Hybrid Contractor Employee Probation Agreement (UK)
Hybrid contractor-to-employee probation agreement for UK services
HYBRID CONTRACTOR-TO-EMPLOYEE PROBATION AGREEMENT
Note: Purpose of this template: this Agreement engages an individual (or a personal service company) as a self-employed Contractor for a fixed Probation Period, during which the parties evaluate whether to convert the engagement to employment at the end of that period. It combines an arm's-length contractor framework with hybrid working arrangements (split between the Contractor's home and the Company's premises). The conversion to employment is optional — neither party is obliged to convert at the end of the Probation Period.
Note: B2B / non-consumer use only: this template is designed for engagements between a Company and an individual or PSC acting in the course of their business. It is not a consumer contract — the Consumer Rights Act 2015 unfair-terms regime under sections 62 to 65 does not apply to a contract negotiated between businesses, but if there is any possibility that the Contractor is engaged in a personal capacity outside their trade or profession, take legal advice before using this template.
Note: Conversion to employment — important caveat: if the parties later agree to convert, a separate written employment contract complying with Employment Rights Act 1996 section 1 is required. This template does not contain employee-grade provisions (statutory sick pay, holiday entitlement under the Working Time Regulations 1998, pension auto-enrolment, statutory dismissal protections) — those belong in the post-conversion employment contract, not here.
PARTIES
(1) [full legal name of the company], a company incorporated and registered in England and Wales with company number [companies house registration number of the company], whose registered office is at [registered office address of the company] (the "Company"); and
(2) [full legal name of the contractor] [, a company incorporated and registered in England and Wales with company number [companies house registration number of the contractor (if psc)], whose registered office is at [registered office address of the contractor (if psc)]] [of [home address of the contractor (if individual)]] (the "Contractor").
Note: Entity type: complete the bracketed company-formation details if the Contractor is providing services through a personal service company (PSC). If the Contractor is engaged as an individual sole trader, delete the company-formation block and complete the home address block instead. Whether a PSC is interposed is relevant to the IR35 analysis in Clause 2 but does not by itself determine whether the engagement is inside or outside the off-payroll working rules.
BACKGROUND
(A) The Company wishes to engage the Contractor on a self-employed basis to provide the Services during the Probation Period on the terms set out in this Agreement.
(B) The parties may (but are not obliged to) agree at the end of the Probation Period to convert the engagement to an employment relationship on terms to be agreed at that time.
(C) During the Probation Period the Contractor is engaged as an independent contractor. This Agreement does not create any employment, worker, partnership, or agency relationship between the parties.
AGREED TERMS
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the following words have the following meanings:
1.2 "Background IPR" has the meaning given in Clause 10.4.
1.3 "Business Day" means any day other than a Saturday, Sunday, or public holiday in England and Wales.
1.4 "Company Property" means the items of equipment, devices, software, accounts, and other property listed in Schedule 2, Part C as supplied by the Company to the Contractor for use in performing the Services.
1.5 "Confidential Information" means any information disclosed by one party to the other in connection with this Agreement that is either designated as confidential or that a reasonable person would regard as confidential given its nature and the circumstances of disclosure, but excluding information falling within Clause 11.2.
1.6 "Conversion Date" means the date (if any) on which the engagement converts to an employment relationship, as agreed by the parties in writing under Clause 3.
1.7 "Deliverables" means all documents, reports, software, designs, materials, and other outputs produced by the Contractor in performing the Services, as described in Schedule 2.
1.8 "Effective Date" means the date set out in Schedule 1, Part A.
1.9 "Fees" means the fees payable to the Contractor as set out in Schedule 1, Part B and Clause 9.
1.10 "Home" means the Contractor's home address recorded in Schedule 1, Part A, as updated from time to time under Clause 5.5.
1.11 "Intellectual Property Rights" or "IPR" means all patents, copyright and related rights, moral rights, trade marks, trade names, domain names, rights in designs, database rights, rights in confidential information (including know-how and trade secrets), and all other intellectual property rights of any kind, whether registered or unregistered, and including all applications and rights to apply for and be granted such rights, anywhere in the world.
1.12 "Personal Data" has the meaning given to it in the UK General Data Protection Regulation ("UK GDPR") as retained in UK law by the European Union (Withdrawal) Act 2018, and the Data Protection Act 2018 ("DPA 2018").
1.13 "Probation Period" means the period beginning on the Effective Date and ending on the date set out in Schedule 1, Part A, unless terminated earlier under Clause 15 or extended by the parties in writing.
1.14 "Services" means the services described in Schedule 2, as the parties may agree to amend in writing from time to time.
1.15 "Working Locations" means the Home and the Company's premises identified in Schedule 1, Part A, together with any other location agreed in writing for the performance of the Services.
1.16 In this Agreement, unless the context requires otherwise:
1.16.1 (a) a reference to a statute or statutory provision includes any subordinate legislation made under it and any subsequent amendment or re-enactment;
1.16.2 (b) clause and schedule headings are for ease of reference only and shall not affect interpretation;
1.16.3 (c) "including", "in particular", and similar expressions are illustrative and shall not limit the words preceding them;
1.16.4 (d) a reference to "writing" or "written" includes email unless the context requires otherwise; and
1.16.5 (e) a reference to "days" means calendar days unless "Business Days" is specified.
2. ENGAGEMENT, PROBATION PERIOD AND STATUS
2.1 Engagement: the Company engages the Contractor, and the Contractor agrees to provide the Services, during the Probation Period on the terms of this Agreement.
2.2 Independent contractor: the Contractor is engaged as a self-employed independent contractor. Nothing in this Agreement creates or is intended to create an employment relationship under the Employment Rights Act 1996, a worker relationship under the Working Time Regulations 1998 (SI 1998/1833) or the National Minimum Wage Act 1998, or a partnership or agency relationship.
2.3 Tax and National Insurance: the Contractor is solely responsible for: (a) accounting to HM Revenue & Customs ('HMRC') for all income tax and Class 2 / Class 4 National Insurance contributions arising from the Fees (or, if the Contractor operates through a company, corporation tax and dividend taxation as applicable); (b) registering for and accounting for VAT if required to do so; and (c) maintaining its own insurances. The off-payroll working provisions in Clauses 2.5 to 2.10 may modify these obligations where they apply.
2.4 No employment benefits: during the Probation Period the Contractor is not entitled to any benefits the Company provides to its employees, including holiday pay under the Working Time Regulations 1998, statutory sick pay, pension contributions, or notice pay beyond that set out in Clause 15.
Note: IR35 / off-payroll working overview: 'IR35' is the informal name for the off-payroll working rules in Chapters 8 and 10 of the Income Tax (Earnings and Pensions) Act 2003 ('ITEPA 2003'). The rules exist to ensure that a person who would, in substance, be an employee if engaged directly pays broadly the same tax as an employee, even if they provide services through an intermediary (such as a personal service company). The three primary status factors are: (i) substitution — can the Contractor send a suitably qualified substitute?; (ii) control — does the Company dictate how, where, and when the work is done?; and (iii) mutuality of obligation — is there an ongoing obligation to offer and accept work? HMRC and the courts examine the reality of the working arrangement, not just the contract label.
Note: Use Option A (Right of Substitution) where possible. A genuine right of substitution is one of the strongest indicators of self-employment. The right must be real — if the Company would, in practice, always refuse a substitute, an employment tribunal or HMRC may disregard the clause. Use Option B (Personal Performance) only where personal service is genuinely essential — for example, a named individual engaged for specific creative or technical expertise. Choosing Option B significantly increases IR35 risk.
