime, or workers’ compensation.

10. Indemnification

Contractor shall indemnify, defend, and hold harmless Client from third-party claims arising from (i) Contractor’s breach, (ii) negligence or willful misconduct, (iii) IP infringement by the Work Product, or (iv) misclassification. Each Party’s total liability, except for indemnification and confidentiality breaches, shall not exceed fees paid in the 12 months preceding the claim.

IP indemnification is the most important indemnification term. If a third party sues for patent infringement on contractor code, you need the contractor on the hook for defense.

11. Insurance

Contractor shall maintain (a) Commercial general liability of at least USD 1,000,000 per occurrence and USD 2,000,000 aggregate, (b) Professional liability (errors and omissions) of at least USD 1,000,000 per claim, and (c) Workers’ compensation as required by law. Contractor shall name Client as additional insured on the general liability policy.

An indemnity is only as good as the indemnitor’s ability to pay. For low-fee engagements, this clause may be scaled down or omitted.

12. Termination

Either Party may terminate for cause on 15 days written notice if the other materially breaches and fails to cure. Either Party may terminate for convenience on 30 days notice. On termination, Client pays for accepted Services through the termination date, Contractor delivers all Work Product within 5 business days, and each Party returns Confidential Information. Sections 6 (IP), 7 (Confidentiality), 8 (Non-Solicitation), 10 (Indemnification), 13 (Governing Law), and 14 (Dispute Resolution) survive.

Without a termination clause, ending an open-ended engagement requires fact-specific “reasonable notice” under common law.

13. Governing Law and Jurisdiction

This Agreement is governed by the laws of the State of [Delaware / California / New York / your state of incorporation]. The Parties consent to the exclusive jurisdiction of the state and federal courts in [County and State].

For US-only engagements, this prevents forum-shopping. For international engagements, it keeps the dispute in a US forum. Some countries (France, Brazil) refuse to enforce US judgments that violate local mandatory rules. For California-based workers, Cal. Lab. Code 925 limits out-of-state forum provisions for employment contracts, though it generally does not apply to bona fide contractors.

14. Dispute Resolution

Two approaches: courts (with the governing law clause above) or arbitration.

Arbitration option: Any dispute shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, conducted in [City, State] by a single arbitrator. Judgment may be entered in any court of competent jurisdiction.

Arbitration is faster, more confidential, and usually cheaper than court litigation, though harder to appeal. For most contractor engagements, arbitration under AAA Commercial Rules is the practical default. For high-stakes IP disputes, courts may be preferable for broader injunctive relief.

15. Entire Agreement

This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements. Amendments must be in writing and signed by both Parties. If any provision is held invalid, the remaining provisions continue in full force. This Agreement may be executed in counterparts and by electronic signature.

The counterparts and electronic signature language confirms enforceability under the federal E-SIGN Act and UETA, adopted by 49 states plus DC (https://www.uniformlaws.org/committees/community-home?CommunityKey=2c04b76c-2b7d-4399-977e-d5876ba7e034).

Quick reference checklist

For ongoing relationships, the 15 clauses sit in an MSA with a separate SOW per project (see MSA vs SOW for international contractor engagement). For one-off projects, all 15 clauses can sit in a single integrated independent contractor agreement with scope in an exhibit.

How Omnivoo handles independent contractor agreements

Omnivoo’s Contract Management product issues independent contractor agreements with all 15 clauses pre-aligned to US contract law. You select the contractor (US or international), the engagement type (project, hourly, retainer), the fee, and the timeline. The platform generates a contract ready for electronic signature under E-SIGN and UETA, with W-9 or W-8BEN collection enforced before the first payment.

The IP clause uses the standard two-step (work-made-for-hire plus explicit assignment) and includes a California-aware version that omits WMFH framing for California-based contractors to avoid the Cal. Lab. Code 3351.5 statutory employee issue.

See pricing. Contract Management is USD 49 per contract with payment transaction fees passed through at cost.

If you remember three things

1. Always include an explicit IP assignment in addition to work-made-for-hire language. The latter does not cover most contractor work.
2. Pick a governing law and a forum. Without them, a dispute that should take days takes months.
3. Use non-solicitation, not non-compete, for most contractor relationships. It is more enforceable and harder to attack.

Beyond those three, the 15 clauses are largely interchangeable across engagements. Once you have a clean template, drafting a new agreement is a 30-minute exercise in filling in scope, fees, and timeline.