Sample contract agreement with an individual for the provision of services

Last modified: February 2021

Carrying out work of a one-time nature, obtaining maximum material benefits with minimal costs encourage legal entities to enter into a contract with an individual. Registration of bilateral relations requires an individual approach when choosing an enterprise employee, a third-party individual or an individual entrepreneur as a contractor. The achieved tax optimization is “under the radar” of the inspection structures.

Relying on the Law

An agreement according to which the customer (employer) gives the contractor (employee) a certain task with subsequent payment for the result is a contract .

The provisions that regulate this type of relationship are enshrined not in the Labor Code, but in the Civil Code (Chapter 37-38 of the Civil Code of the Russian Federation). In addition, specialized legal acts are applicable to certain types of contracts, such as consumer protection, federal laws relating to architectural, investment activities, etc.

Tax

In 2021, the employer organization must pay contributions in the form of taxes to the following organizations:

• under a contract with individuals, the organization pays 22% of the total amount in the form of contributions to the Pension Fund;
• a payment of 5.1% of the same amount is made to the health insurance fund;
• Payments to the social insurance fund are made if the company undertakes obligations for the corresponding payments.

A contract with an individual is an excellent means of legitimizing labor relations with an employee who is hired only to fulfill specific purposes. Filling it out, although it is easy, however, there are some nuances and features that you need to know in order to draw up the document correctly. It must be remembered that from 2021 this type of cooperation is subject to taxes that must be paid.

Contract with character

Features and differences between a work contract and other types of approval documents:

1. Consensuality . A contract is concluded from the moment the parties agreed on the terms and sealed the promise to fulfill them with signatures. No further actions are required to initiate the contract.
2. Reciprocity . Both parties are legally equal. The basis of contracts of this type is initial mutual trust and good conscience.
3. Remuneration . Both parties, having fulfilled the agreement, receive a certain profit.
4. Divisibility of an object . If the result obtained can be divided into several equal independent parts, the subject of the contract is considered divisible. An indivisible object implies the singularity of the result of the contractor’s actions.

Contracts can be different, most often the following are concluded:

• building;
• domestic;
• design;
• municipal or state;
• for scientific research.

A work contract is in many ways similar to other obligations, which provide for the performance of certain actions, but it has many unique features that make such a document a separate form of agreement.

View from different sides

There are 2 parties to the contract: the customer and the contractor . They can be both individuals and legal entities, as well as individual entrepreneurs (in any combination of each other).

The law does not prohibit the involvement of additional performers - subcontractors . Then the first contractor will act as a general contractor, responsible to the customer, while the subcontractors are already responsible to him. If the subject of the contract is divisible, each subcontractor is responsible for its share. In case of indivisibility, the liability of subcontractors is joint and several.

REFERENCE! The relationship between the general contractor and subcontractors is regulated by a separate document - a subcontract agreement.

Without which there will be no contract

In a work contract, the essential elements include the subject of the contract and the deadlines for completion. Another element that does not affect materiality is the price, sometimes drawn up as an estimate. Let's take a closer look at these elements.

What subject are we talking about?

A work contract implies a specific subject - the result for which the contract was concluded. The achieved result must be material, separable from both sides. In addition, it must be possible to guarantee the quality of the result; it must depend on objective factors.

FOR EXAMPLE: the quality of the built foundation for a house depends on the materials used, it must comply with certain SNiPs, GOSTs and have a warranty period (that is, the foundation must last a certain period). But an English language course, even if taught by the best teachers using certified manuals, will not necessarily be mastered by students. Therefore, the latter cannot be the subject of a contract, unlike the former.

So, the subject of a contract can only be a thing or a property of this thing:

• a newly created material object (for example, a manufactured table);
• a new property of an already finished item (for example, an improved or repaired device);
• another result that has materiality (for example, developed documentation).

Enter deadlines

The deadlines specified in the text are essential - without them, the contract will not be valid. It is necessary to mark the start and end dates of the work. It is permissible to establish intermediate stages, especially in long-term contracts. Meeting the allotted time is the contractor’s problem. But, if stipulated by the conditions, the dates can be moved at the initiative of both parties.

Completion of the contract sooner than specified is at the discretion of the contractor. If the contract has a clause on urgency, delays will be paid additionally.

IMPORTANT! When the customer sees that the contractor will definitely not meet the deadline due to a late start or insufficient pace of work, it is permissible to refuse the contract and demand compensation for damages.

The other side also has the right to be paid for the results of work on time. If the customer delays accepting the work, avoiding contacts with the contractor, then the latter has the right, after informing the customer twice, to sell the result of his work a month after the deadline, taking the due amount for himself and sending the rest of the amount to the customer’s account.

Contractual nuances with the participation of individuals

Registration of a contract for an employee of an organization or a citizen who is not in an employment relationship with the employer has nuances in terms of the desire of the inspectors to recognize the concluded deal as feigned and concealing the employment relationship. If there is evidence confirmed by judicial decisions, the employer is forced to make additional payments to the level of regular wages for hiring employees and pay penalties.

Documenting

There is no standard form of a contract. Correctly drawing up documents for an enterprise means minimizing the risk of being brought to administrative liability for a “sham” agreement equated to an employment agreement. How to conclude a contract and what terminology to use, in order to avoid equating it with labor relations, is presented in the table:

Download a sample contract agreement with an individual (25.8 KiB, 19,410 hits)

A written form in accordance with Article 161 of the Civil Code of the Russian Federation with detailed conditions for the acceptance and delivery of work, the incurrence of material costs or subsequent compensation, the clarity of the task and the indication of deadlines will maximally protect the employer from recognizing the relationship as an employment relationship even when registering with an employee of the organization.

Can a contractor be an individual who is not registered as a business entity? The answer is yes only if the transaction is one-time. The systematic conclusion of an agreement for the performance of identical work with the same individual can easily be reclassified by inspection structures as an employment contract, and the citizen can be equated to a member of the work collective.

In the document, it will be erroneous to mention the qualifications and skill of the performer; emphasis should be placed on the timing and list of works.

Download the Contract Agreement with an individual for the provision of services (works). Example (59.0 KiB, 8,176 hits)

Arbitrage practice

The peculiarities of drawing up a work contract that are not taken into account by the employer have the negative practice of courts equating concluded agreements with the category of labor agreements. The situations and court decisions are presented in the table:

Courts often make decisions in favor of the employer when specifying penalties in any amount, since they regard this item as a risk for the contractor. Therefore, including in the sample agreement information about punishment for poorly performed work is “killing two birds with one stone,” adding responsibility to the contractor and reducing the danger of equating the transaction to the category of employment contracts.

Recommendations for compilation

A standard contract developed by an organization must contain a number of key points inherent in civil law relations, completely excluding labor ones. When drawing up, you should be guided by the total cost of the material object, the scale of construction and the status of the contractor. Legal subtleties that you need to pay attention to:

1. Contract form. Theoretically, an agreement can be concluded orally if the following conditions are simultaneously met:
   transaction amount is less than 10,000 rubles;
2. relationships between physical persons.

Although Article 161 of the Civil Code of the Russian Federation recommends that the transaction be formalized in simple written form.

1. Validity. Despite the signing by both parties, the transaction is legally considered unconcluded if the delivery period is not agreed upon. If there is uncertainty on this issue, then lawyers recommend setting a maximum period, which can be extended in the future by drawing up an additional agreement.
2. Subject of the agreement. What kind of work is being performed under the contract, what is it in terms of stages and obtaining a specific final material result, closing documents recording the fact of completion of the transaction. Otherwise, the transaction is qualified as not concluded.
3. Contractor status. If the work is one-time in nature, then the conclusion of an agreement between an LLC and an individual is not recognized as concealing labor relations. As judicial practice shows, if the principle of one-time performance is violated, then the remuneration paid is equated to a hidden salary. To continue the relationship, the contractor must obtain the status of an entrepreneur, which gives a difference in approaches to taxation issues between an individual entrepreneur and an individual.
4. Cost of work. The price is not considered an essential condition, and its absence does not serve as a basis for invalidating the agreement. When concluding a transaction without specifying the amount, if disputes arise, the cost is calculated based on the average price prevailing in the market for similar types of work. If the transaction involves many stages, then it is advisable to refer to the estimates drawn up for each stage, typical for construction contracts between legal entities.
5. Personal income tax. When concluding contractual legal relations with a citizen who is not registered as an individual entrepreneur, with an employee, a sample calculation of the final cost must include the tax transferred to the budget when paid to the contractor. Indication of the amount in “net” mode and payment from one’s own funds are grounds for declaring the transaction invalid.
6. Responsibility of the parties. It is advisable to provide for the imposition of penalties and financial sanctions for:
   failure to meet deadlines;
7. inadequate quality;
8. compensation for losses.