2.5 Substitution — choose one option and delete the other:
Option A — Right of Substitution: the Contractor may provide a suitably qualified substitute to perform all or part of the Services, subject to the Company's prior written approval (not to be unreasonably withheld or delayed). The Contractor shall remain responsible for: (i) paying the substitute; and (ii) ensuring the substitute complies with obligations equivalent to those imposed on the Contractor under Clauses 10, 11, and 12 of this Agreement.
Option B — Personal Performance Required: the Services shall be performed personally by [full name of the individual performing the services], and the Contractor may not sub-contract or provide a substitute without the Company's prior written consent.
2.6 IR35 — small Company (Chapter 8): if the Company qualifies as 'small' for the relevant tax year under section 60A ITEPA 2003 — broadly, satisfying at least two of: (a) annual turnover not more than £15 million; (b) balance sheet total not more than £7.5 million; (c) not more than 50 employees — the off-payroll working rules in Chapter 10 ITEPA 2003 do not apply to this engagement, and IR35 responsibility (where the Contractor is engaged via a PSC) rests with the Contractor's intermediary under Chapter 8.
Note: These small-company thresholds apply for tax years beginning on or after 6 April 2026 (verify annually — thresholds are subject to statutory instrument review). If the Company is part of a larger group, the small-company test must be applied at group level; a subsidiary that appears small standalone may be part of a medium or large group, in which case Chapter 10 applies regardless.
2.7 IR35 — medium/large Company or public authority (Chapter 10): if the Company does not qualify as 'small' under Clause 2.6, or is a public authority, Chapter 10 ITEPA 2003 applies and the Company shall: (a) determine whether the off-payroll working rules apply to this engagement, taking reasonable care; (b) issue a Status Determination Statement complying with section 61NA ITEPA 2003 (an 'SDS') setting out the determination and its reasons to the Contractor (and to any party with whom the Company contracts in the supply chain) before the Services commence; (c) establish and operate a client-led status disagreement process in accordance with section 61T ITEPA 2003, including responding to any disagreement within the statutory deadline; and (d) if the determination is 'inside Chapter 10', ensure the fee-payer in the chain operates PAYE income tax and National Insurance deductions on payments to the Contractor.
Note: The client-led status disagreement process under section 61T ITEPA 2003 is mandatory and is commonly omitted from contracts. The Company must respond to a disagreement within 45 days with reasons. A failure to respond results in the Company being treated as the fee-payer responsible for PAYE / NIC for the period of non-compliance. HMRC's Check Employment Status for Tax (CEST) tool is a useful starting point but is not legally binding.
2.8 PAYE/NIC withholding: if an 'inside Chapter 10' determination is made under Clause 2.7, any obligation in this Agreement to pay the Fees gross is modified to the extent required to permit the fee-payer to make lawful deductions of income tax and National Insurance contributions. A deduction made in compliance with Chapter 10 ITEPA 2003 shall not constitute a breach of this Agreement.
2.9 Material change notification: each party shall promptly notify the other if the working practices, degree of control, substitution arrangements, or exclusivity applicable to this engagement change materially, so that the employment status assessment may be reconsidered and (where Chapter 10 applies) a revised SDS issued.
2.10 No warranty as to status: neither party warrants that this engagement is or will remain outside the off-payroll working rules. Each party is responsible for obtaining its own independent tax and legal advice on its obligations.
2.11 Other engagements: the Contractor may provide services to other clients during the Probation Period, provided doing so does not breach Clause 11 (Confidentiality), Clause 10 (Intellectual Property), or any exclusivity restrictions recorded in Schedule 1, Part B.
3. CONVERSION TO EMPLOYMENT
3.1 Review meeting: not later than [number of weeks for conversion review meeting before end of probation period] weeks before the end of the Probation Period, the parties shall meet (in person or by video call) to discuss in good faith whether to convert the engagement to employment, and on what terms.
3.2 No obligation to convert: nothing in this Agreement obliges either party to agree to convert the engagement to employment, to make or accept an offer of employment, or to negotiate any specific terms. This Agreement is not a pre-contractual commitment to employ the Contractor.
3.3 Effect of agreed conversion: if the parties agree in writing to convert the engagement to employment, then:
3.3.1 (a) employment shall commence on the Conversion Date stated in that written agreement;
3.3.2 (b) the parties shall enter into a separate written employment contract that includes a written statement of particulars complying with section 1 of the Employment Rights Act 1996;
3.3.3 (c) this Agreement shall terminate automatically on the Conversion Date, save that Clauses 1, 10, 11, 12, 14, 16, and 17 shall survive; and
3.3.4 (d) the period served by the Contractor under this Agreement does not, by virtue of this Agreement alone, count towards continuity of employment for the purposes of Part XIV of the Employment Rights Act 1996. Continuity is fact-sensitive and will only arise if the separate employment contract expressly provides for it (or if the statutory continuity rules in section 218 of that Act otherwise apply on the facts).
Note: Continuity of employment: whether self-employed contractor service can count towards continuous employment under section 218 ERA 1996 is fact-specific and contested. The default position is that contractor service does not count. If you intend to credit the Probation Period as continuous employment (which affects unfair dismissal qualifying service, statutory redundancy entitlement, and statutory notice), say so expressly in the post-conversion employment contract — and take employment law advice before doing so, because crediting prior service has knock-on consequences.
3.4 Effect if conversion is not agreed: if the parties do not agree in writing to convert the engagement, this Agreement expires at the end of the Probation Period and the Company's only outstanding obligation is to pay all Fees properly earned and invoiced up to that date in accordance with Clause 9.
4. SERVICES
4.1 Performance standard: the Contractor shall provide the Services to the Company with reasonable skill and care, to the standard of a competent professional experienced in the relevant field, and in accordance with any specification, standards, or requirements set out in Schedule 2.
4.2 Progress and instructions: the Contractor shall: (a) keep the Company's nominated contact (identified in Schedule 1, Part B) reasonably informed of progress; (b) promptly notify the Company of any actual or likely delay or issue affecting delivery of the Services or any Deliverable; and (c) comply with any reasonable instructions given by the Company's nominated contact in connection with the Services.
Note: Clause 4.2(c) permits the Company to give reasonable instructions about the outcome of the Services. This is standard in a services agreement and does not, by itself, convert the relationship into employment. The IR35 status factors focus on control over how the work is done (not merely what is to be delivered), personal service, and mutuality of obligation. Outcome-based requirements carry lower misclassification risk than time-and-attendance requirements.
4.3 Time: time is not of the essence in relation to delivery of the Services and Deliverables, unless Schedule 2 expressly specifies otherwise for a particular Deliverable or milestone.
4.4 Additional Services: if the Company requests services outside the scope described in Schedule 2 ('Additional Services'), the parties shall agree the scope, deliverables, and additional Fees for those Additional Services in writing before the Contractor begins performing them.
5. PLACE OF WORK: HYBRID WORKING
5.1 Hybrid working: the Contractor shall provide the Services from the Working Locations on the split set out in Schedule 1, Part B (the 'Hybrid Pattern'). The Hybrid Pattern is indicative and may be adjusted by agreement between the Contractor and the Company's nominated contact to accommodate the needs of the engagement.
Note: Place of work — hybrid arrangement: this Agreement assumes a hybrid working pattern in which the Contractor splits time between Home and the Company's premises. If the engagement is fully remote, delete the Company premises entries from the Working Locations in Schedule 1, Part A. If the engagement is fully on-site, this template is not the right starting point — use a standard contractor agreement instead. Mandatory on-site attendance and fixed attendance days both increase IR35 risk; consider whether genuine business need requires on-site presence at all.
5.2 Other working locations: from time to time the Contractor may be requested to work at, or attend, locations other than the Working Locations (for example, client sites, training, conferences, or off-sites) for the proper performance of the Services. The Company shall give reasonable notice and shall reimburse reasonable, pre-approved travel expenses in accordance with Clause 9.5.
