This Consulting Agreement Contract is being entered into by [Company] (“Client”) and [Consultant] (“Consultant”) this ____ day of ______________, 20__.
1. Work to be Performed.
[Describe job duties and what is to be performed].
[ _____] Client shall pay Consultant $ _____ per hour due on or before the first Friday following the end of any week in which Consultant performs services for Client.
[______] Client shall pay Consultant a flat fee of $__________ as total compensation for the project described below. Payment shall be made as follows:
a. $_________ due before work will begin, and
b. $_________ due upon receipt of final deliverable.
3. Independent Contractor Relationship.
Consultant's relationship with Client will be that of an independent contractor, and nothing in this Consulting Agreement is intended to, or should be construed to, create a partnership, agency, joint venture, or employment relationship. No part of Consultant’s compensation will be subject to withholding by Client for the payment of any social security, federal, state, or any other employee payroll taxes.
4. Ownership of Work Product.
Consultant agrees that all work product developed by her alone or in conjunction with others in connection with the performance of services pursuant to this Consulting Agreement is and shall be the sole property of Client, and Consultant shall retain no ownership, interest, or rights therein. Work product includes but is not limited to reports, graphics, memoranda, slogans, and taglines.
5.1 Confidential Information. "CONFIDENTIAL INFORMATION" as used in this Agreement shall mean any and all technical and nontechnical information including patent, copyright, trade secret, proprietary information, computer files, and client information related to the past, current, future, and proposed services of Client and includes, without limitation, Client property, and Client's information concerning customers, research, financial information, purchasing, business forecasts, sales and merchandising, and marketing plans and information.
5.2 Nondisclosure and Nonuse Obligations. Consultant agrees to protect the confidentiality of all Confidential Information and, except as permitted in this section,onsultant shall neither use nor disclose the Confidential Information. Consultant may use the Confidential Information solely to perform consulting services under this Agreement for the benefit of Client.
5.3 Exclusion from Nondisclosure and Nonuse Obligations. Consultant's obligations under Section 5.2 ("NONDISCLOSURE AND NONUSE OBLIGATIONS") with respect to any portion of the Confidential Information shall not apply to any such portion that Consultant can demonstrate (a) was in the public domain at or subsequent to the time such portion was communicated to Consultant by Client; (b) was rightfully in Consultant's possession free of any obligation of confidence at or subsequent to the time such portion was communicated to Consultant by Client; or (c) was developed by Consultant independently of and without reference to any information communicated to Consultant by Client. A disclosure of Confidential Information by Consultant, either (i) in response to a valid order by a court or other governmental body, (ii) otherwise required by law, or (iii) necessary to establish the rights of either party under this Agreement, shall not be considered a breach of this Agreement or a waiver of confidentiality for other purposes, provided, however, that Consultant shall provide prompt written notice thereof to Client to enable Client to seek a protective order or otherwise prevent such disclosure.
6. General Provisions.
6.1 Governing Law. This Consulting Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the State of _________. Each of the parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in Indiana, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to enforce any order or any judgment of such federal or state courts located in _________, such personal jurisdiction shall be nonexclusive.
6.2 Severability. If any provision of this Agreement is held by a court of law to be illegal, invalid, or unenforceable, (a) that provision shall be deemed amended to achieve as nearly as possible the same economic effect as the original provision, and (b) the legality, validity, and enforceability of the remaining provisions of this Consulting Agreement shall not be affected or impaired thereby.
Relief for Breach.
Consultant agrees that her obligations under this Agreement are
of a unique character that gives them particular value;
Consultant's breach of any of such obligations will result in
irreparable and continuing damage to Client for which there
will be no adequate remedy at law; and, in the event of
such breach, Client will be entitled to injunctive relief
and/or a decree for specific performance, and such other and
further relief as may be proper, including monetary damages if
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What is a Consulting Agreement?
A consulting agreement is a contract between the consultant and the client, highlighting the most important conditions of collaboration. It covers the types of consulting services offered by the consultant, and the pricing, along with other details, such as confidentiality, term of engagement, and assurances provided by both parties.
