The Definitive guide to Freelancer/Independent Contractor Agreements in South Africa (For both the Contractor and Principle)
When creating or determining the correct content to include in a Freelancer/Independent Contractor Agreement, it is always best to understand what the importance is of the clauses therein.
A Freelancer/Independent Contractor Agreement in its most basic form looks to assign a task or tasks to a person or entity which is external to the company or organisation. For example, outsourcing online advertising or social media campaigns, blog writing, website design, logo creation or the like.
In this blog we evaluate some of the key concepts and clauses that should be included in all Freelancer/Independent Contractor Agreements, and provide some background on why these are important!
If you would like to go directly to our shop and purchase our automated Freelancer/Independent Contractor Agreement, click below:
Contents of this Blog
- Nature of the Agreement
- Duration and Termination
- Principle and Contractor obligations
- Confidentiality and Non-Disclosure
- Intellectual Property
- Boiler Plate Clauses
Nature of the Agreement
It is important that the contractor and the principle are recorded as being two parties independent of each other. As such, the contents of the Freelancer/Independent Contractor Agreement should state that the contractor is not an employee of the principle, and as such, their relationship is not subject to the employment laws of South Africa, such as the Basic Conditions of Employment Act.
This is important for a number of reasons, some of which are given below:
- It ensures that tax responsibilities of the contractor’s income rest with the contractor;
- It allows for terminating the contract in a manner where the principle does not need to observe the employment laws of South Africa; and
- Will not bind the principle to making payment to the contractor in instances where the contractor takes annual or sick leave.
Duration and Termination
The duration and time of the engagement should be agreed to. This might, for example, be for a specified number of weeks or months, a specified project, or an indefinite period.
Hand-in-hand with the above should be how, and in what circumstances, a party to the contract may terminate it. For example, the contract may specify that either party may terminate on one month’s notice to the other, or a party may only terminate on the occurrence of a certain event, or not at all, but rather only terminate upon the expiration of the agreement.
Principle and Contractor obligations
The contract should clearly set out the roles and responsibilities of the respective parties.
In relation to the principle, this will normally entail what fees need to be paid to the contractor, and when those fees need to be paid.
With regard to the contractor, the exact nature and extent of the services that the contractor is to provide should be recorded, along with timeframes for delivery. This will allow for easy and objective metrics with which to measure the service levels and performance of the contractor, and to hold them accountable.
Confidentiality and Non-Disclosure
Naturally, both parties would like to prevent any of their own trade secrets and confidential information from being copied, reverse engineered or disclosed by the other party. As an independent contractor will most likely have a number of clients, some of which might be competitors to the principle, this is especially important for the principle to protect.
A vast majority of intellectual property, including inventions, product designs, creative works etc, may be created by contractors.
Unlike an employment relationship, by default, intellectual property, such as copyrights, which are created by a contractor are owned by that contractor.
As such, given the nature of the work, it is very important to ensure that any and all intellectual property that is created by the contractor for your use, is transferred to and is owned by you.
To the extent that your Freelancer/Independent Contractor Agreement does not contain an intellectual property assignment clause, we recommend that, at least for works which comprise copyrights, a separate copyright assignment agreement be entered into.
For more information on Copyright Assignment Agreements, and why you need one, please read here.
Boiler Plate clauses
Apart from the above, all Freelancer/Independent Contractor Agreements should contain standard boiler plate clauses (or standard clauses) which are included to ensure certainty and prevent ambiguity.
These clauses would include, for example:
- Non-Solicitation of staff measures
- Dispute Resolution procedures
- Non-Variation of Agreement provisions
- Severability Provisions
- Whole Agreement provisions: Representations made outside of the agreement do not comprise the agreement
- Indulgences: The fact that if a party does not act on a breach, for example, it does not mean that that inaction can be relied on in future;
- Assignment: The agreement may not be transferred to any other parties
All the documents you need on our website: At Hello Contract, we have taken into account all of the above considerations so that you can create a version of a Freelancer/Independent Contractor Agreement that is perfectly suited to your needs, and which is available here
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