5.3 Right to require workplace-based working: the Company may, on giving the Contractor [number of weeks of notice for reverting to workplace-based working] weeks' written notice, require the Contractor to work primarily from the Company's premises if: (a) the Hybrid Pattern is materially failing to deliver the Services to the standard required; or (b) operational, regulatory, or supervisory requirements of the Company's business make Home-based working unsuitable. The Contractor shall, on receiving such notice, attend the Company's premises in accordance with the revised pattern set out in the notice.
Note: The right to revert to workplace-based working under Clause 5.3 is subject to (i) employment-status considerations (excessive control reinforces an employment finding under IR35 and at common law), (ii) the implied duty of mutual trust and confidence (relevant if the Contractor converts to employment under Clause 3), and (iii) the Equality Act 2010 indirect-discrimination framework (a blanket return-to-office requirement may have a disproportionate effect on, for example, parents with childcare responsibilities, or disabled persons). Use this clause for genuine operational reasons, not arbitrarily; document the reasons in writing.
5.4 Working from outside the UK: the Contractor shall not provide the Services from a location outside the United Kingdom for any period exceeding [maximum number of days working from outside the uk] days in any rolling 12-month period without the Company's prior written consent. Working from outside the UK may give rise to overseas tax, social security, immigration, and data protection obligations and, for that reason, requires the Company's specific assessment.
5.5 Change of Home address: the Contractor shall give the Company at least [notice period for change of contractor home address] Business Days' written notice of any planned change to the Home address, to permit a fresh health and safety assessment under Clause 7 and for the Company to update its records.
5.6 Covenants and insurance restrictions: the Contractor confirms that providing the Services from the Home does not breach any covenant, mortgage condition, lease, tenancy, or insurance policy applicable to the Home. Any consents required from a landlord, mortgagee, or insurer are the Contractor's responsibility to obtain and maintain.
6. HOURS OF WORK AND REST BREAKS
6.1 Indicative working pattern: the Contractor shall provide the Services for an indicative [indicative number of days or hours per week] per week. This is indicative only — the Company does not guarantee a minimum volume of work, and the Contractor is not obliged to accept work beyond the agreed scope of the Services.
Note: Specifying a guaranteed minimum number of days or hours per week creates mutuality of obligation, which is a strong indicator of employment for IR35 and common-law status purposes. Use 'up to' or 'indicative' framing and avoid fixed working schedules where possible. Outcome-based delivery commitments are preferable.
6.2 Availability windows: when working from any Working Location, the Contractor shall be reasonably available for collaboration, meetings, and contact during the core hours stated in Schedule 1, Part B, subject to any pre-agreed exceptions notified to the Company's nominated contact.
6.3 Rest breaks: the Contractor is responsible for managing their own working time and taking adequate rest breaks. Where the Contractor would be classified as a worker for the purposes of the Working Time Regulations 1998 (SI 1998/1833), the rest entitlements in regulations 10 to 12 of those regulations apply (broadly: an uninterrupted rest break of at least 20 minutes when working more than six hours in a day; a daily rest period of 11 consecutive hours; and a weekly rest period of 24 hours).
Note: The Working Time Regulations 1998 apply to 'workers' (a category broader than employees). Even a genuinely self-employed contractor may be a 'worker' for working-time purposes if the Company is the dominant party and the Contractor has limited business autonomy. Where the rest provisions apply, they cannot be contracted out of (other than via the limited derogations in the Regulations). Treat Clause 6.3 as a safety net rather than a status concession.
7. HEALTH AND SAFETY
7.1 Risk assessment: the Contractor shall: (a) cooperate with the Company's risk assessments of the Working Locations conducted in accordance with regulation 3 of the Management of Health and Safety at Work Regulations 1999 (SI 1999/3242); (b) complete any health and safety questionnaires the Company may issue from time to time; and (c) implement reasonable measures recommended by the Company to address risks identified by an assessment.
7.2 Display screen equipment: where the Contractor uses display screen equipment in providing the Services, both parties shall comply with their respective obligations under the Health and Safety (Display Screen Equipment) Regulations 1992 (SI 1992/2792), including identifying and reducing health and safety risks and ensuring the workstation meets the statutory requirements.
7.3 Reporting accidents: the Contractor shall report to the Company's nominated contact, without undue delay, any work-related accident, dangerous occurrence, or injury sustained while performing the Services, in accordance with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (SI 2013/1471) where applicable.
Note: Health and safety duties under the Health and Safety at Work etc Act 1974 section 2(1) extend, so far as is reasonably practicable, to homeworkers and hybrid workers. The Company should carry out a documented risk assessment of the Home workspace before the Services begin (and on each material change to the Home or the Services), and should ensure that any equipment provided complies with the Provision and Use of Work Equipment Regulations 1998 (SI 1998/2306). The Company's employer's liability insurance should be checked to confirm it extends to the Contractor's Home; standard Public Liability or Professional Indemnity policies do not always do so.
8. EQUIPMENT, INSURANCE AND RIGHT TO ENTER
8.1 Provision of Company Property: the Company may provide the Contractor, for the sole purpose of performing the Services, with the items of Company Property listed in Schedule 2, Part C. Title to the Company Property remains with the Company at all times. The Contractor shall: (a) use the Company Property only for the Services; (b) not permit any third party (including any household member) to use the Company Property; and (c) take reasonable care of the Company Property.
Note: Provision of equipment and IR35: providing the Contractor with Company equipment is a factor that moves the analysis toward employment. Where possible — particularly where Option A (Right of Substitution) is selected in Clause 2.5 — the Contractor should use their own equipment. Where the Contractor must use Company equipment for security, regulatory, or system-integration reasons, document the genuine business reason in the deal file. Note also: providing a personal-use computer to an individual may give rise to a benefit-in-kind charge; mobile phones provided to the individual are exempt under section 319 ITEPA 2003 but provision to household members is taxable.
8.2 Maintenance and damage: the Company shall install, service, and maintain the Company Property, as necessary, at its own cost. The Contractor shall promptly report any damage to or malfunction of the Company Property and shall be responsible for any damage that goes beyond ordinary wear and tear.
8.3 Insurance for Company Property: the Company shall be responsible for taking out and maintaining a valid policy of insurance covering the Company Property against fire, theft, loss, and damage throughout the Probation Period. The Contractor shall not, by any act or omission, invalidate that insurance, and shall comply with any reasonable insurer requirements notified to them.
8.4 Contractor-provided equipment: the Company is not liable for any loss, damage, or injury arising from equipment that the Contractor uses but the Company has not provided. The Contractor remains responsible for ensuring that any such equipment is fit for purpose and adequately insured.
Note: Use either Option A or Option B for Clause 8.5 (Contractor's professional indemnity cover).
Note: Use Option A where the Services involve professional advice, design, code, or other deliverables on which the Company will rely commercially — PI cover gives the Company a real source of recovery if Clause 14's liability cap is reached. Use Option B for low-value or low-risk engagements where requiring PI cover is disproportionate; many freelance contractors do not carry PI insurance, and a mandatory requirement may shrink the talent pool unnecessarily. Common SME-level PI limits in the UK are £1 million to £5 million per claim, depending on risk profile.
8.5 Contractor's professional indemnity insurance — choose one option and delete the other:
Option A — Professional Indemnity Cover Required: the Contractor shall, throughout the Probation Period and for [number of years of run-off pi cover required after probation period] years afterwards, maintain professional indemnity insurance with a reputable insurer for not less than [minimum professional indemnity cover per claim or per year] per claim or per year. The Contractor shall provide a copy of the policy schedule on request and on each renewal.
Option B — No Mandatory Professional Indemnity Cover: the Company does not require the Contractor to maintain professional indemnity insurance. The Contractor remains responsible for assessing the appropriate level of insurance for the Contractor's own business risk.
