How to Break a Contract With an Independent Contractor

Independent contractors are those who work for your business on a per-project, or as-needed, basis. These workers are paid based on pre-determined conditions and are typically not provided company benefits and guaranteed work. Independent contractors are typically hired at-will, meaning that the contract you have with them can be broken by either party at any time. When breaking a contract with an independent contractor, there are certain things to keep in mind.

Instructions

1. Stop providing the independent contractor work. Look at the contract you have with your independent contractor. You have an obligation to follow through with your end of the agreement. If you desire to break your contract with an independent contractor, you should not give her additional work past the extent of your contract. The contract is broken once the project ends and no more work is assigned. If you assign any work to her, you are liable to pay her.

2. Determine how the independent contractor is not living up to her end of the deal. A contract with an independent contractor can only be broken if the worker is violating the terms of your agreement or if the project ends. If the worker is violating terms of the agreement, put in writing your intent to break the contract with her. Specifically state in a letter what the worker is doing that is in violation of your contract with her.

3. Give as much notice as possible. This is true especially if you have had a long-lasting relationship with a worker. Be considerate to your workers, even if you have no legal obligation to give a notice that you are ending your relationship with them. If you have a positive working relationship with an independent contractor, he will complete the current project in an effective manner.

4. Tell the independent contractor that his work is no longer needed. Putting this notification in writing ensures that there is no doubt that you are breaking your contract with the worker.

5. Pay the worker for all completed tasks. The main obligation a business has to its independent contractors is to pay them in a timely fashion.

References

• HR World: Independent Contractor or Employee?
• Neighborhood Link: Employee or Independent Contractor?

Resources

• IRS: Independent Contractor (Self-Employed) or Employee?