Termination of Independent Contractor Agreement Template

Scenario for no reason: John and Hannah have seven months in their 12-month contract. John is satisfied with Hannah`s work. However, John`s wife falls ill and he realizes that he will have to reduce his hours and perhaps retire at some point. As the blog is primarily an advertising medium and John no longer wants to accept new customers, he makes the decision to end the blog. He tells Hannah at their next meeting that he will take care of the blog and that his services are no longer needed. John gives Hannah a cheque that includes both the $1,500 cancellation fee and a prorated payment for the work she has already done in the past month. The purpose of this agreement is to inform a party that the independent contractor or company wishes to terminate the independent contractual agreement. It should only be used if the independent contractual agreement allows for termination after delivery of the notification to the other party. Get this contract termination letter for free. Any unpaid service or work performed prior to termination of the Agreement will be paid for in accordance with the terms of the Agreement.

Once you`re ready for termination, contact the freelancer and let them know your decision. The type of contact depends on your relationship and how you usually communicate. An article on LawDepot states that in a long-term relationship, it is often considered appropriate to convey the messages in person, whether through a face-to-face meeting, video conference, or phone call. In the case of a short-term or largely impersonal contract, an email may suffice. If you choose to deliver messages by phone or one-on-one conversation, you should also receive an email or paper notification. Once you understand what you are contractually obligated to do, you can start terminating the contract. Your relationship with a freelancer is entirely contractual. Unless the contract signed by both parties contains illegal terms, you and the freelancer are bound by its terms. Initiating a termination of an independent contractor without giving reasons is usually a simple process, although there may be challenges. These include: This form has been created for general information purposes only. They do not constitute legal advice, advertising, solicitation or tax advice.

The submission of this form and the information it contains is not intended to establish a customer relationship and its receipt does not constitute justification. You should not rely on this document or such information for any purpose without seeking the legal advice of a duly licensed attorney, including, but not limited to, reviewing and advising on the terms of this form, the appropriate approvals required in connection with the transactions provided for in this form, and any securities laws and other legal matters; which are considered in this form or in the operations provided for in this form. Hiring a contractor is another matter. You and the contractor develop the terms of the work, and both parties are responsible for compliance with the agreement. If you choose to terminate a freelance contract, you may still be responsible for performing your responsibilities (for example. B pay for the freelancer`s work), unless you can terminate the contract for cause. These causes are usually set out in the contract and may include the following: You should invest the same time and consideration to end a relationship with a contractor as an employee. Although their status is not the same, it is important to maintain professionalism during the process. It`s not just the ethical thing to do; Entrepreneurs are people, after all, but it`s also important to protect your business at this point. In addition, contracts for independent contractors often include termination provisions that require the terminating party to terminate a certain number of days or weeks in advance in order to legally terminate the contract. These provisions must be strictly followed. If there is no written agreement and there is no specific oral provision regarding the termination of the oral contract, the parties are best served by simply discussing the situation and deciding on the best way to end the relationship.

If the independent contractor has spent money on materials and supplies to carry out the project and the company suddenly terminates the relationship, the independent contractor could reasonably sue for breach of an oral contract. For companies, it is always better to find amicable conditions for the termination of the relationship to avoid a possible lawsuit. With regard to the termination provisions, the agreement on independent contractors should not stipulate that the parties can leave at any time, as this indicates an employment relationship. An all-you-can-eat employment relationship means that the company and the employee have the right to terminate the employment relationship at any time with or without reason or notice. If your independent contractor contract includes a provision that allows the parties to terminate the relationship at any time, revise the agreement to include a termination provision with at least some sort of notice period necessary to terminate the contract. IF THERE IS NO WRITTEN AGREEMENT: If there is no written agreement between the parties, then the question must be asked: What are the terms of the oral contract between the parties? Have the parties already talked about how the relationship could or should be terminated if necessary? Many of our firm`s clients hire independent contractors. When the independent contractor relationship is no longer satisfactory or the reason for the relationship no longer exists, clients often wonder how to properly end the relationship. Practical tips: When creating a termination provision for an independent contractor contract, make sure it`s not too complicated. Here`s an example of a simple but effective termination provision: IF THERE IS A WRITTEN AGREEMENT: One of the first things I ask the client is whether there is a written agreement between the independent contractor and the company.

If this is the case, I ask the client to send it to me for legal review. I evaluate it carefully on all provisions relating to « termination ». [Name of terminated party] wishes to inform you that it intends to terminate the independent contractual agreement from [date of agreement] (the « Agreement »). Termination will be made on [Termination Date]. As one article on Lawyers.com notes, if the contractor violates the terms of the contract, you may be able to break the contract without having to announce your decision in advance or make a financial payment. Many independent contractor contracts contain termination provisions that describe the terms under which the agreement can be terminated by the business or independent contractor. These termination provisions for independent contractors should be strictly followed in order to avoid infringement actions. John is a freelance handyman who decides to hire Hannah to maintain his blog. The contract between John and Hannah requires her to manage, update and promote her blog for $1,500 a month. The duration of the contract is 12 months and the terms are simple: John can terminate the contract for a valid reason, which means that Hannah is not doing her job properly, without punishment. If he terminates the contract without giving reasons, e.B. if he goes bankrupt or reduces the budget of his website, he must notify Hannah by email and pay her a cancellation fee of $1,500.

Before informing the contractor of your decision to terminate their relationship with your business, carefully review their contract, preferably with the help of your lawyer. You should pay close attention to the termination clause in the independent contractor agreement, which should include the following: Many companies hire independent contractors, sometimes called « freelancers » or « 1099 employees », to carry out work or carry out projects for the company. These workers are not employees, and their mandate in the company, as well as their professional responsibilities and performance standards, are defined by their contract. While terminating a contract with a contractor is not uncommon, the process is different from firing or firing an employee. According to SCORE, many companies mistakenly classify workers as entrepreneurs, even if their jobs are those owned by employees. This can become a problem if a disgruntled entrepreneur decides to sue your business for benefits and compensation. Ask your attorney to review your policies regarding 1099 contractors so that you can comply with federal and state labor laws. Many companies are used to working according to « arbitrary » employment standards. This means that a company can fire an employee for almost any reason, as long as the reason for the dismissal does not violate anti-discrimination or whistleblower protection laws.

In addition, employers generally have minimal liability to laid-off employees, unless the employee has been promised certain additional benefits, such as severance pay or health benefits. LEGAL NOTICE: We strongly recommend that you tailor this document to your individual situation, as you may need additional clauses to better protect your business from possible legal issues. .