INDEPENDENT CONTRACTOR SERVICES AGREEMENT

(Arizona – Comprehensive Template)

[// GUIDANCE: This template is drafted for use by Arizona counsel. It assumes a business-to-business relationship where the “Contractor” is organized as a separate legal entity. Edit bracketed fields, delete inapplicable options, and add schedules as needed.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Engagement & Scope of Services
4. Term; Termination
5. Compensation & Taxes
6. Performance Standards; Deliverables
7. Representations & Warranties
8. Covenants & Restrictions
9. Insurance
10. Indemnification & Limitation of Liability
11. Default; Remedies
12. Dispute Resolution
13. General Provisions
14. Execution Block
15. Schedule 1 Statement of Work
16. Schedule 2 State-Specific Worker Classification Rider (AZ)

1. DOCUMENT HEADER

Independent Contractor Services Agreement (“Agreement”) entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [CLIENT LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] having its principal place of business at [ADDRESS] (“Client”); and
• [CONTRACTOR LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] having its principal place of business at [ADDRESS] (“Contractor”).

The parties agree as follows:

2. DEFINITIONS

For ease of reference, the following capitalized terms are used throughout this Agreement:

“Affiliate” – any entity that directly or indirectly controls, is controlled by, or is under common control with a party.

“Arbitration Election” – the election made under Section 12.3(a).

“Client Materials” – any and all information, data, software, specifications, or other materials provided by Client to Contractor for use in performing the Services.

“Confidential Information” – Section 8.2.

“Deliverables” – all materials, work product, inventions, and other items to be delivered by Contractor under the Statement of Work.

“Services” – the services described in Schedule 1, together with any additional services mutually agreed in a written change order.

“Statement of Work” or “SOW” – Schedule 1, as amended in writing by the parties from time to time.

“Term” – Section 4.1.

[// GUIDANCE: Keep definitions alphabetical. Add or delete as needed to reflect the SOW.]

3. ENGAGEMENT & SCOPE OF SERVICES

3.1 Engagement. Client hereby engages Contractor, and Contractor accepts such engagement, to provide the Services strictly as an independent contractor and not as an employee, partner, or joint venturer of Client.

3.2 Statement of Work. Contractor shall perform the Services and produce the Deliverables in accordance with the specifications, milestones, and timelines set forth in the SOW. No material change to the SOW is binding unless set forth in a written amendment signed by both parties.

3.3 Personnel. Contractor shall furnish all labor, materials, equipment, and supervision necessary to complete the Services. Contractor may engage qualified subcontractors, provided that (a) Contractor remains fully responsible for all obligations hereunder, (b) each subcontractor executes a written agreement no less protective of Client than this Agreement, and (c) subcontractor engagements do not affect Worker Classification status under Arizona or federal law.

4. TERM; TERMINATION

4.1 Term. The Term commences on the Effective Date and continues until [SPECIFY END DATE OR “completion of the Services”], unless earlier terminated under Section 4.2.

4.2 Termination Rights.
(a) Either party may terminate this Agreement for convenience on [__] days’ prior written notice.
(b) Either party may terminate immediately for cause if the other party materially breaches any provision and fails to cure within ten (10) days after written notice.
(c) Client may suspend or terminate upon Contractor’s bankruptcy, insolvency, assignment for the benefit of creditors, or cessation of business.

4.3 Effect of Termination. Upon termination, Contractor shall (i) cease all Services, (ii) deliver all completed or in-process Deliverables, and (iii) invoice Client for undisputed Services rendered through the effective date of termination. Sections 5.4, 7–13, and any other provision intended to survive shall so survive.

5. COMPENSATION & TAXES

5.1 Fees. Client shall pay Contractor [FIXED FEE / HOURLY RATE] as set out in the SOW.

5.2 Expenses. Pre-approved, reasonable, documented out-of-pocket expenses are reimbursable at cost without markup.

5.3 Invoicing & Payment Terms. Contractor shall invoice [monthly/bi-weekly/upon milestone]. Client shall pay undisputed amounts within thirty (30) days of receipt. Late payments accrue interest at the lesser of 1.0 % per month or the maximum rate permitted by law.

5.4 Taxes. Contractor is solely responsible for all federal, state, and local taxes arising from the compensation paid hereunder, including self-employment taxes. Client will report payments to Contractor on IRS Form 1099-NEC in accordance with 26 U.S.C. § 6041(a). No payroll or employment taxes shall be withheld or paid by Client.

6. PERFORMANCE STANDARDS; DELIVERABLES

6.1 Standard of Care. Contractor shall perform the Services in a timely, diligent, professional, workmanlike manner using personnel with the requisite skill and experience.

6.2 Acceptance. Deliverables shall be subject to Client’s written acceptance or rejection within [__] days after delivery. If Client reasonably rejects a Deliverable, Contractor shall promptly correct and resubmit at no additional charge.

6.3 Compliance with Law. Contractor shall comply with all applicable federal, state, and local laws, regulations, and ordinances, including, without limitation, Arizona’s workers’ compensation, occupational safety, and fair employment practices statutes.

7. REPRESENTATIONS & WARRANTIES

7.1 Mutual. Each party represents and warrants that:
(a) it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation;
(b) it has full power and authority to execute, deliver, and perform this Agreement; and
(c) this Agreement constitutes its legal, valid, and binding obligation, enforceable in accordance with its terms.

7.2 Contractor. Contractor further represents and warrants that:
(a) the Services and Deliverables will conform in all material respects to the SOW and will be free from material defects;
(b) the Deliverables will not infringe any third-party intellectual property right; and
(c) Contractor is and shall remain an independent contractor and not an employee of Client under applicable federal or Arizona law.

7.3 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

7.4 Survival. The warranties in this Section 7 survive for twelve (12) months after the later of delivery of the applicable Deliverable or completion of the Services.

8. COVENANTS & RESTRICTIONS

8.1 Non-Solicitation. During the Term and for twelve (12) months thereafter, Contractor shall not, without Client’s prior written consent, solicit for employment, hire, or contract with any employee of Client who was materially involved with the Services.

8.2 Confidentiality.
(a) “Confidential Information” means any non-public information disclosed by either party that is designated as confidential or that a reasonable person would understand to be confidential.
(b) Obligations. The receiving party shall (i) use the same degree of care it uses to protect its own confidential information (but no less than reasonable care), (ii) use Confidential Information solely for purposes of performing or receiving Services, and (iii) not disclose it except to personnel bound by like obligations.
(c) Exclusions. Confidential Information does not include information that is or becomes publicly available through no fault of the receiving party, was independently developed, or is rightfully obtained without restriction.
(d) Compelled Disclosure. The receiving party may disclose Confidential Information when legally compelled, provided it gives prompt notice (where lawful) to the disclosing party to enable it to seek protective relief.

8.3 Records & Audit. Contractor shall maintain complete and accurate books and records relating to the Services for three (3) years and permit Client (or its designee) to audit such records during normal business hours on ten (10) days’ notice, solely to verify compliance with this Agreement.

9. INSURANCE

9.1 Required Coverage. Contractor shall, at its own expense, maintain throughout the Term (and for at least two (2) years thereafter for claims-made policies):
(a) Commercial General Liability insurance with limits no less than $1,000,000 per occurrence and $2,000,000 aggregate;
(b) [Professional Liability / Errors & Omissions] insurance with limits no less than $1,000,000 per claim;
(c) Business Automobile Liability covering all owned and non-owned vehicles used in connection with the Services, with a combined single limit of $1,000,000; and
(d) Workers’ Compensation and Employers’ Liability insurance as required by applicable law, or evidence of qualified exemption under Arizona law for independent contractors.

9.2 Certificates. Upon request, Contractor shall provide Client certificates of insurance naming Client as additional insured (except for workers’ compensation).

10. INDEMNIFICATION & LIMITATION OF LIABILITY

10.1 Contractor Indemnification. Contractor shall indemnify, defend, and hold harmless Client, its Affiliates, and their respective directors, officers, employees, and agents (“Client Indemnitees”) from and against any and all claims, demands, damages, losses, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(i) Contractor’s breach of this Agreement;
(ii) bodily injury, death, or property damage caused by Contractor’s negligent or willful acts or omissions;
(iii) assertions that the Deliverables infringe any third-party intellectual property right;
(iv) Contractor’s failure to pay taxes, benefits, or other obligations as an independent contractor.

10.2 Limitation of Liability. EXCEPT FOR (a) INDEMNIFICATION OBLIGATIONS; (b) BREACHES OF CONFIDENTIALITY; OR (c) GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGES. EACH PARTY’S TOTAL LIABILITY SHALL NOT EXCEED THE FEES PAID OR PAYABLE TO CONTRACTOR UNDER THIS AGREEMENT IN THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO LIABILITY, SUBJECT TO ANY NON-WAIVABLE LIABILITY CAPS OR MINIMUMS IMPOSED BY ARIZONA LAW.

[// GUIDANCE: Confirm caps comply with A.R.S. §§ 12-2506 et seq. (comparative fault) and that no public policy violation exists for the specific Services rendered.]

11. DEFAULT; REMEDIES

11.1 Events of Default. A party is in default if it (a) materially breaches any obligation and fails to cure within the applicable notice and cure period; (b) becomes insolvent; or (c) engages in fraudulent or illegal conduct relating to the Services.

11.2 Remedies. Upon default, the non-defaulting party may, in addition to any other right or remedy:
(i) terminate this Agreement in whole or in part;
(ii) suspend performance;
(iii) pursue damages or equitable relief, including specific performance and injunction; and
(iv) recover reasonable attorneys’ fees and costs incurred in enforcement.

