INDEPENDENT CONTRACTORS AGREEMENT Part 3: BMC #2

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Non-Liability for Actions or Inactions of Contractor:

Contractor agrees to indemnify, defend and hold Broker harmless from any and all liabilities, obligations, suits, actions, claims, losses or demands asserted against Contractor and/or Broker and any judgments, losses or damages suffered by Broker as a result of any of Contractor’s alleged intentional negligent or other wrongful acts and omissions or any other alleged wrongful conduct with respect to any other Contractors or third parties. The preceding shall include reimbursement of any deductible or premium rating upon Broker’s professional liability policy incurred because of any transaction of Contractor’s and shall include any attorneys fees and costs incurred in defending claims in front of the Real Estate Department or the Board of REALTORS®.

This provision establishes that the contractor will indemnify, defend and hold harmless the broker from any and all liabilities, obligations, suits, actions, claims, losses or demands against the contractor for any negligent acts, wrongful acts, omissions and any other alleged wrongful conduct.  It establishes that this shall include reimbursements for of any deductible or premium rating upon the broker’s professional liability policy incurred because of any transaction of the contractor’s and include attorney’s fees and costs incurred in defending against these actions.

1099 Certificate.

As soon as possible, Contractor will execute an IRS Form W-9 reflecting Contractor’s tax identification number and Broker shall subsequently provide with an annual completed IRS 1099-MISC form.

This establishes the requirement that the contractor provides the broker an IRS W-9 form that provides the contractor’s tax identification number and after that will provide the broker an annual IRS 1099 MISC form.  This, of course, would not apply to a salesperson who is a traditional employee.

Quick Quiz

Fill in the Blank:
As soon as possible, will execute an IRS Form W-9 reflecting Contractor’s tax identification number and shall subsequently provide Broker with an annual completed IRS -MISC form.

Transfer of Listings

[Optional:] In the event that Contractor terminates his/her contractual relationship with images-2Broker for any reason, any and all listings obtained through the efforts of Contractor during the term of this Agreement, shall be transferred (upon prior written approval of the owner) to Contractor or to Contractor’s new employing broker, on Contractor’s behalf. Contractor agrees to continue to fully cooperate with Broker as necessary to resolve any transactions, claims or disputes which are pending at the time, or which arise after, Contractor’s contractual relationship with Broker terminates.

This optional provision establishes how any listings that are allowed to be transferred to the contractor to his or her new place of employment will be transferred to the new broker.  Since listings are the property of the broker, this is totally at the broker’s discretion.

Confidential Information:

[Optional:]Contractor acknowledges that all actual and potential customer/client information including but not limited to marketing information and contracts (and no matter the form such as a computer disk, “hard copy” or otherwise) of Broker is confidential, unique and valuable and was developed by Broker at Broker’s cost, and that disclosure of any such information would cause Broker irreparable injury. Contractor agrees such items include, but are not limited to, client and customer lists, marketing information, phone numbers, files, computer client and customer information and other data. Contractor agrees during the term of this Agreement and for one (1) year following termination, whether with or without cause, that Contractor will not in any manner, either directly or indirectly, divulge, disclose or communicate to any person or business any such information, as Broker and Contractor acknowledge such information affects the successful conduct of the business of Broker and Broker’s goodwill. Contractor agrees such confidential information means all information that is not available generally to the public, is useful to the current or anticipated business of Broker, or has been identified as confidential. It is agreed to confidential information includes but is not limited to “trade secrets” as defined under Arizona law. Contractor agrees that upon termination of this Agreement for any reason whatsoever, to promptly return to Broker all confidential items. It is understood that this restriction does not include general skills, knowledge, and experience which Contractor may use after termination. Upon termination for any reason, Contractor in addition to returning such confidential information agrees not to maintain a copy of such confidential information in any form whatsoever and agrees not to provide a copy of such to anyone or any entity.

This provision identifies any proprietary information that is the broker’s property and the obligation of the contractor to keep this information confidential.  This information includes but is not limited to client/customer lists, marketing information, phone numbers and e-mail addresses, files, and computerized customer and client information.  The contractor also agrees to not make contact with any of these parties for a certain period after his or her termination.

Broker Prohibition on Solicitation of Employees and Contractors of Broker.

[Optional:]Contractor agrees during the term of this Agreement and for a period of one (1) year from the date of termination, not to, directly, or indirectly, solicit, induce or encourage any contractor and/or employee of Broker to terminate such arrangement with Broker or to accept a service type contract with any other Broker, including, but not limited to, any competitor of Broker.

Quick Quiz

Fill in the Blank:
This provision identifies any information that is the broker’s property and the obligation of the contractor to keep this information .  .

Non-Solicitation of Customers/Clients of Broker:

download[Optional:]It is agreed during the term of this Agreement that Contractor shall not solicit or contact, directly or indirectly, any customer/client of Broker, whether or not Contractor was involved with any transaction with such customer/client of Broker. The parties agree that the following termination, Contractor shall not contact, directly or indirectly, any customer/client of Broker, whether or not Contractor was involved with any sale with such customer/client of Broker during the term of this Agreement. It is agreed such restriction shall apply for a one (1) year period following termination and shall also apply to any customer/client obtained by Broker during that one (1) year period which Contractor had not previously made any contact before Broker has obtained a business relationship with such customer/client generated in the one (1) year following termination. The parties agree that this restrictive provision shall have a geographical scope to include the State of Arizona.

This provision effectively prohibits a contractor from soliciting any employee or contractor of the broker to terminate with the broker to go work for the competing broker.  There is usually a defined period (i.e., one year) after the contractor’s termination that the contractor has agreed not to do this.

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