8.6 Right to enter the Home: the Contractor consents to the Company's representatives, on giving reasonable prior notice (and at reasonable times), entering the Home for the limited purposes of: (a) installing, inspecting, replacing, repairing, maintaining, or servicing the Company Property; (b) carrying out a health and safety risk assessment under Clause 7; or (c) recovering the Company Property at or after the end of the Probation Period. The Contractor shall procure any consent required from any owner or other occupier of the Home for the purpose of this Clause 8.6.
Note: Right of access to the Home is sensitive: the Company has no automatic right of entry, and the Contractor's consent in this clause is necessary. If the Home is rented or shared with others, the Contractor must obtain the relevant landlord's or co-occupier's permission. Note that under section 1 of the Computer Misuse Act 1990, the Company has no right to access the Contractor's personal computer system without consent or a court order — Clause 8.6 covers physical entry only, not remote computer access.
9. FEES AND PAYMENT
Note: Use either Option A or Option B for Clause 9.1 (fee structure).
Note: Use Option A (fixed monthly retainer) where the scope is broadly predictable and both parties want payment certainty. A fixed retainer paid regardless of output increases mutuality of obligation and may make the engagement look more employment-like for IR35 purposes — pair it with a clear minimum-deliverables expectation in Schedule 2. Use Option B (time and materials or milestones) where scope is variable; outcome-based or time-recorded payment is more consistent with a genuinely arm's-length contractor engagement and reduces IR35 risk.
9.1 Fee structure — choose one option and delete the other:
Option A — Fixed Monthly Retainer: the Company shall pay the Contractor a monthly retainer of [monthly retainer amount] (excluding VAT, if applicable), in advance on the [day of the month for retainer payment] of each calendar month. The retainer covers up to [days or hours covered by retainer per month] days or hours per month; additional time shall be charged at [additional time rate per day or hour] per day or hour and invoiced separately.
Option B — Time and Materials or Milestones: the Company shall pay the Contractor at the rate of [day rate or hourly rate] per [day or hour basis for time-and-materials rate], or at the milestone amounts set out in Schedule 2. The Contractor shall submit time records or milestone confirmations on a [frequency of time or milestone records] basis. [The parties agree a maximum spend of [maximum spend cap if used under option b] per [period for maximum spend cap under option b] without the Company's prior written approval.]
9.2 Invoicing and payment: the Contractor shall submit invoices [invoicing frequency: monthly in arrears or on completion of agreed milestones], and the Company shall pay each valid, undisputed invoice within [payment period in days from receipt of invoice] days of receipt. Invoices shall be sent to [invoice contact email address].
Note: 30 days is the standard payment period in UK B2B commercial practice and is also the statutory default under the Late Payment of Commercial Debts (Interest) Act 1998. 14 days is common for smaller or freelance engagements. Payment terms exceeding 60 days in B2B contracts must not be 'grossly unfair' to the creditor under the Late Payment of Commercial Debts Regulations 2013. Market-standard language: 'within 30 days of receipt of a valid invoice'.
9.3 VAT: all Fees are stated [vat treatment: exclusive or inclusive of vat] of VAT. Where VAT is chargeable, the Company shall pay the applicable VAT in addition to the Fees on receipt of a valid VAT invoice from the Contractor.
9.4 Late payment: if the Company fails to pay any undisputed amount by the due date, the Contractor may charge interest on the overdue amount at a rate of 8 percentage points per annum above the official dealing rate (being the Bank of England official dealing rate set on the preceding 30 June or 31 December, in accordance with article 4 of the Late Payment of Commercial Debts Regulations 2002 (SI 2002/1675)), calculated daily from the day after the payment due date, pursuant to the Late Payment of Commercial Debts (Interest) Act 1998. In addition, the Contractor is entitled to a fixed compensation charge per late invoice and reasonable recovery costs in accordance with the Late Payment of Commercial Debts Regulations 2002.
Note: The Late Payment of Commercial Debts (Interest) Act 1998 automatically implies a right to statutory interest on late B2B payments. The current rate formula is set by SI 2002/1675 (which revoked the earlier SI 1998/2765) as 8 percentage points above the 'official dealing rate'. The reference rate is fixed twice yearly — on 30 June (applying 1 July to 31 December) and 31 December (applying 1 January to 30 June) — it is not a continuously floating rate. The right cannot be contractually excluded; it can only be replaced if the contract provides a 'substantial remedy' under section 8 of the 1998 Act. Fixed compensation charges per late invoice are £40, £70, or £100 depending on the size of the debt. Pay on time, dispute promptly and in writing, and pay any undisputed portion.
9.5 Expenses: the Company shall reimburse the Contractor for reasonable, pre-approved out-of-pocket expenses properly incurred in performing the Services, provided the Contractor submits receipts or other evidence of expenditure within [expense claim submission period in days] days. The Company's prior written approval is required for any single expense exceeding [single expense approval threshold amount]. The Company shall not reimburse the Contractor's ordinary travel costs between the Home and the Company's premises in [city or region of the companys premises for ordinary travel exclusion].
10. INTELLECTUAL PROPERTY
Note: IP ownership — critical decision: under section 11(1) of the Copyright, Designs and Patents Act 1988 ('CDPA 1988'), the author of a copyright work is the first owner of copyright in it. Section 11(2) makes an exception where the work is created by an employee in the course of employment — but during the Probation Period the Contractor is engaged on a self-employed basis, so the s.11(2) exception does NOT apply. Without an express written assignment, the Contractor (not the Company) will own copyright in any Deliverables created during the Probation Period — even after the engagement converts to employment under Clause 3, copyright created before the Conversion Date does not retrospectively transfer. Choose Option A (full assignment) for bespoke deliverables; Option B (licence) only where the Contractor genuinely uses proprietary frameworks or tools that they cannot assign.
Note: Use either Option A or Option B for Clause 10.1.
Note: Use Option A where the Company commissions bespoke output — software, designs, brand materials, written content — and needs to own it outright. Ownership matters if the Company intends to register the IP, raise investment, or prevent the Contractor from reusing the same work for a competitor. Use Option B sparingly: under a licence-only structure, if the Contractor seeks to revoke or contest the licence the Company's ability to use the Deliverables may be at risk.
10.1 IP ownership — choose one option and delete the other:
Option A — Full Assignment to Company: the Contractor hereby assigns to the Company, with full title guarantee, by way of present and future assignment, all Intellectual Property Rights in and to the Deliverables created under this Agreement, with effect from the moment of creation. This assignment is worldwide and covers all present and future IPR for the full duration of those rights. The Contractor shall, at the Company's reasonable cost and request, promptly execute all further documents and take all steps reasonably required to perfect or record this assignment.
Option B — Licence Only (Contractor Retains Ownership): the Contractor retains ownership of all Intellectual Property Rights in the Deliverables. The Contractor grants the Company an exclusive [or, if the parties agree: non-exclusive], irrevocable, perpetual, royalty-free, worldwide licence (with the right to sub-licence, subject to the Contractor's prior written consent, not to be unreasonably withheld) to use, reproduce, adapt, publish, and distribute the Deliverables for any purpose connected with the Company's business.
Note: Under CDPA 1988 section 90(3), an assignment of copyright is not effective unless it is in writing signed by or on behalf of the assignor. A verbal agreement, or a contract that says 'the Company owns all IP' but is not properly executed, may be legally ineffective. Ensure the Agreement is properly signed by or on behalf of the Contractor. For works not yet created at the date of signing, the assignment operates only in equity until each work is created (CDPA 1988 section 91) — for high-value IP, consider a confirmatory assignment on delivery of major Deliverables.
10.2 Moral rights waiver [optional]: the Contractor waives, to the fullest extent permitted by law, all moral rights (within the meaning of Chapter IV of the CDPA 1988, including the right to be identified as author under section 77 and the right to object to derogatory treatment under section 80) in the Deliverables in favour of the Company and its successors and assignees.
Note: Moral rights can be waived in writing under section 87 CDPA 1988. Include this waiver where Option A applies and the Company needs freedom to adapt, modify, or republish the Deliverables without attribution. Where the Contractor is a PSC, moral rights vest in the individual authors — the waiver should be obtained from the relevant individual(s).
10.3 IPR warranty: the Contractor warrants that, to the best of its knowledge and belief: (a) the Deliverables are its own original work and do not infringe any third party's Intellectual Property Rights; (b) it has full right and authority to make the assignment (Option A) or grant the licence (Option B) provided in this Clause 10; and (c) where the Contractor has used artificial-intelligence or open-source tools to assist in creating any Deliverable, the Contractor has done so in compliance with the licences governing those tools and has applied sufficient human creative input for the Deliverable to qualify for copyright protection under English law.
Note: AI and open-source disclosure: AI tools and open-source components both create distinctive IP risks. AI-generated output lacking sufficient human creative expression may not attract copyright protection under English law (so there is nothing to assign), and AI tool providers may retain licence claims over output. Open-source components carry licence obligations (notice, attribution, and — for copyleft licences such as GPL — derived-work disclosure obligations) that can flow to the Company. Clause 10.3(c) addresses both risks in a single warranty rather than as a separate clause.
10.4 Background IPR: each party retains ownership of its own Intellectual Property Rights existing before the Effective Date or created independently of this Agreement ('Background IPR'). Where the Contractor incorporates any Background IPR into the Deliverables, the Contractor grants the Company a perpetual, irrevocable, royalty-free, worldwide licence to use that Background IPR to the extent necessary to use and exploit the Deliverables as intended. Any material Background IPR the Contractor will use in performing the Services should be identified in Schedule 2.
11. CONFIDENTIALITY
11.1 Obligations: each party agrees to: (a) keep the other party's Confidential Information strictly confidential and not disclose it to any third party without the disclosing party's prior written consent; (b) use the other party's Confidential Information only for the purpose of performing or receiving the Services under this Agreement; and (c) where disclosure to employees, contractors, or professional advisers is necessary, ensure those persons are subject to confidentiality obligations at least as protective as those in this Clause 11.
11.2 Exclusions: the obligations in Clause 11.1 do not apply to information that: (a) is or becomes publicly available through no fault or act of the receiving party; (b) was already lawfully known to the receiving party before disclosure; (c) is received from a third party who is free to disclose it without restriction; or (d) is required to be disclosed by law, regulation, or order of a court or regulatory authority of competent jurisdiction — in which case the receiving party shall, to the extent permitted by law, give the disclosing party as much prior written notice as reasonably practicable.
11.3 Protected disclosures: nothing in this Agreement prevents either party from: (a) reporting a suspected criminal offence to law enforcement; (b) making disclosures to or co-operating with HMRC, any regulator, or any ombudsman; (c) complying with any court or tribunal order; (d) making disclosures to their own professional advisers under a duty of confidence; or (e) making any other disclosure required by law. Any such disclosure does not constitute a breach of this Agreement.
Note: This protected-disclosure carve-out is required because the Contractor may qualify as a 'worker' under section 230(3)(b) of the Employment Rights Act 1996. A confidentiality clause that purports to prevent a worker from making a protected disclosure is void to that extent under section 43J of that Act. Do not narrow this clause.
11.4 Survival: the obligations in this Clause 11 shall survive expiry or termination of this Agreement for [post-termination confidentiality survival period in years] years, or indefinitely in respect of information that constitutes a trade secret within the meaning of the Trade Secrets (Enforcement, etc.) Regulations 2018 (SI 2018/597).
11.5 Return on termination: on the expiry or termination of this Agreement (or earlier on the Company's written request), the Contractor shall promptly: (a) return to the Company, or (at the Company's election) irretrievably destroy, all Confidential Information of the Company (including all copies in any format); (b) revoke or transfer all access the Contractor (and any substitute or authorised personnel) has to Company systems, accounts, credentials, shared drives, repositories, and communication channels; and (c) certify in writing that it has done so, if the Company requests.
12. DATA PROTECTION
12.1 Compliance: each party shall at all times comply with all applicable data protection legislation, including the UK GDPR, the DPA 2018, and any legislation implementing or supplementing them.
Note: Use either Option A or Option B for Clause 12.2.
Note: Use Option A if the Contractor will not process any Personal Data on the Company's behalf — for example, advisory work that does not require access to client or employee data. Use Option B if the Contractor will access the Company's CRM, employee or payroll data, customer lists, or any other system containing identifiable individuals' data. UK GDPR Article 28 requires a written controller-processor contract covering specific mandatory terms — failing to have an Article 28-compliant agreement in place is itself a breach of UK GDPR, regardless of whether any data breach occurs.
12.2 Processing arrangement — choose one option and delete the other:
Option A — No Processing of Company Personal Data: the Contractor confirms that it will not process any Personal Data on behalf of the Company in the course of providing the Services. If this position changes, the parties shall agree Option B terms (and complete the processing details in Schedule 3) before any such processing begins.
Option B — Contractor Processes Personal Data as Processor: to the extent that the Contractor processes Personal Data on behalf of the Company in the course of providing the Services, the Company is the data controller and the Contractor is the data processor for the purposes of the UK GDPR. The processing details are set out in Schedule 3. The Contractor shall, as data processor: (a) process Personal Data only on the documented written instructions of the Company, unless required to do so by applicable law (in which case the Contractor shall notify the Company before processing, unless that law prohibits notification); (b) ensure that all persons authorised by the Contractor to process Personal Data are bound by appropriate confidentiality obligations; (c) implement appropriate technical and organisational measures to protect Personal Data against unauthorised or unlawful processing, accidental loss, destruction, or damage, in accordance with UK GDPR Article 32; (d) not engage any sub-processor to process Personal Data on the Company's behalf without the Company's prior written consent (specific or general); (e) promptly assist the Company in responding to requests from data subjects exercising rights under Chapter III of the UK GDPR; (f) assist the Company with its obligations under Articles 32 to 36 of the UK GDPR (security, breach notification, data protection impact assessments, and prior consultation with the ICO), including notifying the Company of any Personal Data breach involving Company Personal Data without undue delay and in any event within 48 hours of becoming aware; (g) on expiry or termination of this Agreement, at the Company's election, delete or return all Personal Data processed on the Company's behalf, and delete all existing copies, except to the extent retention is required by applicable law; and (h) make available to the Company all information necessary to demonstrate compliance with this Clause 12, and allow for and contribute to audits and inspections conducted by the Company or a mandated auditor.
Note: UK GDPR Article 28(3) requires the eight processor obligations in Clause 12.2 Option B (items (a) to (h)). Item (h) — the right of audit — is the most commonly missed. The 48-hour breach notification in (f) is a contractual addition to the Article 28(3)(f) assistance obligation, not a separate Article 28(3) item. Schedule 3 must also contain the five mandatory processing-detail fields: subject matter, duration, nature and purpose, types of Personal Data, and categories of data subjects. The ICO can impose fines of up to £17.5 million or 4% of global annual turnover (whichever is higher) for serious breaches of UK GDPR.
12.3 International transfers: the Contractor shall not transfer Personal Data outside the United Kingdom without the Company's prior written consent and, where required, appropriate safeguards in place under Chapter V of the UK GDPR (which may include reliance on a UK adequacy regulation or the use of the International Data Transfer Agreement or the UK Addendum to the EU Standard Contractual Clauses, in each case as updated from time to time by the Information Commissioner's Office).
