Engaging contract workers can sound relatively simple and straightforward. You need some work done. They can do the work. You agree on a price. Simple.

In reality, when engaging contractors you should consider a number of potential issues that could arise. For example, have you thought about the contractor poaching your clients or staff? What about a failure to perform the work correctly? Is there liability for you to pay superannuation? What if they leave the work unfinished to accept a more lucrative deal? What if they criticize you or your company on social media?

It is then sensible to take steps to address each of these issues through a comprehensively drafted and executed Contractor’s Agreement.

What is the Relevant Law?

There is no ‘Contractor’s Act’ setting out in one uniform document the legal obligations a principal owes a contractor or vice versa. Instead, general contract law governs this relationship. Other relevant areas of law including consumer, superannuation and industry codes may also apply depending on, among other things, the contract’s purpose

What is a Contractor’s Agreement?

A Contractor’s Agreement (or Contractor’s Contract) is a formal contract between a Principal and a contractor. Both parties can be natural persons or entities.

What Will it Cover?

A Contractor’s Agreement will clearly define, among other things:

  • The scope of the contracted work,
  • The time for completion of the contracted works,
  • Reporting and communication methods,
  • The payment (including ongoing or progress payments),
  • Liability for works so performed,
  • Use of equipment,
  • Confidentiality and intellectual property considerations,
  • Obligations concerning insurance,
  • Dispute resolution mechanisms, and
  • Whether the work can be sub-contracted and/or outsourced.

Importantly, the agreement will define the relationship of the parties as that of principal and contractor.

Conclusion

A commercial lawyer can assist you with identifying the legal issues and preparing a binding Contractor’s Agreement that covers the issues identified above, and anything else you require (within reason!).

If you engage contractors to complete work, don’t just rely on a handshake, particularly if it is a high-value transaction for you and your business. Having a correctly drawn agreement signed before the contractor performs any contract work will help each party clearly understand their rights and responsibilities to one other, and will be invaluable if the contract’s scope gets derailed. LegalVision’s experienced contract lawyers would be delighted to assist you with drafting or reviewing your contractor’s agreement.

Questions? Please get in touch on 1300 544 755.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer