Commercial contracts · Template

Freelance and contractor agreement template for India

The clause that matters most in a freelance contract is the one most freelance contracts leave out. Under Indian copyright law an independent contractor is not an employee, and paying for work does not by itself transfer ownership of it. Without a written assignment, you commissioned the work and they own it.

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When you need this

  • Before engaging a designer, developer, writer or consultant on a project basis
  • When the deliverable is something you need to own outright — code, brand assets, written material
  • Where the engagement is ongoing enough that scope creep is a real risk
  • When you are the freelancer and want payment timelines documented
  • Where the contractor will see confidential information or personal data

What this document must contain

  • A written assignment of intellectual property — This is the clause the document exists for. Under the Copyright Act, 1957, an assignment must be in writing and signed. Absent it, the contractor retains ownership of what you paid for.
  • Scope of work and deliverables — What is being produced, in what format, to what standard, and what is expressly out of scope. Revisions should be bounded by number or by time.
  • Fee, payment schedule and payment window — Milestones and a stated number of days after delivery. If the contractor is a registered micro enterprise, the MSMED payment ceiling is engaged.
  • Independent contractor status — State plainly that this is not employment and carries no employment benefits. The substance of the relationship still governs, but the record should reflect the intent.
  • Confidentiality with a stated duration — Either a full clause here or a separate NDA — but not silence, where the contractor is seeing anything sensitive.
  • Termination and notice — How either side exits, what is owed for work in progress, and what happens to partially completed deliverables.
  • Named jurisdiction — One Indian city whose courts decide, agreed while everyone is still friendly.

The law that governs it

  • Copyright Act, 1957 — s. 17 — In the case of a work made in the course of employment under a contract of service, the employer is the first owner in the absence of agreement to the contrary. An independent contractor works under a contract for service, so that rule does not apply — which is why the assignment must be express.
  • Copyright Act, 1957 — s. 19 — An assignment of copyright must be in writing and signed by the assignor. An oral understanding, or an invoice marked 'full rights', does not meet the requirement.
  • MSMED Act, 2006 — ss. 15 & 16 — Where the contractor is a registered micro or small enterprise, the statutory payment ceiling and the compound interest liability apply to your payment terms as well.

Common mistakes

  • Assuming payment transfers ownership, and discovering otherwise during a fundraise or an acquisition
  • Taking an IP assignment that is not in writing and signed, so it does not meet s. 19
  • Leaving revisions unbounded, which turns a fixed fee into an open-ended commitment
  • Describing a contractor in terms that read as employment, which invites the relationship to be recharacterised
  • No confidentiality term at all, where the contractor is working inside your systems

Frequently asked questions

Do I own the work if I paid a freelancer for it?

Not automatically. Section 17 of the Copyright Act, 1957 makes the employer the first owner of work made in the course of employment, but an independent contractor works under a contract for service, not a contract of service. Ownership passes only by an assignment that, under s. 19, is in writing and signed by the assignor.

Is a freelancer an employee under Indian law?

Not if the relationship is genuinely one of an independent contractor — but the label in the contract is not decisive. Courts look at the substance: control over how the work is done, integration into the organisation, exclusivity and economic dependence. A contract that says 'contractor' while the relationship operates as employment can be recharacterised.

Does the MSME payment rule apply to freelancers?

It applies where the freelancer is registered as a micro or small enterprise under Udyam. In that case the payment ceiling in s. 15 of the MSMED Act, 2006 and the compound interest liability in s. 16 apply to your payment terms exactly as they would to any other supplier.

Should the agreement be stamped?

Where the instrument is chargeable with duty it should be stamped before execution, and rates are State-specific. Under s. 35 of the Indian Stamp Act, 1899 an unstamped chargeable instrument cannot be admitted in evidence, which is a poor position to discover during a dispute over ownership.

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