11.3 Cumulative Rights. All rights and remedies are cumulative and may be exercised concurrently or separately. Waiver of any default is not a waiver of any other default.

12. DISPUTE RESOLUTION

12.1 Governing Law. This Agreement is governed by and construed in accordance with the laws of the State of Arizona, without regard to its conflict-of-laws principles.

12.2 Forum Selection. Each party irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in [MARICOPA COUNTY], Arizona, for any action arising out of or relating to this Agreement, subject to Section 12.3 if arbitration is elected.

12.3 Arbitration (Optional).
(a) Either party may elect by written notice to submit any dispute (except for claims seeking injunctive relief) to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The election is irrevocable once made.
(b) The arbitration shall be held in [PHOENIX, ARIZONA] before a single neutral arbitrator.
(c) Judgment on the award may be entered in any court of competent jurisdiction.

12.4 Jury Trial Waiver. TO THE EXTENT NOT PROHIBITED BY LAW, EACH PARTY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.

12.5 Injunctive Relief. Nothing in this Section limits either party’s right to seek temporary, preliminary, or permanent injunctive relief in a court of competent jurisdiction.

13. GENERAL PROVISIONS

13.1 Assignment. Neither party may assign this Agreement without the other party’s prior written consent, except to a successor in interest by merger or asset sale, provided the assignee assumes all obligations herein. Any prohibited assignment is void.

13.2 Amendment; Waiver. No amendment or waiver is effective unless in writing and signed by the party against whom enforcement is sought. A waiver on one occasion is not a waiver of any subsequent breach.

13.3 Severability. If any provision is held invalid or unenforceable, it shall be limited or severed to the minimum extent necessary so that the remaining provisions remain in full force.

13.4 Entire Agreement. This Agreement (including its Schedules) constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior or contemporaneous oral or written agreements.

13.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original and all of which together constitute one instrument. Signatures delivered by PDF, facsimile, or secure electronic signature service are deemed original.

13.6 Notices. All notices must be in writing and delivered (i) by hand, (ii) by reputable overnight courier, or (iii) by certified mail (return receipt requested) to the addresses first set forth above (or such other address as a party may designate). Notices are effective upon delivery.

13.7 Force Majeure. Neither party is liable for failure to perform due to causes beyond its reasonable control (including acts of God, fire, flood, pandemic, strike, or governmental action), provided it uses commercially reasonable efforts to resume performance.

14. EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

[// GUIDANCE: Add notary blocks only if required by the specific transaction or Client policy.]

15. SCHEDULE 1 – STATEMENT OF WORK

1. Project Description: [DETAILED DESCRIPTION]
2. Deliverables & Milestones: [TABLE OR LIST]
3. Fee Structure: [HOURLY / FIXED PRICE / MILESTONE]
4. Key Personnel: [NAMES & ROLES]
5. Performance Benchmarks: [KPIs, SERVICE LEVELS]
6. Acceptance Criteria: [DEFINE]

16. SCHEDULE 2 – STATE-SPECIFIC WORKER CLASSIFICATION RIDER (ARIZONA)

A. Status Representation. Contractor represents that it is customarily engaged in an independently established trade, occupation, or business and satisfies the criteria for independent contractor status under applicable Arizona law and Section 23-902 of the Arizona Workers’ Compensation statutes.

B. Right to Control. Contractor retains sole and complete control over the manner and means of performing the Services, subject only to the results-oriented specifications set forth in the SOW. Nothing herein is intended, and shall not be construed, to grant Client the right to control the details of Contractor’s performance.

C. Tax Obligations. Contractor assumes exclusive responsibility for:
1. Filing and paying all federal, state, and local income, self-employment, sales, use, and other taxes arising from the compensation received;
2. Providing Client with a completed IRS Form W-9 and any state equivalent; and
3. Maintaining adequate records to substantiate all tax filings.

D. Insurance & Workers’ Compensation. Contractor acknowledges that it is not covered by Client’s workers’ compensation policy and either (i) maintains separate workers’ compensation insurance, or (ii) qualifies for and has elected an exemption under Arizona law. Contractor shall provide proof of such coverage or exemption upon Client’s request.

E. No Benefits. Contractor is not eligible for and waives any claim to overtime, health insurance, retirement benefits, paid leave, unemployment compensation, or any other employee benefit offered by Client.

F. Re-Characterization. If any governmental agency or court determines that Contractor or its Personnel are “employees” of Client, Contractor shall indemnify Client for any resulting taxes, penalties, interest, and benefits assessed, except to the extent caused by Client’s willful misconduct.

[// GUIDANCE: Review current Arizona Department of Economic Security guidelines and update paragraphs B–F as regulations evolve.]

END OF TEMPLATE