The essential conditions are the subject of the contract and the timing of the fulfillment of obligations. Without indicating these indicators, the agreement is considered unconcluded. The price is not included in the list of essential conditions, however, incorrect formation of the final cost gives grounds for invalidating the contract. Using the terms of the Labor Code allows the court to recognize the transaction as “sham”, serving the purpose of concealing the actual employment.

Everything has a price

For construction contracts, cost is not a mandatory condition. Instead of putting down numbers, you can indicate how the remuneration is set: usually it is labor costs plus payment for the work. The price may not be indicated: in this case, the calculation takes place at similar prices for similar work.

FOR YOUR INFORMATION! The price is not necessarily fixed in monetary terms: by agreement, the contractor may be provided with a certain service or certain property may be transferred.

If the contract is large-scale, long-term and involves different types of work, it is more logical to document the cost with an estimate. Any party can create it. If the parties have not decided on the approximate estimate, it is taken into account as firm by default - that is, it is unacceptable to deviate from its provisions in the direction of exceeding it.

NOTE! A contractor who exceeds the firm estimate may be refused further cooperation (with compensation for the part of the work performed). But if the overexpenditure is associated with objective reasons, for example, an increase in the cost of consumables, the contractor has the same rights (Article 451 of the Civil Code of the Russian Federation).

I have rights, but I also have obligations

The contractor is obliged:

• comply with contractual deadlines and budgets;
• use your own forces, means and materials for work, unless otherwise specified in the contract, while guaranteeing the proper quality of tools, equipment and materials;
• perform the work efficiently (if the standards and warranty periods are not specified in the contract, then the usual requirements for this category of items apply);
• inform the customer about all circumstances that could affect the result (changes in the quality of materials, deadlines, estimates), suspending work until the customer clarifies the situation.

What can a contractor expect:

• customer refusal and compensation;
• if the quality is lower than required - refusal, requirement to replace the subject of the contract, correction of defects, price reduction, reimbursement of correction costs;
• if the contractor did not promptly inform the customer about the changed circumstances and continued performance without approval, then reference to these circumstances will not be taken into account.

The customer is obliged:

• in the case where the contract provides for a change in the quality of the thing, the subject of the contract must be provided in a timely manner and in proper condition;
• if the provision lies with the customer, then everything necessary must also be provided on time;
• respond to contractor requests in a timely manner;
• timely accept work according to the delivery and acceptance procedure;
• make a payment.

What does the customer risk:

• compensation to the contractor in case of unilateral refusal to work;
• suspension of work without timely provision (if agreed upon);
• rescheduling or increasing the cost of work (if there are problems with facilitating the work);
• without checking the quality during transmission, appeal to obvious shortcomings of the work.

Features of the rights and obligations of individual entrepreneurs and individuals entering into an agreement

The main feature that distinguishes contracts between individual entrepreneurs and individuals is the civil law nature of such agreements. That is, the norms of the Labor Code that ensure the rights of the employee are not applied here. All obligations of the parties to such agreements are governed by civil law.

When the contractor is an individual entrepreneur, he is obliged to pay all taxes and fees independently. And if an individual entrepreneur acts as a customer, then he himself charges taxes on the amount paid to an individual and pays it through his accounting department. That is, in both cases, the responsibility for paying taxes falls on the individual entrepreneur.

Both parties signing the agreement act in accordance with the points written in the document. There are some obligations that arise regardless of whether they are specified in the contract or not, directly provided for by civil law. Among these norms it should be noted:

1. The contractor has the right to suspend work and services if the customer, for his part, does not fulfill his obligations under the contract.
2. The contractor's obligation to pay for losses to the contractor when such losses arose through no fault of either the contractor or the customer.

