Subcontractor agreement document pack

Most disputes between a company and a contractor are downstream of a fuzzy scope, an unspoken IP assumption, or an undefined acceptance criterion. The agreement that prevents the dispute is shorter and clearer than the agreement that fights it.

Who this pack is for

You're hiring an independent contractor to deliver specific work — software, design, copy, marketing, video editing, consulting, anything project-based. You want a single document that covers the scope, the price, the timeline, who owns what, and the rules of engagement. You don't want a 40-page master services agreement (you're not a Fortune 500 procurement team), but you also don't want a one-line scope on a Notion page that becomes contested when the project drifts.

When to use it

Sign before any work begins. The first conversation is scope and price; the second is the agreement; the third is the kickoff. Skipping the agreement and starting on a handshake is the most common cause of contractor disputes — and it's avoidable. For ongoing relationships with the same contractor across multiple projects, consider a master service agreement (MSA) with project-specific Statements of Work — but for first-time engagements and one-off projects, the pack's single-document approach is cleaner. Pay through the agreed schedule (usually 50/50 or by milestone); never pay 100% upfront unless you have history with the contractor and the project is small.

What it doesn't cover

This is for an independent-contractor relationship, not employment. It does not cover: full-time employment (with payroll, benefits, employment-tax obligations), W-2 contracting through staffing agencies, exempt vs. non-exempt classification questions (those are FLSA / state wage-law questions), or work that falls into legal gray areas like 'gig economy' classification. It does not address SAG-AFTRA / WGA / DGA union talent in entertainment production (those have their own contract structures). It does not handle international contractors with their own classification, tax-treaty, and IP-export issues; for non-U.S. contractors, get specialist advice. And it does not handle situations where the 'contractor' is actually an employee misclassified — the agreement won't save the relationship from misclassification claims under the IRS, DOL, or state ABC tests if the work-relationship factors point to employment.

State-specific notes

Rules vary by jurisdiction. Below are notes for the states where subcontractor agreement runs into the most variance. If your state isn't listed, default to your state's tenant-rights handbook or local legal aid.

California (CA)

California's AB 5 and the ABC test (Cal. Lab. Code § 2775) make contractor classification much stricter than the IRS standard. To be properly classified as an independent contractor in California, the worker must (A) be free from control and direction, (B) perform work outside the usual course of the hiring entity's business, (C) be customarily engaged in an independently established trade. Failing any prong = employee. The contractor agreement is necessary but not sufficient; the actual working relationship must satisfy ABC.

Cal. Lab. Code § 2775 (AB 5 / ABC test) →

New York (NY)

New York's Freelance Isn't Free Act (FIFA, NYC Admin. Code § 20-927) requires written contracts for freelance work over $800 and imposes timely-payment obligations on hiring parties (within 30 days of completion or as the contract specifies). FIFA gives freelancers private rights of action with double damages and attorney fees. The pack's standard payment terms satisfy FIFA; the written contract requirement is satisfied by the agreement itself.

NYC Admin. Code § 20-927 (Freelance Isn't Free Act) →

Common questions

What's the difference between a subcontractor agreement and an employment agreement?

Subcontractor: the worker is an independent businessperson, sets their own hours, uses their own tools, can subcontract or work for others, is paid per project or invoice, gets a 1099-NEC at year-end. Employment: the worker is on payroll, gets a W-2, has taxes withheld, may have benefits, follows the employer's schedule and methods. The legal classification depends on the actual relationship, not just the label — IRS uses a multi-factor test, states like CA use ABC test, and misclassification has serious consequences (back payroll taxes, benefit liability, fines). When in doubt, talk to a CPA or labor attorney.

What does the IP ownership clause do?

It transfers ownership of work product from the contractor to the client. The pack's clause uses the work-for-hire doctrine where applicable (17 U.S.C. § 101) plus a backup IP assignment for everything else. Without this clause, the contractor retains copyright in the deliverables and the client gets only an implied license — usable, but not transferable, sellable, or modifiable without permission. Always include IP assignment language for any creative or technical deliverable.

What's the acceptance criteria language doing?

Section 2 of the pack gives the client 10 business days to inspect deliverables and either accept or list specific failures. Silence past 10 business days = acceptance. This protects both sides: the client can't sit on deliverables forever and then refuse payment, and the contractor knows when work is final. Customize the inspection window for your project (longer for complex software, shorter for simple deliverables).

Should I include indemnification?

The pack's standard agreement doesn't include broad indemnification — it's deliberately middle-weight for typical contractor work. For higher-risk engagements (medical-device design, financial-software development, work that could expose you to third-party liability), add an indemnification clause: contractor indemnifies client for claims arising from contractor's negligence, IP infringement, or breach of warranties. For low-risk work (a logo design, a marketing email), the standard agreement is sufficient.

What about insurance?

Not required by the pack but worth requiring for higher-risk work. General liability insurance ($1M / $2M is typical) covers third-party claims; professional liability (errors and omissions) covers claims about the contractor's professional advice or work product. For physical work or work involving company property, also require workers' comp (where allowed for contractors) and auto insurance. Add an insurance section requiring proof of coverage as a condition of starting work.

What's the termination clause doing?

Either party can terminate on 14 days' written notice (Section 9). Client pays for work performed through termination. This is intentionally permissive — most freelance relationships shouldn't be locked in, and either side should be able to walk if the fit is wrong. For longer engagements with significant up-front investment, consider replacing with a fixed term + early-termination fees, or with for-cause-only termination during the project.

What if the contractor goes over budget or schedule?

The pack's structure is fixed-fee for the agreed scope. Scope changes (additions or modifications during the project) typically warrant a written change order with adjusted fee and timeline. Without change orders, contractors and clients argue about whether requested-but-undocumented additions are 'in scope' — they almost never are. Build a habit of memorializing changes in writing, even if just an email confirmed by both sides.

Should I have the contractor sign an NDA separately?

The pack includes confidentiality obligations (Section 7), so a separate NDA is usually unnecessary. For especially sensitive engagements where the contractor will see trade secrets or pre-launch information, layering a one-way NDA on top of the contractor agreement is fine — the NDA can have stricter terms (longer duration, broader definition of confidential info) than the contractor agreement's standard clause.

Sources

Primary legal sources cited above. These link to free, public versions of the statutes, regulations, and case law referenced in this pack.

17 U.S.C. § 101 (work-made-for-hire)

Pike provides plain-language legal information, not legal advice. State and local rules change. If money, custody, or your housing is on the line, talk to a licensed attorney or your local legal aid office.