Remote Contractor Agreement: Clauses to Check Before Signing

If a company abroad has sent you an independent-contractor or consultant agreement, the document in front of you decides far more than your rate: who owns what you build, how quickly either side can walk away, and which country's courts you would end up in. This guide walks through each clause in plain language, describes what a fair version looks like, and lists the changes you can reasonably ask for before you sign.

Contractor or employee: what actually changes when you sign?

A contractor is a business of one. The US Internal Revenue Service says that if you are an independent contractor, then you are self-employed, and the deciding question is whether the company controls only the result of your work or also how it is done. The UK government's guidance says a person is self-employed if they "run their business for themselves and take responsibility for its success or failure", and that employment law does not cover self-employed people in most cases.

In practice that means no paid leave, no employer-paid health cover, no provident fund, no notice protection beyond what the contract says, and nobody deducting tax before the money reaches you. Deel's public template guide states the trade plainly: contractors don't receive statutory employee benefits and the company does not withhold taxes from their income. In return you can usually set your own hours, take several clients and charge a rate that reflects the missing benefits.

Why do foreign companies prefer this? Employing someone in India means having an Indian entity or paying a third party to be the employer; Remote's help centre describes an Employer of Record as a way to hire in a country where the company has no entity set up. A contractor agreement avoids that cost and set-up time, which is why so many first offers from smaller companies abroad arrive as consultant agreements.

Our guide to working remotely for foreign companies covers how each model changes what reaches your bank; this one stays on the contract.

Which clauses matter most, and what does a fair version look like?

Most contractor agreements follow a similar skeleton. Deel's template page lists the usual parts: the nature of the relationship, scope of work, payment terms, intellectual property, confidential information, indemnification and liability, termination, and governing law and jurisdiction. Here is what to look for in each.

Scope of work and deliverables

A fair scope names the services, the expected deliverables and how changes to scope are agreed; Deel's template describes exactly those elements. Wording that lets the company assign any task it chooses turns a contract into an open-ended obligation and makes it hard to decline extra work without extra pay. Ask for a statement of work (SOW) attached as a schedule, and a line saying new projects need a written change or a fresh SOW.

Payment terms, currency and invoicing

Check four things: the amount, the currency, how often you invoice and how long after the invoice the company pays. The agreement should also say who bears bank and conversion charges and what happens if a payment is late. A fair version names a fixed payment window, lets you pause work after a stated period of non-payment, and does not let the company hold back pay while a disagreement about deliverables is open.

Termination and notice on both sides

Read the termination clause twice: once as the company, once as yourself. Deel's template describes the usual parts: a notice period, grounds for immediate termination, and what happens to outstanding payments when the agreement ends. A fair clause gives both sides the same notice, pays for work completed up to the end date, and limits immediate termination to serious breaches.

Intellectual property and your prior work

This is the clause most people skim and most regret. WIPO, the UN agency for intellectual property, notes that a company may not legally own IP created on its behalf under a contract unless the rights are assigned, which is why companies ask for an assignment clause. What is not normal is an assignment that reaches your past work, your open-source projects or anything you build in your own time. WIPO's guidance says contracts should be clear about what the company owns and what the contractor keeps.

• Deliverables made for the client under the agreement: the company owns them, usually once they are paid for.
• Your pre-existing work, tools, libraries and templates: you keep them, and grant the client a licence to use them inside the deliverables.
• Work outside the engagement: stays yours, with no obligation to disclose it.
• Portfolio use: ask for the right to show the work once it is public, with confidential details removed.

Confidentiality

A confidentiality clause is reasonable, and WIPO's guidance expects companies to ask contractors not to disclose confidential information even after they leave. Check that it defines what counts as confidential, carves out things already public or already known to you, and ends after a stated period rather than running forever, except for genuine trade secrets.

Non-compete and non-solicit

A non-solicit, which stops you poaching the client's staff or customers for a period, is common and usually harmless. A non-compete that stops you working for any other company in the same field is a different matter for a contractor whose whole model depends on having several clients. Whether such a clause can be enforced against someone living in India depends on which country's courts the agreement points to, and that is a question for a lawyer. Never sign a restriction you are not prepared to live by. Ask to narrow it to named direct competitors and the term of the agreement, or to delete it.

