Independent Contractor Agreement - Montana

INDEPENDENT CONTRACTOR AGREEMENT

State of Montana

Table of Contents

1. Parties
2. Recitals
3. Scope of Services
4. Term and Termination
5. Compensation and Payment
6. Independent Contractor Status
7. Tax Obligations
8. No Employee Benefits
9. Insurance
10. Intellectual Property
11. Confidentiality
12. Non-Competition and Non-Solicitation
13. Indemnification
14. Dispute Resolution
15. Montana-Specific Notices
16. General Provisions
17. Signatures

1. PARTIES

This Independent Contractor Agreement ("Agreement") is entered into as of [__/__/____] ("Effective Date") by and between:

Company/Client:
Name: [________________________________]
Address: [________________________________]
City: [________________________________] State: Montana ZIP: [____]
EIN/Tax ID: [________________________________]

Independent Contractor:
Name: [________________________________]
DBA (if applicable): [________________________________]
Address: [________________________________]
City: [________________________________] State: [____] ZIP: [____]
SSN/EIN: [________________________________]
ICEC Number (if applicable): [________________________________]

2. RECITALS

WHEREAS, Company desires to engage Contractor to perform certain services; and

WHEREAS, Contractor represents that Contractor is engaged in an independently established trade, occupation, or business and meets the criteria for independent contractor status under Montana law;

NOW, THEREFORE, in consideration of the mutual covenants herein, the Parties agree as follows:

3. SCOPE OF SERVICES

3.1. Contractor shall perform the following services ("Services"):
[________________________________]

3.2. Deliverables: [________________________________]

3.3. Contractor shall determine the manner, method, and means of performing the Services. Company may specify desired results only.

4. TERM AND TERMINATION

4.1. Term. This Agreement begins on [__/__/____] and continues through [__/__/____].

4.2. Termination for Convenience. Either Party may terminate upon [____] days' written notice.

4.3. Termination for Cause. Either Party may terminate immediately upon material breach if not cured within [____] days of notice.

4.4. Effect of Termination. Contractor shall deliver all completed work and be paid for Services satisfactorily performed through the termination date.

5. COMPENSATION AND PAYMENT

5.1. Compensation. Company shall pay Contractor:

☐ Fixed fee of $[________________________________]
☐ Hourly rate of $[________________________________] per hour
☐ Milestone-based payments per Exhibit A
☐ Other: [________________________________]

5.2. Invoicing. Contractor shall submit invoices [________________________________].

5.3. Payment Terms. Payment due within [____] days of valid invoice.

5.4. Expenses. Contractor bears all business expenses unless pre-approved in writing. Pre-approved expenses: [________________________________]

6. INDEPENDENT CONTRACTOR STATUS

6.1. Classification. Contractor is an independent contractor and not an employee of Company. This Agreement does not create an employment, agency, joint venture, or partnership relationship.

6.2. Montana Classification Criteria. MCA § 39-71-417(4)(a) states two sworn elements for an Independent Contractor Exemption Certificate. The statute does not impose a multi-factor checklist; the items below the line are contractual representations only, not statutory criteria.

The two statutory elements (MCA § 39-71-417(4)(a)):
☐ Contractor has been and will continue to be free from control or direction over the performance of Contractor's own services, both under contract and in fact (§ 39-71-417(4)(a)(i))
☐ Contractor is engaged in an independently established trade, occupation, profession, or business, and will provide sufficient documentation of that fact to the department (§ 39-71-417(4)(a)(ii))

An endorsement required for licensure as provided in MCA § 37-47-303 does not imply or constitute control (§ 39-71-417(4)(b)). The documentation used to establish an independently established business is prescribed by department rule, not by statute (§ 39-71-417(5)(a)(iv)) — consult the Department of Labor and Industry's current administrative rules and application form rather than any fixed list.

Supporting contractual representations (not statutory criteria):
☐ Contractor holds a valid Independent Contractor Exemption Certificate (ICEC) or maintains workers' compensation coverage
☐ Contractor provides their own tools, equipment, and supplies
☐ Contractor sets their own schedule and work hours
☐ Contractor has the right to hire and pay assistants
☐ Contractor is not trained by the hiring agent
☐ Contractor has an opportunity for profit or loss
☐ Contractor is not prohibited from working for others

6.3. ICEC Status. Contractor represents:

☐ Contractor holds a current ICEC issued by the Montana Department of Labor and Industry, Number: [________________________________], Expiration: [__/__/____]
☐ Contractor maintains workers' compensation insurance coverage
☐ Contractor is exempt from ICEC requirements because: [________________________________]

6.4. No Control Over Methods. Company shall not direct or control the manner in which Contractor performs Services.

7. TAX OBLIGATIONS

7.1. Contractor is solely responsible for all federal, state, and local taxes, including Montana state income taxes and self-employment taxes.

