A consultant is an independent worker that is hired by a company or other individual to perform a service. They are typically an expert in a certain area, and are hired for a specific project. When a consultant is entering into a contract with a business or individual, it is important to have a consulting agreement (also called: consulting services agreement, consulting contract, or business consulting agreement) in place. A consulting agreement is a binding legal agreement but is also a point of reference for both the consultant and the client. Additional purposes of a consulting agreement are to define the terms of the agreement with the client, legally protect the consultant and the client, and it shows the client that the consultant is professional.
Common items that should be included in the consulting agreement are:
- Name of the consultant and the party hiring the services
- Relationship between the two parties typically for tax purposes (stating you are a consultant and not an employee)
- A detailed description of the services to be performed, including the client’s expectations
- Payment terms and billing rate
- Dates of services and expected completion
- Termination agreement
- Standard of conduct
- Fees and reimbursements
- Liability and Insurance
- Other provisions (ie: waiver of breach, governing law, and dispute resolution)
Often times a consultant will see confidential information within a business so other agreements such as nondisclosure agreements and noncompete agreements. It is also important that there are additional agreements that protect any type of intellectual property. There may also need to be a clause that states who owns a work product, if the services being provided in fact contain a product.
Failure to provide the services that are laid out in the consulting agreement can result in breach of contract and litigation. The attorneys at JUX work with consultants to draft strong consulting agreements that cover all necessary details, protect the consultant, avoid litigation, and help them be successful.