A consulting agreement is a contractual document that describes a working relationship between a business and a consultant providing that company with their services. Other terms that are used to refer to a consulting agreement include:
The consulting agreement explains the terms of the professional relationship as a method for keeping both parties accountable when it comes to the type of work and compensation expected. Having a consulting agreement when contracting the services of an outside advisor or specialist is a standard part of running a business and helps protect your company from possible disputes.
Any time you're paying an outside candidate to work for your business, draw up a consulting agreement. While some people are used to verbal contracts, having a written record of the agreement keeps both parties accountable and ensures that an untrustworthy person doesn't accept payment without delivering their services appropriately.
Have your consultant sign a consulting agreement prior to hiring them for the job so that you can start off your professional relationship on the right foot. If problems arise later on, you can reference the consulting agreement for guidance.
This section defines the specific services that will be provided by the consultant. It should be detailed and clear, giving the client a good expectation of deliverables and timelines.
This section outlines how the consultant will be paid by the client. It may include the rate (ex: hourly rate, flat fee rate, etc.), payment schedule, invoicing details, and how expenses are handled.
This section details the type of information the parties may need to keep confidential throughout the engagement. Often, consultants become exposed to sensitive business information they will be required to keep confidential.
This section outlines how long the agreement between the client and consultant will last, or the terms under which it can be terminated.
Throughout many consulting engagements, work is produced that could be considered intellectual property (IP). This section details who owns the rights to the IP.
This section protects both parties from legal harm. The consultant agrees to indemnify the client against certain legal claims, and vice versa. It may also limit the liability of either party in case something goes wrong.
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