Consulting Agreement Template

What is a Consulting Agreement?

A consulting agreement is a contract between the consultant and the client, highlighting the most important conditions of collaboration. It covers the types of consulting services offered by the consultant, and the pricing, along with other details, such as confidentiality, term of engagement, and assurances provided by both parties.

The consulting agreement is a legally binding contract that is signed by both parties. It usually covers controversial issues unique to the agreement, such as conflict of interest, or intellectual property rights. The main conditions of a consulting agreement are the presence of an offer, the acceptance of the offer, valid consideration, mutual assent, and legal purpose.

Consulting Agreement: What Does It Cover?

The consulting agreement is made between the client and the consultant to determine the ways of collaboration, the compensation, and timescales of the work undertaken by the consultant, and address controversial issues that might arise from the consulting position, such as:

• intellectual property rights
• confidentiality
• compensation
• damages and liability
• further assistance
• insurance
• indemnification
• assignment of work products
• clauses related to "non-compete" or "non-solicitation" agreements

In some cases, further documents accompany the consulting agreement, such as the non-disclosure agreement or a document that clarifies the legal status of the consultant.

Why is a Consulting Agreement Important?

When employing a consulting firm or an individual consultant, companies need to protect their confidential information and ensure that the service they request is delivered according to their needs. Clients must clarify what the consultancy project covers, and what constitutes as the delivery of services.

The consulting agreement also provides a legal protection for the consultant and ensures that the client is legally required to pay him for services upon completion. Contracts also often include and identify the governing laws that relate to the agreement, in case a dispute arises between the parties.

Examples: Using a Consulting Agreement

When a company is engaging with a consultant, they need to clarify the services they request, the timescales for delivery, and the compensation provided for the other party. Without this, several disagreements would arise related to the quality of the project, whether or not the consultancy service was delivered, or the general terms of the agreement.

A research company looking to launch a new product and asking a consultant to complete research on the market conditions will pay for the services, and can add a confidentiality clause to the contract. This will prevent other companies from taking advantage of the information that the client paid for, and protect the business interest of the firm that ordered the service.

Insurances are often offered in consultancy agreements in order to cover damages that are caused by an independent consultant.

Examples: Not Using a Consulting Agreement

Entering a contract without a consulting agreement can have several negative consequences. As an example, if there is no contract, the assignment of a work product is not clearly defined as the client's intellectual property. Therefore, the consultant will be within his right to use the same information for completing other assignments.

Without contracts, the payment of consultants would not be guaranteed. Consultancy agreements generally determine the conditions of fulfilling the contract and the timing of payment. A client - without a consulting contract - might claim that the service was not delivered according to the requirements, and decline payment.

Frequently Asked Questions

• Are all consulting agreements made in writing?

Most of the agreements are made in writing, to ensure that all conditions are clearly documented and defined.

• What is the "Further Assurance" clause of consulting agreements?

This clause usually covers the transfer of intellectual property rights to the employer, secure the company's rights to the information provided, and defends the client in case its intellectual property right is challenged.

• What is a Conflict of Interest clause in a consultancy agreement?

This clause covers whether or not there is a condition that influences the consultant's work product, such as association with another company and recommending their services to the client.

• Do I need to consult with a lawyer to create a consultancy agreement?

No matter if you are an independent consultant or client, the only way to protect your interest is through a consultancy agreement. It is recommended to contact a reputable consultancy law professional for advice.

Steps to Create an End User License Agreement

• Once you have selected a consultant to work on your project, define the conditions of the agreement and the desired outcome.
• Define the basic information, such as the legal status of the consultant, the term of agreement, and the consultation.
• Negotiate basic terms.
• Consult with a corporate lawyer to provide you with information on the different sections that need to be included in your agreement.
• Send the draft to the consultant for review.
• Negotiate terms.
• Get your agreement checked by a professional.
• Sign the agreement.

Common Mistakes

• The lack of clear definitions for consultant obligations and responsibilities will result in low-quality projects.
• A consulting agreement has to include the clear objectives of the project, and many companies forget to disclose this.
• Many companies forget to add clauses regarding project modifications and flexibility. This can result in misunderstanding and non-delivery.

• Not consulting with a legal professional will result in limited protection for both parties.

Would you like to protect your company's interest and intellectual property through consultant agreements? UpCounsel only employs top corporate lawyers from Harvard and Yale and has several consultancy contract resources for you to review.