What is a Consulting Agreement?
A consulting agreement–or consulting services agreement or contract–is the start of your business relationship with a client. It's a written document that outlines a service agreement between a consultant and a client.
The consulting agreement is tremendously important as it’s where you'll specify the services you plan to provide, at what rate you’ll provide them, and for how long. This way, both parties have an idea of what the business venture will look like.
As an independent contractor, you need to ensure that your services will be appropriately valued and remunerated, and that you're legally protected if things go south. A legally-vetted consulting agreement that states the basic information for a project is a strong first step. Then, depending on the governing law, you can create a consulting contract that protects both yourself and your client.
By having a consulting services agreement, you're making the best decision you can before even starting the work–and isn't that nice? The best part yet: by making your agreement using an online template, you're saving yourself time, effort, and you're protecting the environment too!
Note: Create your agreement with an easy-to-use and professional online template by signing up for free today. Not only are there agreement and contract templates galore on Bonsai, but there's also a wide variety of business proposals, quotations, and invoice templates to help your business deliver professional looking documents.
What to Include in the Consulting Agreement
Now that you understand what a consulting services agreement is, you might be wondering what sort of information you'll need to include in this legal document before sending it off for written consent.
Broadly speaking, all agreements have the same basic information. That's why, regardless of if you're a consultant or an architect, you'll need to learn how to write an agreement. However, here we'll focus on the main things you need to make your consulting services agreement complete and concise.
Here are the essential elements to include in your consulting agreement:
- Basic information
- Terms and definitions
- Services provided
- Timeline
- Payment details
- Intellectual property and confidentiality
- Non-exclusivity
- Termination
- Dispute resolution
Let's dig a little deeper and understand what each section should address:
Contact information
First thing’s first, you need to correctly identify the involved parties—that way there’s no room for confusion or avoidance. State legal names, business addresses, emails, telephones, and any other important details that governing law requires your agreement to have.
This is not only important to know who you’re dealing with—it’s important to be able to identify the parties in case of legal action. It’s always good for the parties to know how to address and reach each other.
It’s unlikely nowadays that you’re able to just walk a few blocks to your client's office—having this information ensures both parties will communicate through the right platforms and addresses.
Terms and definitions
Legal terms will be used throughout the entire agreement, so you better make sure both parties acknowledge and understand what those terms mean.
Without clarifying what the terms and their definitions will be, you might fall into two classic traps:
- Using language and words that are legally inaccurate and won't hold up in court–if needed and not solidified with a contract.
- Using too much legal jargon to the point that no one can understand the document without a trip to law school.
To avoid these mistakes, you want to check with your legal assessor about the terms you wish to use–make sure they apply to your country or region.
Bonsai top tip: Once you send the agreement to your client, ask them if they agree with the terms and definition section. This way, they see you’re not trying to bamboozle them with some tricky words or ambiguous terms, but that you want to make sure everyone's happy with the language used–look at you being a great business partner right from the start!
Services provided
Since the agreement is for you to provide consulting services, you need to explain all the services on offer. Make it as detailed as possible by thinking about some key questions:
- What services are you offering?
- What must the client provide to enable you to provide your services?
- What deliverables will the client receive?
- What services will you not include in a consultation?
- Are your services only for a specific project or for a particular time period?
Specifying all these details ensures that both the client and the consultant agrees on what’s involved in the business venture. Most importantly, prior to signing the document, all parties involved will have the opportunity to discuss and change these terms of the consultant’s services.
Maybe when you sent out the proposal or spoke on the phone with your client, they thought you would provide constant support to their company for X amount of time. However, the agreement details it's only for a specific project—they can discuss with you and better define the scope of the contract.
Timeline
Depending on the services you'll be providing, you might need to give a specific timeline. Where possible it’s better to give some important dates and timelines, such as when they can expect to receive deliverables or the project completion date.
Time is precious for every business—the more you show how it will be managed, the better you’ll both be able to plan ahead.
Payment details
As a freelance consultant, you need to ensure that the payment terms, payment schedule, and payment method are clearly stated. This ensures you receive adequate remuneration for your work.
Provide a fee summary: state your services and any reasonable legal fees you need to add. Additionally, depending on the work you'll do for your client, mention how any project-related expenses incurred by the independent contractor will be paid.
Bonsai top tip: Don't forget to mention when payments are expected, how will late-payments be handled, and the currency you'll be working with.
