An independent contractor agreement—also known as a 1099 agreement or freelance contract—is a contract between a client willing to pay for the performance of services by a contractor (person, sole-proprietor, or single-member LLC) who is willing to perform the services. Under the Internal Revenue Code (26 U.S.C. §3509), an independent contractor is not an employee, and the client hiring an independent contractor is not responsible for tax withholdings and payment of FICA taxes. An independent contractor agreement should be in writing, and will usually address issues such as the (1) scope of the work (description of the services); (2) terms and length of the project or service; (3) payment details, including fee deposits and billing procedure; and (4) confidentiality, non-solicitation, and dispute resolution clauses.

In Delaware, as in other states, an independent contractor agreement is a legal document that outlines the terms of a working arrangement between a client and a contractor who is not considered an employee. This distinction is important for tax purposes, as delineated by the Internal Revenue Code (26 U.S.C. §3509), which specifies that clients are not responsible for withholding taxes or paying FICA taxes for independent contractors. In Delaware, it is advisable for such agreements to be in writing to clearly establish the nature of the relationship and the expectations of both parties. A comprehensive independent contractor agreement typically includes the scope of work, project duration, payment terms, and clauses related to confidentiality, non-solicitation, and how disputes will be resolved. While Delaware state law will govern the interpretation and enforcement of such agreements, it is also important to ensure that the agreement complies with federal tax laws and classification criteria to avoid misclassification of employees as independent contractors.