Signing an independent consultant agreement is not an option to any serious professional. The agreement gives the arrangement between the consultant and client the legal basis to proceed as envisaged. Without it, one of the two parties involved could ignore doing what’s expected of them. The agreement clarifies things and eliminates the possibility of confusion. For the most part, the independent consultant agreement deals with the following issues:
- the services the consultant will provide
- the deadlines the consultant has to meet
- when the consultant will be paid, which includes late penalties for not being paid on time
- how much the consultant will be paid
- explanation on the party that will cater for the expenses
- an understanding that the client-independent consultant relationship exists
- a statement and proof about the presence of a valid liability insurance from the consultant
- explanation on how the two parties will resolve any emerging disputes
More importantly, independent consultants need to understand every issue that the agreement tackles. For example, the agreement clearly protects the consultant’s intellectual property. All consultants (who are basically contractors) own the copyright to all the works they create. It’s worth mentioning, however, that some clients might want to take over complete ownership of the works the consultant creates. They may even insist on indicating this on the agreement.
Signing the copyright over to the client is giving up one benefit of being a consultant.
The agreement should not leave any doubt about your status as an independent consultant. For the most part, independent consultants have more control of what they do and how they do it. In this regard, independent consultants are completely different from employees. Such issues should appear clearly on the agreement. Some of the controls the contractor needs, and which must appear on the independent consultant agreement, include the following:
a) control of time
b) control of place
c) controlling how the work is to be done
What tools will you use? Who will provide the tools? These questions might appear mundane but the truth is they aren’t. Every issue, no matter how insignificant it seems, must feature in the agreement. Also, it’s worth understanding that the issue of tools and equipment helps clarify your status. For example, independent consultants should move around with their own tools and equipment. If the client provides everything, then you can refer to yourself as an employee.
A well-drafted and thought out independent consultant agreement is not ambiguous where the contractor’s assistants are concerned. All independent consultants have the freedom and leeway to appoint or choose their preferred assistants. Employees, on the other hand, do not have such privileges. Also, it’s worth mentioning here that consultants are free to choose between working alone or hiring as many assistants as they deem fit for the project.
Independent consultants differ from employees in terms of undergoing evaluation for:
b) details of work
c) method of working
Independent consultants undergo evaluation specifically for results and not procedures.
The independent consultant agreement should always be in writing. Without putting everything down in writing, the agreement will not provide the legal protection the independent consultant needs before commencing any project. Without legal protection, it becomes harder for consultants to follow up with their clients on issues such as lack of payment. Oral agreements are horrible because of the costly misunderstandings and confusion they often perpetuate.
It’s important for freelance contractors to sign independent consultant agreements with their clients. More importantly, the agreement should be done right and feature all the commonly recognized aspects that protect the independent consultant. The agreement should include length of the contract, project description, payment terms, non-disclosure terms, rights and responsibilities of the two parties, termination clause, and disclaimers.