Contractor Agreement

Payment, IP ownership and ending terms for contractor work.

Also known as: contractor agreement, freelance contract, consulting agreement

A contractor agreement defines deliverables, payment, IP ownership, confidentiality and ending terms for non-employee work. Its two load-bearing clauses are IP assignment (everything created belongs to the company, including pre-existing work adapted for it) and the boundary with employment (genuinely independent work, or misclassification risk).

must cover:  scoped deliverables + acceptance criteria · rate and schedule · IP assignment
             confidentiality · term + termination · independent-contractor status

Scope tightly enough to verify: milestone-based payment against acceptance criteria beats monthly retainers for output you cannot yet judge. And keep contractor-created IP flowing into the company with each delivery, not in a lump “at the end” that never quite arrives.

The classic mistakes:

No IP assignment. The costliest single clause to omit — discovered during fundraising diligence when the core feature turns out contractor-owned. No assignment, no final payment, no exceptions.
Employee treatment on contractor paper. Daily standups, fixed hours, company laptop, exclusivity — employment in substance invites reclassification. Keep the relationship genuinely independent or hire properly.
Vague deliverables. “Help with development” cannot be accepted or rejected. Scope, criteria, timeline — the contract that cannot fail acceptance cannot succeed either.
Auto-renewing forever. Retainers rolling without review accumulate cost and dependency. Fixed terms with explicit renewal decisions force the convert-or-end conversation (see contractors vs employees).
Cross-border payment/tax blindness. Foreign contractors trigger withholding, treaty and documentation questions (PPh in Indonesia). Clear it before paying, not during an audit.

Template it: one reviewed contractor agreement reused with scoped annexes. See outsourcing for agency-scale versions of the same risks.