Intellectual property and confidentiality
Depending on the consulting services you provide, you'll need some specific details on how you’ll approach intellectual property and confidential information.
Ensure you state how IP and confidential information will be handled–some confidentiality agreements are valid even after the consulting services stop.
Trade secrets and confidential information of businesses are a huge deal, so they need to be taken very seriously. Adding a specific clause for it in your agreement is key for a comprehensive agreement.
Non-exclusivity
If you're a freelance consultant, you might want to work with various clients simultaneously. If this is the case, you'll need a non-exclusivity clause. In it, you'll specify that you’ll be working on other projects and building new business relationships.
Of course, this is only if you plan on working for other clients. If not, adding this section won't be necessary.
Termination
All good things must come to an end. This section outlines how either party can go about prematurely terminating the agreement. It details the terms under which termination is acceptable, and the official process for ending the agreement.
You hopefully won’t need to terminate the agreement, but it’s important to be prepared nonetheless. This gives both you and the client peace of mind.
Dispute resolution
Everyone that starts a business venture, or a client-consultant relationship is looking to get the most and the best out of the relationship. However, that doesn’t mean things can’t turn sour along the way.
Although you might not think any problems will arise, you can't see the future—a dispute resolution section in your agreement means you don’t have to. It protects you in the case of disagreements and provides details on how any disputes should be handled.
In this section, you'll mention how to resolve issues before going to court.
After all, it's always best to avoid the courtroom–it isn't worth the hassle, fees, or delays that it entails.
Governing law
In this section, you have to mention the applicable law of the agreement, from which country, province, or state. This ensures that when the agreement playbook is needed, you know which one to check.
How to Write a Consulting Agreement
There are two ways for you to write a consulting agreement. You either stare at a blank page and struggle to build it from scratch, or you use a simple consulting agreement template. The second option not only sounds better, but it also saves you precious time and shiny dollars!
If you’re going to go at it alone, you need to watch out for some common mistakes.
Avoid common mistakes when using an agreement template
Agreement templates, as we've seen, are a great way to save you time and effort when drafting lengthy legal paperwork. However, there are some important things to watch out for:
- Not legally vetted: make sure top lawyers have legally vetted the template you’re using to ensure you're truly protecting yourself and your client with the document.
- Forget to proofread: many will get so comfortable using a template that they will make silly mistakes like typos, not changing the client's name, and even sending the incorrect payment details.
- Using the wrong terms and definitions: when using a template, it's easy to think that because you've found it online that it will apply everywhere. That's not always the case; some templates include terms and information that are country/region-specific and won't work in other areas.
As the agreement is the first step in your joint venture together with your client and all the other parties involved, you want to make sure it is right from the start.
Falling for those common mistakes is easy, but once you know what you’re looking for it's even easier to avoid them. All you need to do is ensure your agreement is:
- Legally vetted
- Proofread before sending
- Complete and includes everything you need for your country/region
That's it. Follow those three easy steps, and you'll have the perfect agreement template to wow your clients and have them sign it in a heartbeat.
Creating a Consulting Agreement is Simple with Bonsai
Bonsai’s platform helps you avoid these simple mistakes with fully-vetted and comprehensive agreement templates. It’s no wonder that 500,000+ freelancers and SMBs already use the platform to keep track of their businesses.
Here’s why Bonsai should be your top choice for a consulting agreement template:
- It's 100% customizable and ready in a matter of minutes
- It includes all the necessary information to protect you, your client, and your business
- It looks professional so that you can look professional
- It provides online signature options and signature notifications
- It lets you integrate your agreement into your invoicing process on Bonsai
With Bonsai, you can create a sample consulting agreement, contract, invoice, quote, and more with none of the hassle of starting from scratch. Plus, you do it all from the same dashboard—simple.
Consulting Agreement Template FAQs
Do I really need a consulting agreement?
If you want to grow your business, ensure a professional image, and protect yourself legally, yes. A consulting agreement gets prior written consent from the involved parties, and allows you to work securely on new business projects—use a template to make the whole process easier.
What should a consulting services agreement include?
You'll need to add some specific information for your consulting services agreement.
Here are the essential elements to include in your consulting agreement:
- Basic information
- Terms and definitions
- Services provided
- Timeline
- Payment details
- Intellectual property and confidentiality
- Non-exclusivity
- Termination
- Dispute resolution
- Governing law
Ready to start? All you have to do is sign up to Bonsai, download, edit, and send your agreement to be electronically signed by your client.
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