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July 26, 2022It is well known that many SMEs use contractors to assist with the delivery of services. However, we have noticed many SMEs either:
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Not having contractor agreements in place
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Having poorly drafted contractor agreements.
Here are four terms that you should ensure are properly drafted in your contractor agreements:
- Term and Termination of the Agreement
Many suppliers generally need to engage contractors for specified events rather than for a continuous period of time. Therefore, it is important that the contractor agreement makes clear the length of time you are engaging the contractor and how the contractor agreement can be terminated by either party. Many of the template documents found online do not adequately cover this point, therefore, it is important that you check what your contractor agreements say about the length and how to terminate the agreement. - Tax obligations
Generally contractors are self-employed and it is common for many wedding suppliers to pay contractors on a “cash in hand basis”. It would be a good idea to ensure that your contractors agreement makes it clear that it is the contractor who is liable to pay the tax on their earnings and that you as a supplier will not be responsible for this. - Intellectual Property
The starting point is that generally inventors or creators are the owners of their Intellectual Property. For example, a photographer generally owns the copyrights in their pictures. However, wedding suppliers should ensure that the contractor assigns to you all the intellectual property in the work that they complete whilst being engaged by you. - Confidential Information
Contractors are likely to be exposed to sensitive and confidential information about your business when working with you. Further ensure there is a well drafted confidentiality clause in your contract to protect your interests.
If you would like any assistance with your contractor agreements, please do not hesitate to contact us.