When concluding civil contracts between individual entrepreneurs and individuals, it is necessary to carefully study all legal requirements regarding their structure and content, as well as take into account the emerging legal features of the rights and obligations of the contracting parties.

• Author: ozakone
• Print

Rate this article:

1. 5
2. 4
3. 3
4. 2
5. 1

(8 votes, average: 4 out of 5)

Share with your friends!

We accept the finished result

The paper that records the completion of the work by the contractor and the satisfaction of the customer with it is called the act of acceptance of the work performed. It is mandatory only for construction contracts (clause 4, Article 753 of the Civil Code), but is also used in other agreements. This document can serve as evidence in case of legal disputes. The specifics of the contents of the act are recorded in the contract and appendices:

• form of the agreement (not defined by law);
• procedure for signing by the parties;
• timing of signing;
• persons authorized to sign;
• liability of the parties for non-signing.

When is this agreement concluded?

Sometimes an organization needs to do some one-time work; creating a separate staff unit for this and hiring a person will be at least unprofitable and incorrect. It is best to enter into an agreement with an individual to perform certain work. This agreement is called a contract with an individual.

1. A written contract must be concluded in the following cases:

• the amount of the agreement exceeds 10,000 rubles;
• for a smaller amount, but by mutual agreement of the parties.

1. An oral agreement is concluded when the amount does not exceed 10 thousand rubles.

Manual for drawing up a work acceptance certificate

Clause 1 of Article 720 of the Civil Code states that inspection of the work result and its acceptance must be carried out by the customer in the presence of the contractor, and at the same time they sign the corresponding act. In order for the procedure to go smoothly, you need to pay attention to the proper preparation of the document. We provide step-by-step instructions.

1. Name . The document is called “Work Acceptance Certificate”, then you need to indicate which ones, and also provide the details of the relevant contract.
2. Date of preparation . It may differ from the final date for completion of work specified in the contract. It is better to agree on the date of acceptance and transfer in the text of the contract separately.
3. Details of the parties . Names and details of legal entities, full names of individuals.
4. Job information . Information about the type, volume and timing of the contract.
5. Calculations . Indication of the amount of monetary or other measure of payment to the contractor.
6. Signatures . Persons who completed the act of acceptance and transfer of work or authorized to do so by the customer and contractor, indicating their positions, surnames and initials.
7. Seal . It is not provided for by law, but is a business custom; moreover, it contains the customer’s details.

IMPORTANT! If the act does not contain at least one of the listed points, it may be declared invalid.

How to compose it correctly?

At the legislative level, there are no strict requirements for concluding civil contracts. Therefore, they are formalized in simple written form. However, you need to adhere to certain standards and rules, structure, and provide complete information for the document to have legal force.

The following information is required to be included in the agreement:

• complete information about the two parties to the transaction (full name, passport series and number, residential address, telephone number);
• date and place of conclusion of the contract;
• description of the subject of the contract;
• a list of the rights, duties and responsibilities of each party;
• conditions and grounds for early termination of the contract;
• the amount of payment for services provided or work performed;
• consequences of failure to comply with the terms of the agreement for each of the parties;
• validity;
• number of completed and signed copies of the agreement.

The more details are included in the text of the contract for the provision of services and work, the easier it will be to defend your interests in court in the event of controversial situations.

Dear readers! Our articles talk about typical ways to resolve legal issues, but each case is unique.

If you want to find out how to solve your particular problem, please use the online consultant form on the right or call:

What if the job doesn’t suit you?

If deficiencies are identified during the acceptance of work, the customer can include them in the act (clause 2 of Article 720 of the Civil Code). If this is technically difficult (for example, such a section or column is not provided), the act should not be signed. The reasons for refusing to sign - discovery of deficiencies - must be stated in a separate document, which is sent or handed to the contractor.

If the defects are hidden and only revealed during the operation of the delivered subject of the contract, the customer has the right to declare them within the period established by law.

A signed acceptance certificate deprives the customer of the opportunity to declare obvious deficiencies.