13. ANTI-BRIBERY
13.1 Each party shall: (a) comply with all applicable anti-bribery and anti-corruption laws, including the Bribery Act 2010; (b) not offer, promise, give, request, or accept any financial or other advantage with the intention of improperly influencing any person to act in breach of their duties or obligations; (c) maintain procedures reasonably designed and proportionate to its size and risk profile to prevent bribery by persons associated with it; and (d) promptly notify the other party on becoming aware of any actual or suspected breach of this Clause 13.
Note: Bribery Act 2010 section 7 creates a corporate criminal offence of failing to prevent bribery by any person associated with the business, with strict liability subject to a complete defence where the business had 'adequate procedures' in place. For SMEs, adequate procedures need only be proportionate — typically a clear, communicated anti-bribery policy and a basic counterparty due-diligence process. The Ministry of Justice's six guiding principles (proportionate procedures, top-level commitment, risk assessment, due diligence, communication and training, monitoring and review) inform what is 'adequate'. Engagements involving public-sector counterparties, foreign-jurisdiction touchpoints, or commercial intermediation carry higher risk.
14. LIMITATION OF LIABILITY
14.1 Uncapped liabilities: nothing in this Agreement excludes or limits either party's liability for: (a) death or personal injury caused by that party's negligence (section 2(1) of the Unfair Contract Terms Act 1977 ('UCTA 1977')); (b) fraud or fraudulent misrepresentation; or (c) any other liability that cannot lawfully be excluded or limited.
Note: Section 2(1) UCTA 1977 prohibits any contractual exclusion or restriction of liability for death or personal injury resulting from negligence — a term attempting to do so is automatically void. Liability for fraud cannot be excluded as a matter of English public policy. These are absolute prohibitions and cannot be varied by agreement.
14.2 Excluded loss types: subject to Clause 14.1, neither party shall be liable to the other for any of the following types of loss, whether arising in contract, tort (including negligence), breach of statutory duty, or otherwise, and even if that party was advised of the possibility of such loss: (a) loss of profits; (b) loss of revenue or turnover; (c) loss of business, contracts, or opportunities; (d) loss of anticipated savings; (e) loss of or damage to goodwill or reputation; or (f) any indirect or consequential loss.
Note: Exclusions of consequential or indirect loss caused by negligence, or in a contract on one party's written standard terms, must satisfy the UCTA 1977 reasonableness test (sections 2(2) and 3, applied with the Schedule 2 factors in section 11). The court considers: relative bargaining strength; whether the limiting party offered a lower price in exchange for the limit; availability of insurance; whether the other party knew of the limit; and the nature and value of the services. Documenting these factors in the deal file (not in the contract) strengthens enforceability.
Note: Use either Option A or Option B for Clause 14.3 (aggregate liability cap).
Note: Use Option A (fee-linked cap) for ongoing or rolling engagements — this is the most commercially balanced and commonly used approach in UK SME services agreements (1x fees in the prior 12 months is standard; 2x for higher-risk engagements). Use Option B (insurance-linked) only where the Contractor genuinely maintains professional indemnity insurance and the Company wants the cap to track available cover. A cap set materially below the contract fee risks failing the UCTA 1977 reasonableness test.
14.3 Aggregate liability cap — choose one option and delete the other:
Option A — Fee-Linked Cap: subject to Clause 14.1, each party's total aggregate liability to the other under or in connection with this Agreement, whether arising in contract, tort (including negligence), breach of statutory duty, or otherwise, shall not exceed an amount equal to the total Fees paid or payable by the Company to the Contractor in the [look-back period in months for fee-linked liability cap] months immediately preceding the event giving rise to the claim; save that the cap in this Clause 14.3 shall not apply to (a) the Company's obligation to pay undisputed Fees properly invoiced under this Agreement, or (b) any liability that cannot be limited or excluded under Clause 14.1.
Option B — Insurance-Linked Cap: subject to Clause 14.1, each party's total aggregate liability to the other under or in connection with this Agreement, whether arising in contract, tort (including negligence), breach of statutory duty, or otherwise, shall not exceed the level of insurance maintained by the liable party in respect of the relevant risk (and as evidenced by a current certificate provided to the other party on request); save that the cap in this Clause 14.3 shall not apply to (a) the Company's obligation to pay undisputed Fees properly invoiced under this Agreement, or (b) any liability that cannot be limited or excluded under Clause 14.1.
Note: [optional] additional carve-outs from the cap may be added to favour the Company — for example, liability arising from breach of Clause 10 (IP warranty), Clause 11 (Confidentiality), or Clause 12 (Data Protection). These carve-outs make the cap meaningful for the Company's most material risks. Contractors should ensure their PI policy covers these risks if such carve-outs are agreed. The mandatory exclusions in (a) and (b) of each Option above — unpaid Fees and uncapped liabilities — must always remain regardless of any optional carve-outs.
15. TERMINATION
Note: Use either Option A or Option B for Clause 15.1 (termination for convenience).
Note: Use Option A (single fixed notice period) for simplicity — both parties get the same straightforward exit at any point during the Probation Period. Use Option B (graduated notice) where the parties want to give the Contractor more security as the Probation Period progresses. Whichever option is used, the notice period should be long enough to allow the Contractor to find alternative work; very short notice may discourage strong candidates from accepting probation arrangements.
15.1 Termination for convenience — choose one option and delete the other:
Option A — Single Fixed Notice Period: either party may terminate this Agreement at any time during the Probation Period for any reason by giving the other party [single notice period in weeks for termination for convenience] weeks' written notice.
Option B — Graduated Notice Period: either party may terminate this Agreement at any time during the Probation Period for any reason by giving written notice as follows: (a) during the first [number of months triggering early-stage notice period] months of the Probation Period, [early-stage notice period in weeks] weeks' written notice; and (b) thereafter, [later-stage notice period in weeks] weeks' written notice.
15.2 Termination for cause: either party may terminate this Agreement immediately by written notice to the other if the other party: (a) commits a material breach of this Agreement and — where the breach is capable of remedy — fails to remedy it within [remedy period in business days for material breach] Business Days of receiving written notice specifying the breach and requiring it to be remedied; (b) where the other party is a company: becomes insolvent, enters into administration or liquidation (other than for the purpose of a solvent reconstruction or amalgamation), has a receiver, administrative receiver, or administrator appointed over all or any part of its assets, enters into a voluntary arrangement with its creditors, or is unable to pay its debts as they fall due within the meaning of section 123 of the Insolvency Act 1986; (c) where the other party is an individual sole trader: has a bankruptcy petition presented against them, has a bankruptcy order made against them, enters into an individual voluntary arrangement, or is unable to pay their debts within the meaning of section 268 of the Insolvency Act 1986; or (d) commits an act of fraud, dishonesty, or gross misconduct that materially damages or is likely to damage the other party.
Note: Insolvency triggers — form-neutral: Clause 15.2(b) covers company insolvency events; Clause 15.2(c) covers sole-trader insolvency events. Both are needed because the Contractor may be a sole trader or a PSC. Note that section 233B of the Insolvency Act 1986 (inserted by the Corporate Insolvency and Governance Act 2020) restricts most non-financial suppliers from terminating contracts on a customer's entry into a formal insolvency process — that restriction operates regardless of contract drafting and may override Clause 15.2(b) in practice.
15.3 Effect of termination or expiry: on termination or expiry of this Agreement (other than where conversion to employment occurs under Clause 3): (a) the Company shall pay all Fees properly earned and invoiced for Services provided up to the termination or expiry date; (b) the Contractor shall comply with Clause 11.5 (return and destruction of Confidential Information and revocation of system access) and shall return the Company Property in accordance with Clause 8; (c) each party's accrued rights and liabilities up to the date of termination or expiry are unaffected; and (d) the following Clauses shall survive: 1, 9 (outstanding payment obligations), 10, 11, 12, 14, 15.3, 16, and 17.
