What Do Fractional Contracts Typically Look Like?

NOTE: If you want a very thorough guide that walks through exactly how to create a fractional work contract, then see our Playbook How to Create a Contract for a Fractional Work Engagement. This article below serves only as a high-level summary.

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A standard IC Agreement is a solid starting point, but fractional work has a few nuances you’ll want to address explicitly:

• Contract length
• Compensation & payment terms
• Scope of work
• Time commitment
• Cancellation
• Mutual NDA

If you don’t have an IC Agreement Template, we recommend this one from Common Paper.

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Length of a Fractional Contract

Fractional engagements are usually ongoing, so contracts are commonly structured one of two ways:

• Month-to-month: Automatically renews unless canceled
• 3-month term: Requires renewal at the end of the term

Both are common. When in doubt, Fractional Jobs recommends a month-to-month contract for its extra flexibility. As trust builds, longer terms like 6 or 12 months become more typical.

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Compensation & Payment Terms

There are two common ways to compensate fractional talent, a monthly retainer or an hourly rate, which you can [read about in detail here]. This should be clearly stated on the contract.

Some fractionals require payment upfront (common with agencies too). Others invoice after work begins, with prompt payment expected.

Avoid Net 30+ payment terms (meaning the contractor gets paid 30 days after sending the invoice) at all costs. This creates unfair cash flow problems for fractional workers.

Either agree for the fractional worker to be paid up front before work begins, OR agree to prompt payment on receipt of invoice (e.g. Net 7).

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Scope of Work

Some contracts spell out detailed deliverables; others keep scope high-level. One common practice is to actually attach the Proposal (if it includes a Scope of Work), in an Appendix. For more details on how to create a proposal, [see here.]

Choose the level of detail that both parties are comfortable with.

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Time Commitment

Because fractional work is part-time, contracts usually include an expected time commitment tied to compensation, such as:

• $10,000/month for  up to ~10 hours/week
• $200/hour for 5 hours/week

This sets expectations and helps prevent misalignment. The hours are a guide, some fluctuation is normal as trust and rhythm develop.

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Cancellation Clauses

A cancellation clause allows either party to end the contract if needed. They’re exceptionally common in fractional work contracts. For month-to-month contracts, 15- or 30-day notice periods are most common.

Unless there is good reason, cancellation clauses should always be the same for both parties.

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Mutual NDA

A mutual NDA ensures both sides protect confidential information, use it only for the engagement, and follow reasonable security practices. Public or independently known information is excluded, and trade secrets typically remain protected indefinitely.

This was a high-level breakdown, but if you want a more detailed guide, see our Playbook here.

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