This agreement is for direct sellers such as traveling salespeople who are paid by commission only. Such salespeople are statutory ICs for IRS purposes if they sign an IC agreement. This means you don’t have to withhold or pay employment taxes for them. (See Federal Taxes and the IRS Rules for more about statutory ICs.)
You need to describe in the agreement what product or merchandise the salesperson will sell. If you give the worker other duties besides selling on commission, the worker will lose his or her statutory IC status.
These salespeople are statutory ICs only if they are paid solely by commission, not on the number of hours worked. The agreement provides for this type of payment.
The agreement also provides that the worker will provide all necessary equipment, but you are permitted to provide sales forms.
Traveling salespeople usually travel by car. This agreement requires the salesperson to have car insurance and to list you as a named insured on the policy. This can make it easier for you to collect if there is an accident. The salesperson also agrees to indemnify you—that is, repay you—if he or she gets into an accident and the victim sues you.
Since salespeople often have to be given access to your valuable customer lists, the agreement requires the salesperson to keep such information confidential.