16. POST-TERMINATION RESTRICTIONS [optional]
Note: Restrictive covenants are governed by the common-law doctrine in restraint of trade. To be enforceable, a restriction must (i) protect a legitimate business interest (such as trade connections, Confidential Information, or a stable workforce), and (ii) be no wider than reasonably necessary. Courts will not rewrite an over-broad restriction — they will strike it out entirely, leaving the Company unprotected. Keep periods short, scope narrow, and look-back periods proportionate. Take legal advice before including these restrictions, particularly if the Contractor is a key individual or has access to senior client relationships. Delete this Clause 16 entirely if not required.
16.1 Restrictions: the Contractor undertakes that, for a period of [post-termination restriction period in months] months after expiry or termination of this Agreement (other than where conversion to employment occurs under Clause 3, in which case any restrictions are governed by the post-conversion employment contract), the Contractor shall not, without the Company's prior written consent: (a) directly or indirectly solicit, entice away, or seek to do business in competition with the Company from any client or customer of the Company with whom the Contractor had material direct dealings during the final [non-solicitation look-back period in months] months of the Probation Period; or (b) directly or indirectly solicit or seek to engage (whether as employee, contractor, or otherwise) any employee or senior contractor of the Company with whom the Contractor worked closely during the Probation Period.
16.2 Carve-outs: Clause 16.1 does not prevent the Contractor from: (a) dealing with any person or entity with whom the Contractor had a pre-existing professional relationship independently of this Agreement; or (b) accepting work from a former client of the Company where that client approaches the Contractor on its own initiative without prior solicitation by the Contractor.
16.3 Severability of restrictions: each restriction in Clause 16.1 is independent of the others. If any restriction is found to be unenforceable in its current form, the parties intend that the court shall modify it to the minimum extent necessary to make it enforceable, rather than striking it out entirely.
17. GENERAL PROVISIONS
17.1 Policies and procedures: the Contractor shall comply with the Company's policies on health and safety, IT security, data protection, anti-bribery, and (where applicable) homeworking and hybrid working, in each case as in force from time to time and notified to the Contractor. Any breach of those policies shall be treated as a breach of this Agreement only to the extent the breach causes material harm to the Company.
17.2 Entire Agreement: this Agreement (including all Schedules) constitutes the entire agreement between the parties relating to its subject matter and supersedes all prior agreements, representations, discussions, and understandings between them, whether oral or written. Each party confirms that it has not relied on any representation, warranty, or statement that is not expressly set out in this Agreement. Nothing in this Clause 17.2 limits or excludes liability for fraudulent misrepresentation.
Note: The 'no reliance' wording reduces the risk of a misrepresentation claim under the Misrepresentation Act 1967. However, section 3 of that Act subjects any term excluding misrepresentation liability to the UCTA 1977 reasonableness test — this wording reduces but does not eliminate the risk. Important pre-contract representations should be expressly captured in the Agreement. The fraudulent-misrepresentation carve-out at the end of Clause 17.2 is mandatory and must not be removed — fraudulent-misrepresentation liability cannot be excluded under English law.
17.3 Variation: no variation to this Agreement is valid or effective unless made in writing and signed by an authorised representative of each party.
17.4 Assignment: (a) the Company may not assign, transfer, charge, or otherwise deal with its rights or obligations under this Agreement without the Contractor's prior written consent, save that the Company may assign this Agreement (without consent) to a successor in title in connection with a genuine merger, acquisition, or sale of substantially all its business or assets; and (b) the Contractor may not sub-contract performance of any of the Services without the Company's prior written consent, except as expressly permitted under Clause 2.5.
17.5 Waiver: a failure or delay by a party to exercise any right or remedy under this Agreement shall not constitute a waiver of that or any other right or remedy, and shall not prevent or restrict any further exercise of that or any other right or remedy.
17.6 Severance: if any provision of this Agreement is or becomes invalid, illegal, or unenforceable, it shall be deemed deleted to the minimum extent necessary, and the validity and enforceability of the remaining provisions shall not be affected.
17.7 Notices: any notice given under this Agreement must be in writing and shall be: (a) delivered by hand or sent by first-class post to the party's address as set out in this Agreement; or (b) sent by email to the address set out in Schedule 1, Part C, provided the sender retains a delivery or read receipt or other evidence of transmission and does not receive an automated delivery failure notification. A notice delivered by hand is deemed received at the time of delivery. A notice sent by first-class post is deemed received on the second Business Day after posting. A notice sent by email is deemed received at the time of sending, unless sent after 17:00 on a Business Day or on a non-Business Day, in which case it is deemed received at 09:00 on the next Business Day.
17.8 Third Party Rights: no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to it. This does not affect any right or remedy of a third party that exists independently of that Act.
17.9 Governing Law and Jurisdiction: this Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales. Each party irrevocably agrees to submit to the exclusive jurisdiction of the courts of England and Wales.
17.10 Counterparts and electronic signatures: this Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all counterparts together shall constitute one binding agreement. An electronic signature applied by either party (including using a recognised electronic signing platform) shall be treated as equally valid and binding as a handwritten signature for the purposes of this Agreement (not being a deed).
Note: Electronic signatures are valid under English law for simple contracts (but not deeds) under the Electronic Communications Act 2000 and the Electronic Identification and Trust Services for Electronic Transactions Regulations 2016. If this Agreement were to be executed as a deed (which would extend the limitation period from 6 to 12 years under the Limitation Act 1980), additional formalities apply, including physical witnessing — remote electronic witnessing is not sufficient for deeds under current Law Commission guidance.
EXECUTION
By signing below, each party agrees to be bound by the terms of this Agreement.
SIGNED for and on behalf of [the company]
Signature:
Full Name: [full name of the authorised signatory of the company]
Title / Position: [title or position of the authorised signatory of the company]
Date: [date of signature by the company]
SIGNED by [the contractor] / for and on behalf of [the contractor's psc] (delete as applicable)
Signature:
Full Name: [full name of the authorised signatory of the contractor]
Title / Position: [title or position of the authorised signatory of the contractor]
Date: [date of signature by the contractor]
Note: Sole-trader execution: if the Contractor is an individual sole trader, the individual signs in their own name and deletes 'for and on behalf of [the contractor's psc]'. If signing on behalf of a PSC, the signatory must be authorised under the company's articles or by board resolution.
SCHEDULE 1 — KEY COMMERCIAL TERMS
Note: Complete this Schedule before execution. All placeholders in the body of the Agreement correspond to entries below. In case of conflict between this Schedule and the standard terms in Clauses 1 to 17, this Schedule prevails.
