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An employment contract is a formal agreement between an employer and an employee aimed at establishing a new employment relationship. Employees can be classified as at-will employees or independent contractors. At-will employees do not have a set contract duration and can be terminated by either party at any time. In contrast, independent contractors are hired for a specific purpose and time. The employment contract outlines key aspects of the relationship, including the duties of the employee, their classification, termination terms, compensation details, employee benefits, and the liabilities of both parties involved.