What is a consulting contract?
When crafting a consulting agreement, it's important to cover all the necessary bases.
If you're unsure, using a consulting agreement template can help you to make sure you've included all the important details, in order to protect you and your business.
Fortunately, this simple guide has expert advice on drafting a consulting services contract that works for both you and your clients.
Consulting agreements define the working relationship between consultants and their clients.
They cover all the key terms and conditions - including but not limited to:
- The exact services the client is purchasing.
- When the work will be completed.
- How the consultant should be compensated.
The agreement must be accepted by every involved party.
If you're concerned about ensuring your document includes everything you need, then contract templates can be invaluable.
What should a consulting contract template include?
When you're trying to draft contracts, knowing exactly what you need to include is vital. This comprehensive list covers all the key clauses, and why you need them:
Consultant and Client Details
This includes all basic details such as client name, consultant company name, postal addresses and contact information.
Description of Consulting Services
This section will underpin your entire agreement. It will give you, as a consultant, the opportunity to fully define your services, and layout any associated terms and conditions.
It's a good idea to write out each of the services you will be performing - highlighting what they are, when they will happen, and what products or materials you may pass on to the client.
As a consultant, remember the more detailed your description, the less likely you are to run into issues further down the line.
Total Costs and Payment Terms
It's essential that you clearly define your payment conditions within your consultant agreement, to ensure that you're compensated fairly for your services.
Make your cost breakdown as accurate as you can. List all costs associated with your service, and provide your client with an accurate total. If you must estimate any costs, keep the figure as realistic as possible, and highlight that is an estimate that may be subject to change.
You should also stipulate how and when your client needs to compensate you for your services, especially if you require a deposit or multiple payments over time.
Schedule of Services
Scheduling issues are a common cause of conflict - so ensuring both parties are able to define their expectations early on can be very beneficial.
Use the itemized list you provided in your Description of Services to guide you when writing this section. Indicate how long each task will take, and provide completion dates for each stage of the service - in addition to a final completion and payment date.
It is also important to stipulate whether your plan is subject to change, and what your team will do in the event that work falls behind schedule. This agreement shall come with the expectation that timings will be kept up to date with the term agreed upon.
Business Permits and Licenses
This section must outline all documents required to complete the work - such as work permits. You should also stipulate who is responsible for obtaining these licenses and ensuring they remain valid for the duration of the service.
You must also define who owns any intellectual property created during the service, and how it may be licensed for reproduction or future use.
In the event that one party wishes to terminate this agreement or violate its terms in any way, you must detail how the conflict will be resolved, and in what circumstances the consultancy agreement may be changed or ended early.
You should also stipulate any costs or compensation that may be incurred there ends up being the termination of this agreement due to the actual term of this agreement not being followed, and the period of notice required by both consultant and client.
This section will outline which party is responsible in the event of damages or agreement violation.
It should also define who is liable to cover any associated costs or losses, especially if a third party becomes involved.
The confidentiality clause should define how proprietary information or sensitive content is handled and utilized by all involved parties.
You must stipulate whether Non-Disclosure Agreements are required, and how confidential information will be distributed across parties.
Signature of All Involved Parties
This should include the dated signatures of all involved employees, indicating that they accept the terms of the agreement document.
Why is having a consulting contract important?
Having a consulting services agreement shall help tremendously for several reasons.
Firstly, it ensures that all parties agree on the particulars of a service before the work is begun. This way, you're far more likely to have a positive working relationship, and won't have to worry about miscommunication.
It's also one good way for everyone to define their expectations. The consultant can stipulate their time, resource, and payment requirements - whilst the client can highlight what they wish to gain from the service.
Finally, a consulting agreement is the best way to account for logistical issues that may arise during the working relationship. For example, both parties can define how they require confidential information to be handled, and you can iron out issues surrounding intellectual property and contract termination.