An independent contractor agreement looks like a freelance contract but operates differently. The IRS, state labor boards, and the client all care about whether you're really an independent contractor or a misclassified employee. The agreement is one piece of evidence in that question — and the wrong language can expose both sides to tax, benefits, and unemployment liability. Scrutr reads the agreement, flags misclassification risk, and gives you the redlines that protect your status.
What makes an agreement an 'independent contractor' agreement (and not a disguised employment contract)
The IRS uses a multi-factor test (behavioral control, financial control, relationship type) to decide whether a 1099 worker is really an employee. Scrutr scans the agreement for clauses that push toward employee classification: required hours, exclusivity, equipment provided by the company, indefinite term with no defined deliverable, integration into the company's regular operations, and reimbursement of business expenses. Each is flagged with severity and a suggested redline.
IP assignment — narrow it to the work you're being paid for
Most contractor templates assign all IP the contractor creates 'during the term' to the client. That can sweep in your personal projects, your tools, your prior work. Scrutr suggests three standard fixes: limit IP assignment to work created within the scope of the engagement, carve out pre-existing IP (prior work, tools, libraries you bring to the engagement), and reserve a license back for the contractor to use generic methods and processes in future engagements.
Indemnification — the asymmetric clause to fix
Contractor agreements often require the contractor to indemnify the client for any claim arising from the work, with no reciprocal obligation. For a freelancer earning $20K from a project, an unlimited indemnification obligation is a catastrophic exposure. Scrutr flags one-way indemnification, suggests adding a mutual obligation (client indemnifies for its IP, branding, business decisions), capping the contractor's indemnity at the fees paid, and excluding consequential and punitive damages.
Termination and kill fees
A fair contractor agreement defines: termination for convenience with notice (typically 14–30 days), termination for cause with a cure period, kill fee or final payment structure on early termination, and what happens to work-in-progress. Scrutr flags one-way termination rights (only the client can terminate at will), the absence of a kill fee, and unclear ownership of work-in-progress at termination.
How Scrutr's contractor review differs from a lawyer's
An attorney reviewing a contractor agreement typically charges $300–$1,000. Scrutr produces the same risk analysis, redlines, and negotiation email in 60 seconds — free for your first review. For high-fee engagements ($100K+), exclusive engagements, or contracts in regulated industries, an attorney is still appropriate. For the standard 1099 work most contractors do, Scrutr is what makes the review actually happen before signing.