B. Steps To Take To Avoid Problems

If you are not a statutory or common law employee (which includes.findlaw leased employees, part-time workers, and temporaries, all of which will be discussed in Chapter Three) you legally may be considered an independent contractor. This is so even if you call yourself a consultant or subcontractor. As an independent contractor, it is crucial to discuss all the terms and conditions of your working relationship with a company or individual. This must be done before commencing work, no matter what your trade or profession. All key terms of the relationship, including the services to be rendered, payment, stages of payment, whether expenses are to be reimbursed (and to what extent), and the length (also known as the term) of the arrangement, should be understood and agreed upon to reduce misunderstandings.

The Sample Consulting Agreement beginning on page 32 illustrates many of the points to be contained in a document. Both parties should sign the agreement to avoid future problems.

After you have come to terms, it is essential to confirm the arrangement in writing. A handshake, or oral agreement, only indicates that the parties came to some form of agreement; it does not prove what the agreement was. Failure to spell out important terms often leads to misunderstandings and disputes. Even when key terms are discussed, the same spoken words that are agreed upon have different meanings from each party's perspective; written words limit this sort of misunderstanding.

Counsel Comments:Be sure that all changes, strikeouts, and erasures are initialed by both parties and that all blanks are filled in. If additions are necessary, include them in a space provided or attach them on a separate piece of paper but refer to it in the body of the contract.