Liability and indemnity

Indemnity means you promise to cover the company's losses. Deel's template describes mutual liability limitations and indemnification protecting both parties, which is the balanced version. Watch for a one-way indemnity where only you carry risk, uncapped liability, or liability for how the company uses your deliverables. A reasonable cap is often tied to the amounts paid under the agreement.

Governing law and dispute resolution

This clause names which country's or state's rules apply and where a dispute would be heard; Deel's template describes it as the legal framework and jurisdiction that governs the agreement in the event of a dispute. For someone in India, a court in Delaware or London is expensive to reach. Ask whether disputes can first go to negotiation and then mediation or online arbitration, and treat a foreign jurisdiction as a real cost you are accepting.

Equipment, expenses and the no-benefits acknowledgement

Contractors normally provide their own laptop and internet, and the IRS lists the worker's investment in tools and facilities among the facts that point to contractor status. If the company supplies devices or software, the agreement should say who pays and what you return. Expect a clause acknowledging that you receive no employee benefits and handle your own taxes; this is standard, but it also means nobody steps in if you fall ill or need leave, so price that into your rate.

What can you reasonably ask to change?

Companies that use contractors regularly expect some discussion of the agreement, and a polite, specific request in writing is normal. Rank your asks: a few that matter, not a page of redlines.

• Equal notice periods for both sides, and payment for work done up to the termination date.
• A fixed payment window after each invoice, and who bears transfer charges.
• An IP clause limited to deliverables made under the agreement, with your prior work and tools carved out and licensed, not assigned.
• A non-compete narrowed to named competitors and the term of the agreement, or removed.
• A liability cap tied to what you have been paid, and indemnities that run both ways.
• A dispute clause that starts with negotiation or mediation before any court.

Which red flags should stop you signing?

Our guide to spotting remote job scams covers fake employers; the problems below appear in genuine agreements from real companies.

• An unpaid trial period written into the contract, where you work first and are paid only if the company is satisfied. Paid trials and take-home tasks have their own guide.
• An IP assignment that covers everything you have ever made or will make, including work for other clients.
• Penalties for leaving: a sum you owe if you end the agreement, or forfeiting your last invoice if you give notice.
• One-sided termination: the company can end the agreement immediately for any reason while you are bound to a long notice period.
• Any ask to pay a deposit, buy equipment through a named vendor or pay for onboarding; genuine clients never charge you to start.
• An agreement that calls you a contractor but reads like employment: fixed hours, a manager approving leave, exclusivity, company devices and no right to decline work.

The IRS says what counts is whether the business has the right to control the details of how the work is done, and UK guidance warns that if in reality you have to do the work personally you are more likely to be a worker or an employee, whatever the contract says. If it is employment in everything but name, you carry a contractor's risks without an employee's protections, and it is fair to ask for an Employer-of-Record arrangement instead.

How is an Employer-of-Record agreement different?

An Employer of Record (EOR) is a company with an entity in your country that employs you on behalf of the foreign company. Remote's help centre explains that an employee hired through its EOR service has an employment contract with Remote's local entity in their country, while the day-to-day work is handled by the company they work for. Under its contractor product, by contrast, Remote states that the contractual relationship is strictly between the contractor and the client.

• Employer named on the document: the EOR's Indian entity, not the company you interviewed with.
• Terms: an Indian employment contract, so leave, notice and payslips look like a regular Indian job.
• Two documents: the employment contract with the EOR, and sometimes a separate assignment or policies document from the client. Read both; IP and confidentiality terms often sit in the second.
• If the client ends its relationship with the EOR, ask what happens to your employment, since the EOR is your legal employer.

Your read-through before signing, step by step

1. Read the agreement once end to end without marking anything, then again with this guide beside you, noting where each clause above sits.
2. Compare it with the job description and your email thread: rate, currency, hours and start date should match. If the role was described as a full-time job but the paper says consultant, settle that first.
3. Send one email with your proposed changes, ordered by importance, and keep the reply with the agreement.
4. Have a lawyer read any clause you still do not understand, especially IP, indemnity and non-compete, and ask how a foreign jurisdiction would affect you in practice.
5. File the signed copy, every schedule and the agreed changes with your first invoice; you will need the set for payments and for your chartered accountant.