Part A — Party and Engagement Details
Effective Date (Clause 1.8): [effective date]
End of Probation Period (Clause 1.13): [end date of probation period]
Company Full Legal Name: [full legal name of the company]
Company Number: [companies house registration number of the company]
Company Registered Office Address: [registered office address of the company]
Contractor Full Legal Name: [full legal name of the contractor]
Contractor PSC Number (if applicable): [companies house registration number of the contractor (if psc)]
Contractor Address: [registered office address of the contractor (if psc)] / [home address of the contractor (if individual)]
Home Address (Clause 1.10): [home address of the contractor for hybrid working]
Company Premises (Working Locations, Clause 1.15): [address of the company premises used for hybrid working]
Part B — Commercial and Operational Terms
Hybrid Pattern (Clause 5.1): [indicative hybrid working split, e.g. 3 days at the home and 2 days at the company premises per week]
Conversion Review Notice Period (Clause 3.1): [number of weeks for conversion review meeting before end of probation period]
Notice to Revert to Workplace-Based Working (Clause 5.3): [number of weeks of notice for reverting to workplace-based working]
Maximum Days Working from Outside the UK (Clause 5.4): [maximum number of days working from outside the uk]
Notice for Change of Home Address (Clause 5.5): [notice period for change of contractor home address]
Indicative Working Pattern (Clause 6.1): [indicative number of days or hours per week]
Core Availability Hours (Clause 6.2): [core hours during which the contractor should be available, e.g. 09:00 to 17:00]
Company's Nominated Contact (Clauses 4.2 and 6.2): [name and role of the companys day-to-day contact]
Substitution Option (Clause 2.5): [option a — right of substitution / option b — personal performance required]
Personal Performance Name (if Option B, Clause 2.5): [full name of the individual performing the services]
Other Client / Exclusivity Restrictions (Clause 2.11): [none / any specific exclusivity restrictions, e.g. no work for direct competitors during the probation period]
PI Insurance Option (Clause 8.5): [option a — pi cover required / option b — no mandatory pi cover]
Minimum PI Cover (if Option A, Clause 8.5): [minimum professional indemnity cover per claim or per year]
PI Run-off Period (if Option A, Clause 8.5): [number of years of run-off pi cover required after probation period]
Fee Structure Option (Clause 9.1): [option a — fixed monthly retainer / option b — time and materials or milestones]
Monthly Retainer Amount (Option A, Clause 9.1): [monthly retainer amount]
Retainer Payment Day (Option A, Clause 9.1): [day of the month for retainer payment]
Retainer Volume (Option A, Clause 9.1): [days or hours covered by retainer per month]
Additional Time Rate (Option A, Clause 9.1): [additional time rate per day or hour]
Day or Hourly Rate (Option B, Clause 9.1): [day rate or hourly rate]
Rate Basis (Option B, Clause 9.1): [day or hour basis for time-and-materials rate]
Time / Milestone Reporting Frequency (Option B, Clause 9.1): [frequency of time or milestone records]
Maximum Spend Cap (optional, Option B, Clause 9.1): [maximum spend cap if used under option b] per [period for maximum spend cap under option b]
Invoicing Frequency (Clause 9.2): [invoicing frequency: monthly in arrears or on completion of agreed milestones]
Payment Period (Clause 9.2): [payment period in days from receipt of invoice]
Invoice Contact Email (Clause 9.2): [invoice contact email address]
VAT Treatment (Clause 9.3): [vat treatment: exclusive or inclusive of vat]
Expense Claim Period (Clause 9.5): [expense claim submission period in days]
Single Expense Approval Threshold (Clause 9.5): [single expense approval threshold amount]
Ordinary-Travel Exclusion Region (Clause 9.5): [city or region of the companys premises for ordinary travel exclusion]
IP Option (Clause 10.1): [option a — full assignment to company / option b — licence only]
Confidentiality Survival Period (Clause 11.4): [post-termination confidentiality survival period in years]
Liability Cap Option (Clause 14.3): [option a — fee-linked cap / option b — insurance-linked cap]
Look-back Period for Fee-Linked Cap (Option A, Clause 14.3): [look-back period in months for fee-linked liability cap]
Termination for Convenience Option (Clause 15.1): [option a — single fixed notice period / option b — graduated notice period]
Single Notice Period (Option A, Clause 15.1): [single notice period in weeks for termination for convenience]
Early-Stage Threshold (Option B, Clause 15.1): [number of months triggering early-stage notice period]
Early-Stage Notice Period (Option B, Clause 15.1): [early-stage notice period in weeks]
Later-Stage Notice Period (Option B, Clause 15.1): [later-stage notice period in weeks]
Remedy Period for Material Breach (Clause 15.2): [remedy period in business days for material breach]
Post-Termination Restriction Period (Clause 16.1) [optional]: [post-termination restriction period in months]
Non-Solicitation Look-back Period (Clause 16.1) [optional]: [non-solicitation look-back period in months]
Part C — Notice Email Addresses (Clause 17.7)
Email Address of the Company for Notices: [email address of the company for notices]
Email Address of the Contractor for Notices: [email address of the contractor for notices]
SCHEDULE 2 — SERVICES, DELIVERABLES AND COMPANY PROPERTY
Note: Complete this Schedule with a detailed description of the Services, Deliverables, and any Company Property. A vague description is the single most common cause of contractor disputes — be specific. The description should also support the intended IR35 status conclusion: focus on outputs and outcomes rather than fixed hours, supervision, or location-bound attendance.
Part A — Description of Services
Role / Project Title: [role or project title for the engagement]
Description of Services: [detailed description of what the contractor will do — specific tasks, standards or methodologies, key milestones or deadlines]
Company Dependencies: [what the company will provide to enable performance — e.g. access to systems, materials, data, information, approvals]
Exclusions from Scope: [what is explicitly excluded from the services]
Part B — Deliverables and Acceptance
Deliverables: [list of all deliverables, including format, file type, and method of delivery]
Acceptance Criteria: [objective criteria for acceptance — e.g. conformance with written specification; the company must confirm acceptance or notify defects within a stated number of business days of receipt]
Background IPR (Clause 10.4): [list of any pre-existing tools, frameworks, code libraries, or other ip the contractor will bring to the engagement, or 'none identified at the date of this agreement']
Part C — Company Property and Working Arrangements
Note: Document working arrangements in a way that supports the intended IR35 status conclusion. Avoid specifying fixed hours or rigid on-site attendance unless genuinely required — both increase IR35 risk. Outcome-based requirements are preferable.
Company Property Provided (Clause 8.1): [list of equipment, devices, software, and accounts the company will provide — or 'contractor uses own equipment']
Equipment Used by the Contractor (Clause 8.4): [list of equipment the contractor will use that is not provided by the company]
Working Locations Confirmed (Clause 5.1): [confirmed working locations and indicative hybrid pattern]
Travel and Off-Site Expectations (Clause 5.2): [indicative travel or off-site attendance, e.g. quarterly off-sites, client visits]
SCHEDULE 3 — DATA PROCESSING (UK GDPR ARTICLE 28)
Note: Complete this Schedule only if Option B is selected in Clause 12.2. All five processing-detail fields below are mandatory under UK GDPR Article 28(3) and must be completed before the Agreement is signed. Omitting any of them means the processor contract does not satisfy Article 28 and constitutes a breach of UK GDPR independently of any data breach.
Part 1 — Status of the Parties
Controller: the Company
Processor: the Contractor
Data Protection Option (Clause 12.2): [option a — no processing of company personal data / option b — contractor acts as data processor]
Part 2 — Mandatory Article 28(3) Processing Details
Subject Matter of Processing: [e.g. provision of email marketing services; it support and system administration; payroll services]
Duration of Processing: [e.g. for the duration of the probation period; until deletion or return of company data on termination or expiry]
Nature and Purpose of Processing: [e.g. sending marketing emails to the companys customer list on the companys instructions; managing and maintaining company it systems; processing employee payroll]
Types of Personal Data: [e.g. names, email addresses, postal addresses, purchase history, ip addresses, payroll data, system access credentials]
Categories of Data Subjects: [e.g. companys customers; companys employees; end users; website visitors]
Sub-Processors Approved at Date of Signing: [list of approved sub-processors, with name and country, or 'none approved at the date of signing']
Part 3 — International Transfers
Transfer Restrictions (Clause 12.3): the Contractor shall not transfer Personal Data outside the United Kingdom without the Company's prior written consent, with appropriate safeguards under Chapter V UK GDPR (which may include the International Data Transfer Agreement or the UK Addendum to the EU Standard Contractual Clauses, as updated by the ICO from time to time).
Part 4 — Security Measures
Technical and Organisational Measures (Article 32 UK GDPR): [description of the technical and organisational security measures the contractor will implement, e.g. encryption at rest and in transit; access control via role-based permissions; multi-factor authentication; security software updated on all devices; password-protected work folders on personal devices; locked screens when unattended; secure disposal of paper records; staff training]
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