Industry News

Recommended NEW Contract Language regarding Independent Contractors to meet AB-5 Requirements

Recommended NEW Contract Language regarding Independent Contractors to meet AB-5 Requirements

The following language is provided by CRC counsel Kahn, Soares, Conway for your use in contracts for services. These elements should be added to your existing contracts to meet AB-5 requirements. As always, we recommend you consult with your own counsel in developing contracts.

Recommended Recitals:

CONTRACTOR represents and warrants that CONTRACTOR is an independently established business entity formed as a [sole proprietorship, partnership, limited liability company, limited liability partnership, or corporation], that customarily provides services of the same nature as the services provided for ______ under this Agreement.

CONTRACTOR represents and warrants that CONTRACTOR advertises these services to and contracts with entities other than ______ .

CONTRACTOR represents and warrants that CONTRACTOR maintains a separate business location and has all required business licenses and tax registration, if any, in order to perform services under this Agreement.

Recommended Contract Insertions:

This Agreement between CONTRACTOR and ______ will constitute a valid and binding agreement between CONTRACTOR and ________ for non-exclusive services as a CONTRACTOR for __________ client.

CONTRACTOR shall have the right to set his/her/its own hours and location of work, consistent with the nature of the services provided under this Agreement. CONTRACTOR shall determine the method, means and manner of performance of, but not limited to, such matters as outlined in Exhibit “A” without restriction by .___________is interested only in the results to be achieved from CONTRACTOR’S performance of the services CONTRACTOR shall provide his/her/its own resources and equipment and direct their operation in all respects when necessary to perform these services. Notwithstanding this Agreement, CONTRACTOR shall have the right to provide the same or similar services to entities other than without restriction. shall have no authority, control, or liability regarding CONTRACTOR’s performance or activities before or after each instance, wherein, CONTRACTOR may perform under this Agreement.

The parties herein are and intend to remain independent parties.  Nothing in this Agreement shall be deemed or construed to create the relationship of principal and agent, or of partnership or joint venture, and neither party shall hold itself out as an agent, legal representative, partner, subsidiary, joint venture, servant or employee of the other.

CONRACTOR will at all times indemnify and hold ____, _______ and their respective agents, contractors and employees harmless from any and all claims, damages, liabilities and costs (including attorneys’ fees) arising out of any material breach by CONTRACTOR of any representation, warrant or agreement made by CONTRACTOR hereunder or arising out of CONTRACTOR’s services.

CONTRACTOR EMPLOYEES, AGENTS AND SUBCONTRACTORS.

a. CONTRACTOR shall furnish at CONTRACTOR’s own discretion, selection and expense, the employees, agents or subcontractors which are necessary in order to provide services pursuant to this Agreement.

b. CONTRACTOR shall be solely responsible for the direction and control of the employees, agents and subcontractors and shall determine the method, means and manner of the performance of the work of its employees, agents and subcontractors based on the obligations required by this Agreement.

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