The consulting agreement is a legally binding contract that is signed by both parties. It usually covers controversial issues unique to the agreement, such as conflict of interest, or intellectual property rights. The main conditions of a consulting agreement are the presence of an offer, the acceptance of the offer, valid consideration, mutual assent, and legal purpose.
Consulting Agreement: What Does It Cover?
The consulting agreement is made between the client and the consultant to determine the ways of collaboration, the compensation, and timescales of the work undertaken by the consultant, and address controversial issues that might arise from the consulting position, such as:
- intellectual property rights
- damages and liability
- further assistance
- assignment of work products
- clauses related to "non-compete" or "non-solicitation" agreements
In some cases, further documents accompany the consulting agreement, such as the non-disclosure agreement or a document that clarifies the legal status of the consultant.
Why is a Consulting Agreement Important?
When employing a consulting firm or an individual consultant, companies need to protect their confidential information and ensure that the service they request is delivered according to their needs. Clients must clarify what the consultancy project covers, and what constitutes as the delivery of services.
The consulting agreement also provides a legal protection for the consultant and ensures that the client is legally required to pay him for services upon completion. Contracts also often include and identify the governing laws that relate to the agreement, in case a dispute arises between the parties.
Examples: Using a Consulting Agreement
When a company is engaging with a consultant, they need to clarify the services they request, the timescales for delivery, and the compensation provided for the other party. Without this, several disagreements would arise related to the quality of the project, whether or not the consultancy service was delivered, or the general terms of the agreement.
A research company looking to launch a new product and asking a consultant to complete research on the market conditions will pay for the services, and can add a confidentiality clause to the contract. This will prevent other companies from taking advantage of the information that the client paid for, and protect the business interest of the firm that ordered the service.
Insurances are often offered in consultancy agreements in order to cover damages that are caused by an independent consultant.
Examples: Not Using a Consulting Agreement
Entering a contract without a consulting agreement can have several negative consequences. As an example, if there is no contract, the assignment of a work product is not clearly defined as the client's intellectual property. Therefore, the consultant will be within his right to use the same information for completing other assignments.
Without contracts, the payment of consultants would not be guaranteed. Consultancy agreements generally determine the conditions of fulfilling the contract and the timing of payment. A client - without a consulting contract - might claim that the service was not delivered according to the requirements, and decline payment.
Frequently Asked Questions
- Are all consulting agreements made in writing?
Most of the agreements are made in writing, to ensure that all conditions are clearly documented and defined.
- What is the "Further Assurance" clause of consulting agreements?
This clause usually covers the transfer of intellectual property rights to the employer, secure the company's rights to the information provided, and defends the client in case its intellectual property right is challenged.
- What is a Conflict of Interest clause in a consultancy agreement?
This clause covers whether or not there is a condition that influences the consultant's work product, such as association with another company and recommending their services to the client.
- Do I need to consult with a lawyer to create a consultancy agreement?
No matter if you are an independent consultant or client, the only way to protect your interest is through a consultancy agreement. It is recommended to contact a reputable consultancy law professional for advice.
Steps to Create an End User License Agreement
- Once you have selected a consultant to work on your project, define the conditions of the agreement and the desired outcome.
- Define the basic information, such as the legal status of the consultant, the term of agreement, and the consultation.
- Negotiate basic terms.
- Consult with a corporate lawyer to provide you with information on the different sections that need to be included in your agreement.
- Send the draft to the consultant for review.
- Negotiate terms.
- Get your agreement checked by a professional.
- Sign the agreement.
- The lack of clear definitions for consultant obligations and responsibilities will result in low-quality projects.
- A consulting agreement has to include the clear objectives of the project, and many companies forget to disclose this.
- Many companies forget to add clauses regarding project modifications and flexibility. This can result in misunderstanding and non-delivery.
- Not consulting with a legal professional will result in limited protection for both parties.
Would you like to protect your company's interest and intellectual property through consultant agreements? UpCounsel only employs top corporate lawyers from Harvard and Yale and has several consultancy contract resources for you to review.