7.2. Company shall not withhold any taxes from Contractor's payments.

7.3. Company shall issue Form 1099-NEC or another information return when required by current federal law and IRS instructions.

7.4. Contractor shall provide a completed IRS Form W-9 prior to first payment.

8. NO EMPLOYEE BENEFITS

8.1. Contractor is responsible for personal benefits to the extent permitted by applicable classification and coverage law. This Agreement does not itself waive workers' compensation or unemployment rights; Section 15.2 governs the Independent Contractor Exemption Certificate and any election for personal workers' compensation coverage.

8.2. Contractor is responsible for obtaining personal insurance coverage.

9. INSURANCE

9.1. Contractor shall maintain at Contractor's expense:

☐ General liability insurance: $[________________________________] minimum
☐ Professional liability insurance: $[________________________________] minimum
☐ Workers' compensation insurance (required if Contractor has employees; optional self-election available under Mont. Code Ann. § 39-71-401)
☐ Commercial auto insurance (if applicable)

9.2. Contractor shall provide certificates of insurance upon request.

10. INTELLECTUAL PROPERTY

10.1. Work Product. All work product created under this Agreement shall be:

☐ Owned by Company as work made for hire, with full assignment
☐ Licensed to Company per: [________________________________]
☐ Owned by Contractor with perpetual non-exclusive license to Company

10.2. Pre-Existing IP. Contractor retains rights to pre-existing IP and grants Company a non-exclusive license for any incorporated into Work Product.

10.3. Assignment. Contractor assigns all rights in Work Product that do not qualify as work made for hire.

11. CONFIDENTIALITY

11.1. Definition. "Confidential Information" means all non-public information disclosed by Company, including trade secrets, business plans, client lists, and proprietary methods.

11.2. Obligations. Contractor shall maintain strict confidence, not disclose without consent, and use only for Services.

11.3. Exceptions. Information that is publicly available, previously known, independently developed, or required by law to be disclosed.

11.4. Duration. Obligations survive termination for [____] years. Trade secrets protected under the Montana Uniform Trade Secrets Act (Mont. Code Ann. § 30-14-401 et seq.).

12. NON-COMPETITION AND NON-SOLICITATION

12.1. Non-Solicitation. During the term and for [____] months after termination, Contractor shall not solicit Company's clients or employees with whom Contractor had material contact during the engagement.

12.2. Acknowledgment of Montana Law. This Agreement contains no general non-competition covenant. Section 28-2-703 of the Montana Code restricts restraints of trade, and Montana courts review partial restraints for reasonableness. Any proposed additional restriction requires separate review under that law and Wrigg v. Junkermier, 2011 MT 290, ¶ 12.

13. INDEMNIFICATION

13.1. Contractor shall indemnify, defend, and hold harmless Company from claims arising from: (a) Contractor's performance of Services; (b) breach of this Agreement; (c) Contractor's negligence or willful misconduct; (d) claims that Contractor is an employee.

13.2. Company shall indemnify Contractor from claims arising from Company's negligence or willful misconduct.

14. DISPUTE RESOLUTION

14.1. Governing Law. This Agreement is governed by Montana law.

14.2. Mediation. The Parties shall first attempt mediation in [________________________________] County, Montana.

14.3. Arbitration / Litigation.

☐ Binding arbitration under AAA rules in [________________________________], Montana.
☐ Jurisdiction in [________________________________] County District Court, Montana.

14.4. Attorneys' Fees. The prevailing party is entitled to reasonable attorneys' fees.

15. MONTANA-SPECIFIC NOTICES

15.1. Classification and Certificate Criteria. Mont. Code Ann. § 39-71-120 was repealed in 2005. To obtain an independent contractor exemption certificate under § 39-71-417(4)(a), the applicant must attest both that the applicant is free from control or direction over the services, under the contract and in fact, and that the applicant operates an independently established trade, occupation, profession, or business. Freedom from control alone does not meet these certificate criteria. The parties' label in this Agreement does not establish statutory status; the actual working relationship and certificate status govern under applicable law.

