Before engaging in business with a contractor, it is prudent to make sure that all the involved parties have clarity regarding their roles and obligations in a relationship. This is why a contractor agreement is usually drawn up. The role of the agreement is to define the relationship between the contractor and the buyer who had ordered the service.
Some of the elements that are present in the contractor agreement include the scope of services that the contractor is obliged to provide, the timelines that are expected for each stage of the contract as well as the allowed variances in the cost of goods and services. A contractor agreement also sets out the rules determining the quality of work expected.
Other elements that are present in this type of agreement include the obligations of the person who had requested for the contract services. These include issues to do with the method of payment as well as the timelines of the payment.
Lastly, a contractor agreement sets out the penalties that the contractor and the individual seeking services will face if they don’t uphold their respective obligations. Most of the time, this involves a reduction in the amount of money paid to the contractor, legal action, and fines.
The contractor agreement has to be drawn up in such a manner as to represent the needs of both the contractor and the person looking for the services. This can be highly technical particularly for very long contracts that are likely to have complex structures. Legal advice is usually critical in drawing up this type of contractor agreement in the best way possible.