You use this agreement anytime you're bringing on a freelancer to help in some area of your business. Think, a graphic designer, a copywriter, a social media manager, or a virtual assistant.
The independent contractor is not an employee and will receive a 1099 at the end of the year for any work they did for you. With this agreement you specify the services they're going to provide, the payment rate and terms, and reiterate that they're not an employee and not eligible for employee benefits.
You also will include clauses on non-solicitation, work product ownership and confidentiality, but don't worry those are already written for you.