15.2. ICEC Requirement. Under MCA § 39-71-417(1)(a)(i), a person who regularly and customarily performs services at a location other than the person's own fixed business location shall apply to the department for an Independent Contractor Exemption Certificate unless the person has elected to be bound personally and individually by compensation plan No. 1, 2, or 3. An officer or manager exempt under § 39-71-401(2)(r)(iii) or (2)(r)(iv) may apply but is not required to (§ 39-71-417(1)(a)(ii)). A "person" for this purpose means a sole proprietor, a working member of a partnership or limited liability partnership, a working member of a member-managed limited liability company, or a manager of a manager-managed limited liability company engaged in the work of the construction industry as defined in § 39-71-116 (§ 39-71-417(1)(c)). A person who receives a certificate is not required to obtain a personal workers' compensation insurance policy (§ 39-71-417(1)(b)). Under MCA § 39-71-417(7)(a), when the department approves an application and the person is working under the certificate, the holder's status is conclusively presumed to be that of an independent contractor — not merely rebuttably presumed. The conclusive presumption applies only where the person is performing work in the trade, business, occupation, or profession listed on the certificate and the hiring agent and the holder have no written or oral agreement that the holder's status with respect to that hiring agent is that of an employee (§ 39-71-417(7)(c)). A holder has waived all rights and benefits under the Workers' Compensation Act and is precluded from obtaining benefits unless the holder has elected to be bound personally and individually by compensation plan No. 1, 2, or 3 (§ 39-71-417(7)(b)). A certificate remains in effect for 2 years unless suspended or revoked under § 39-71-418 or canceled by the independent contractor (§ 39-71-417(8)). Separately, a person without a certificate is rebuttably presumed to be an independent contractor in the three narrow situations listed in § 39-71-417(7)(d). The department may suspend a certificate where the employing unit exerts or retains a right of control causing the holder to violate § 39-71-417(4), and may revoke it for the grounds listed in § 39-71-418(2). The ICEC application requires an affidavit under Mont. Admin. R. 24.35.112 and a fee under Mont. Admin. R. 24.35.121.

15.3. Uninsured Employer Liability. If misclassification leaves an employer without required workers' compensation coverage, the Department may assess a penalty of up to twice the premium that would have been paid on the relevant payroll, or $200, whichever is greater. The uninsured employers fund also collects from that employer the benefits it pays or will pay for an injured employee. Mont. Code Ann. § 39-71-504(1)(a)-(b).

15.4. Non-Compete Restrictions. Mont. Code Ann. § 28-2-703 voids restraints of trade to the extent stated there, subject to the exceptions in §§ 28-2-704 and 28-2-705. Montana courts void full restraints absent an exception and review partial restraints for reasonableness. Wrigg v. Junkermier, 2011 MT 290, ¶¶ 11–12. A non-solicitation clause may itself require review if it restrains trade.

15.5. Wrongful Discharge. Montana's Wrongful Discharge from Employment Act (Mont. Code Ann. § 39-2-901 et seq.) generally applies to employees, not independent contractors. Proper classification is critical.

16. GENERAL PROVISIONS

16.1. Entire Agreement. This Agreement is the complete agreement.

16.2. Amendments. Must be in writing signed by both Parties.

16.3. Severability. Invalid provisions severed without affecting the remainder.

16.4. Notices. Written notices to addresses above.

16.5. Assignment. Not assignable without written consent.

16.6. Waiver. No waiver constitutes future waiver.

16.7. Counterparts. May be executed in counterparts.

17. SIGNATURES

IN WITNESS WHEREOF, the Parties execute this Agreement as of the Effective Date.

COMPANY/CLIENT:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

INDEPENDENT CONTRACTOR:

Signature: [________________________________]
Printed Name: [________________________________]
Title/DBA: [________________________________]
Date: [__/__/____]

EXHIBIT A — STATEMENT OF WORK

[________________________________]

Sources and References:

• MCA § 39-71-417 — Independent contractor certification
• MCA § 39-71-418 — Suspension or revocation of ICEC
• MCA § 39-71-401 — Employments covered and exemptions
• MCA § 39-71-504 — Uninsured employer fund
• Mont. Admin. R. 24.35.302 — Evidence of Control
• Montana ICEC Application — Dept. of Labor & Industry
• Mont. Code Ann. § 28-2-703 — Restraints of trade
• Wrigg opinion