Consulting Services Agreement Overview

An agreement for consulting services is a contract that covers the terms of service between a client and a consultant. These should be used when a consultant is contracted to perform a service for an individual or a business. A properly drawn agreement will protect the interests of both parties, ensuring the consultant gets paid and the customer receives the services that they paid for. On the customer end, consulting services agreements are also good for protecting sensitive information, if a non-disclosure clause is included in them.

Consulting Services Agreement Outline

Although there may be some variance from agreement to agreement, consulting services agreements generally follow the same basic outline, and that is as follows:

  1. Introduction. This will identify the parties involved in the contract and what organizations they represent. This will also briefly describe each business.
  2. Responsibilities. This will state what work the consultant party will be performing and what assistance, if any, the contracting party may render. The more detailed this is, the better.
  3. The Nature of the Relationship. This makes clear that the consultant is not working as an employee of the contracting party but as an independent contractor, which is important for tax and legal reasons.
  4. Confidentiality. This is essentially a non-disclosure agreement (NDA) and should be included if the consultant will be dealing with sensitive business information, such as trade secrets. This will help to ensure that private data is not shared with third parties.
  5. Compensation. This will set out what the consultant will be paid for their services, as well was how they will be paid and the circumstances wherein no payment will be made.
  6. Work for Hire. This grants the rights to any work created by the consultant to the contracting company.
  7. Conflict of Interest. Here the consultant affirms that it is not also working for a competitor of the contracting company while it is working for the contracting company.
  8. Term. This indicates how long the agreement will last or if it will be an ongoing agreement with no definite termination date.
  9. Termination. This states what actions or scenarios will entail termination of the contract. Usually, this will be any act that is agreed to be a breach of contract, although some contracts may allow for termination without cause, usually if due notice is given.
  10. Property Return. This describes if and how property that was used to complete the contract will be returned.
  11. Indemnification. The indemnification clause will define the responsibilities of each party in the face of unexpected problems and determine what protection each party will have from the other’s negligence.
  12. Trademark Usage. This states that the consultant will not improperly use the contracting party’s trademarks or acquire trademarks similar to those owned by the contracting party.
  13. Modification. This indicates that all changes to the contract must be made in writing and agreed to by both parties.
  14. Force Majeure. This defines what events will be considered beyond the consultant’s control (such as floods and earthquakes) and which will release them from responsibility should these events be a key cause in their failure to maintain the terms of the contract.
  15. Waver. This explains that if a party ignores the other party’s breach of contract, the ignoring party does not waive a future right to enforce the contract.
  16. Due Notice. This lists how each party may be contacted concerning legal matters.
  17. Governing Law. If the parties have a specific jurisdiction they would like legal matters to be adjudicated in, it should be stated here.
  18. Severability. This clause states that if a portion of the contract is deemed unlawful and void, it will not void the entire contract. It should be noted that some jurisdictions only allow bad provisions to be struck out, not modified.
  19. Signatures. Before any contract can take effect, it must be signed and dated by the parties concerned.

Although consulting services agreements may contain more or less clauses than those listed above, what remains true of any legal agreement is that all clauses in it should be fully understood before the agreement is signed. If you need help understanding some or all of any agreements for consulting services, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.