Independent Contractor Agreement Review — Key Clauses & Risks Explained

Contractor vs Employee — Why It Matters

The line between independent contractor and employee is thinner than most people think. The IRS and Department of Labor use multiple factors to determine worker classification:

• Behavioral control — does the company control how, when, and where you work? Contractors should have autonomy over their methods and schedule.
• Financial control — do you use your own tools, have the opportunity for profit or loss, and work for multiple clients? These point toward contractor status.
• Relationship type — is there a written contract, benefits, or indefinite duration? A project-based engagement with a defined end date supports contractor classification.

Key Clauses to Check

• Scope of work — must be specific. Vague language like 'and other duties as assigned' is an employee relationship red flag.
• IP ownership — who owns the deliverables? Standard: contractor retains IP until paid in full; client gets a license upon payment.
• Payment terms — when are invoices due? Net-15 and Net-30 are common. Include late payment penalties (1.5% per month is standard).
• Termination clause — can either party terminate without cause? What's the notice period? Is there a kill fee for early termination?
• Liability and indemnification — cap your liability at the fees you received for the specific project. Don't agree to unlimited indemnification.
• Non-solicitation — reasonable restrictions on poaching clients or employees are OK. Lifetime bans or industry-wide restrictions are not.

AI Review — 30 Seconds

Instead of spending hours comparing your agreement against best practices, upload it to ContractRev. Our AI checks every clause against known risk patterns in 30 seconds — flagging misclassification indicators, overbroad IP grabs, one-sided liability terms, and vague scope language.

3 free credits, no sign-up required. Get a detailed report with severity scores, plain-English explanations, and suggested fixes.