The Independent Subcontractor Agreement is essential for businesses operating in Malaysia that engage external service providers for specific projects or ongoing services. This document is designed to comply with Malaysian law, particularly the Contracts Act 1950 and related legislation, while clearly establishing a non-employment relationship. It's commonly used when companies need specialized skills, temporary assistance, or project-based work without creating an employer-employee relationship. The agreement covers critical aspects including service scope, payment terms, intellectual property rights, confidentiality, and liability provisions, while incorporating necessary safeguards to maintain the independent nature of the relationship and avoid potential misclassification issues under Malaysian employment law.
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1. Parties: Identifies and provides full details of the contracting parties - the company and the independent subcontractor
2. Background: Outlines the context of the agreement and the parties' intention to enter into an independent contractor relationship
3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty
4. Scope of Services: Detailed description of the services to be provided by the subcontractor
5. Term and Termination: Specifies the duration of the agreement and conditions for termination by either party
6. Compensation and Payment Terms: Details the payment structure, rates, invoicing process, and payment schedule
7. Independent Contractor Status: Explicitly establishes the relationship as independent contracting, not employment
8. Obligations of the Subcontractor: Lists the specific duties, responsibilities, and standards expected from the subcontractor
9. Obligations of the Company: Outlines the company's responsibilities and commitments
10. Intellectual Property Rights: Addresses ownership and rights to work product created during the engagement
11. Confidentiality: Provisions for protecting confidential information and trade secrets
12. Representations and Warranties: Statements of fact and promises made by both parties
13. Indemnification: Provisions for compensation in case of losses or damages
14. Insurance: Required insurance coverage to be maintained by the subcontractor
15. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and sets jurisdiction for disputes
16. General Provisions: Standard boilerplate clauses including notices, amendments, and severability
1. Non-Compete: Restrictions on working with competitors - include when protecting market position is crucial
2. Non-Solicitation: Prevents poaching of clients/employees - use when subcontractor has access to sensitive relationships
3. Equipment and Resources: Details about provision of tools and resources - include when specific equipment arrangements exist
4. Performance Metrics: Specific KPIs and performance standards - use for measurable deliverable-based contracts
5. Compliance with Specific Regulations: Industry-specific compliance requirements - include for regulated industries
6. Subcontracting: Rules about further subcontracting work - include when need to control delegation
7. Force Majeure: Provisions for unforeseen circumstances - important for long-term or high-value contracts
8. Data Protection: Specific data handling requirements - include when personal data processing is involved
9. Training Requirements: Specific training or certification needs - use when special qualifications are required
10. Dispute Resolution: Alternative dispute resolution procedures - include for high-value or complex relationships
1. Schedule A - Scope of Services: Detailed breakdown of services, deliverables, and specifications
2. Schedule B - Fee Schedule: Detailed pricing, payment terms, and any variable compensation structures
3. Schedule C - Service Levels: Specific performance metrics, quality standards, and response times
4. Schedule D - Company Policies: Relevant company policies the subcontractor must comply with
5. Schedule E - Equipment List: List of any company-provided equipment or resources
6. Appendix 1 - Contact Details: Key contact information for both parties
7. Appendix 2 - Required Insurance Coverage: Specific insurance types and coverage amounts required
8. Appendix 3 - Compliance Requirements: Industry-specific compliance requirements and certifications
9. Appendix 4 - Confidential Information: Specific details about what constitutes confidential information
10. Appendix 5 - Approved Subcontractors: List of pre-approved subcontractors if further subcontracting is allowed
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