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The Preferred Contractor Agreement is designed for businesses operating in the Philippines that regularly require specialized services but prefer to maintain contractor relationships rather than employment arrangements. This document establishes a framework where a contractor is given preferred status for providing specific services, ensuring compliance with Philippine labor laws, particularly the Labor Code and Department Order No. 174-17. The agreement includes comprehensive provisions for service delivery, payment terms, intellectual property rights, and confidentiality while maintaining the contractor's independence. It's particularly useful for companies seeking to build long-term relationships with skilled professionals while avoiding misclassification risks under Philippine employment law. The Preferred Contractor Agreement also addresses crucial elements such as tax obligations, social security requirements, and data privacy compliance under Philippine regulations.

1. Parties: Identifies the contracting parties - the company and the contractor, including their complete legal names and addresses

2. Background: Explains the context of the agreement, including the company's business, the contractor's expertise, and the intention to establish a preferred contractor relationship

3. Definitions: Defines key terms used throughout the agreement for clarity and consistency

4. Appointment and Scope: Establishes the contractor's appointment as a preferred contractor and outlines the general scope of services

5. Term and Renewal: Specifies the initial term of the agreement and any renewal provisions

6. Services and Performance Standards: Details the services to be provided and the expected quality standards

7. Contractor Status: Clearly establishes the independent contractor relationship and disclaims any employer-employee relationship

8. Fees and Payment Terms: Specifies the contractor's rates, payment schedule, and invoicing requirements

9. Tax and Social Security Obligations: Outlines the parties' respective tax and social security responsibilities under Philippine law

10. Confidentiality: Protects confidential information shared during the engagement

11. Intellectual Property Rights: Addresses ownership and usage rights of work products and pre-existing IP

12. Non-Competition and Non-Solicitation: Includes reasonable restrictions on competitive activities and solicitation

13. Termination: Details the circumstances and process for ending the agreement

14. General Provisions: Contains standard boilerplate clauses including governing law, notices, and amendments