Contractor Operating Agreement for the United Kingdom

Contractor Operating Agreement Template for England and Wales

A Contractor Operating Agreement is a legally binding document governed by the laws of England and Wales that establishes the terms and conditions under which a contractor provides services to a company. It defines the scope of work, payment terms, obligations, and responsibilities of both parties while ensuring compliance with relevant legislation including IR35 and employment laws. The agreement maintains clear distinction between contractor and employee status while protecting both parties' interests.

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What is a Contractor Operating Agreement?

The Contractor Operating Agreement is essential for businesses in England and Wales engaging external service providers. This document establishes the framework for contractor engagement while ensuring compliance with UK legislation, particularly IR35 regulations. It covers critical aspects including service scope, payment terms, intellectual property rights, and liability provisions. The agreement is designed to protect both parties' interests while maintaining clear contractor status distinction from employment relationships.

What sections should be included in a Contractor Operating Agreement?

1. Parties: Identifies and defines the contracting parties

2. Background: Sets out context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement

4. Services: Details the scope of services to be provided

5. Payment Terms: Specifies fees, payment schedule, and invoicing procedures

6. Term and Termination: Duration of agreement and termination provisions

7. Contractor Status: Confirms independent contractor relationship and compliance with IR35

What sections are optional to include in a Contractor Operating Agreement?

1. Intellectual Property Rights: IP ownership and transfer provisions - used when contractor creates or uses intellectual property

2. Equipment and Resources: Provisions regarding tools and resources - used when specific equipment or resources are required

3. Insurance Requirements: Required insurance coverage and liability provisions - used when specific insurance requirements exist

4. Confidentiality: Protection of confidential information and trade secrets - used when sensitive information is shared

What schedules should be included in a Contractor Operating Agreement?

1. Schedule 1 - Services Description: Detailed description of services to be provided

2. Schedule 2 - Fee Schedule: Detailed breakdown of fees and payment terms

3. Schedule 3 - Service Levels: Performance metrics and standards

4. Appendix A - Required Qualifications: List of required certifications or qualifications

5. Appendix B - Policies and Procedures: Relevant company policies applying to contractor

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Standard LLC Agreement

An England & Wales legal document outlining the operational framework for a limited liability company.

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What is a Contractor Operating Agreement?

What sections should be included in a Contractor Operating Agreement?

What sections are optional to include in a Contractor Operating Agreement?

What schedules should be included in a Contractor Operating Agreement?

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