Do you work with consultants? Are you a consultant? How do you feel about your consulting agreement? Consulting agreements are legal contracts between a consultant and a client that outline the terms and conditions of their professional working relationship. These agreements ensure that both parties understand their roles, responsibilities, and expectations. A well-drafted consulting agreement should include several provisions to protect the interests of both the consultant and the client. Contact the Dohrwardt Law Firm if you would like to discuss your consulting agreements or would like assistance negotiating and drafting a consulting agreement.

Below, I discuss some essential provisions that should be included in your consulting agreement. 

Scope of Services: This provision outlines the specific services that the consultant will provide to the client. It should be clear and comprehensive, including any limitations or exclusions that may apply. If you envision a long general relationship with different projects, make it very clear and structure your agreement to live with the relationship through a master services approach that allows for specific work orders (statements of work) to cover each project.

Payment Terms: The payment terms should be clearly stated in the agreement, including the consultant's compensation, payment schedule, and any other expenses or reimbursements that may be incurred. As a business, pay particular attention to how long you can wait between billing and payment. If you are the consultant, push for shorter terms to ensure you get paid quickly. Refrain from unthinkingly signing off on terms here, as your cash flow may depend on these terms.

Confidentiality: A confidentiality provision ensures that the consultant will keep the client's confidential or proprietary information confidential and not disclose it to any third party. However, consultants should be careful here. An overly broad confidentiality provision may restrict the consultant from discussing their work and prevent them from discussing their experience in future marketing efforts. 

Intellectual Property Rights: This provision outlines the ownership and rights to any intellectual property created during the consulting engagement. It should be clear who owns the intellectual property and whether any licenses or assignments are necessary. Again, consultants will want to ensure these provisions are tailored to their needs. Imagine you've developed some process, algorithm, etc., that can be used for similar future work but lose your rights due to an unknowing or unnecessary assignment to a consulting client.

Termination: The agreement should include a termination provision that outlines the circumstances under which either party can terminate the contract and specifies the notice period required for termination.

Indemnification: An indemnification provision requires the consultant to indemnify the client for any damages or losses resulting from the consultant's negligence or breach of contract. Often, these provisions favor the hiring company. However, consultants will want to consider whether they should be bilateral in some circumstances.

Non-Solicitation: A non-solicitation provision prohibits the consultant from soliciting the client's employees or customers for a specified period after the termination of the agreement. As you can imagine, consultants may want to ensure these provisions are manageable so that they do not prevent the consultant from performing similar consulting work for potential clients that this provision may have implicated. 

Governing Law and Jurisdiction: This provision specifies the jurisdiction and governing law that will apply to the agreement. Ensuring the contract is enforceable and valid in the jurisdiction where it will be executed is essential.

In conclusion, a consulting agreement is a critical document that protects both the consultant and the client. It is essential to ensure that the deal includes all the necessary provisions to clarify the terms and conditions of the engagement and is manageable such that it restricts future activity. By including these crucial provisions in your consulting agreement, you can avoid potential disputes and ensure a successful and productive working relationship. Contact the Dohrwardt Law Firm if you would like to discuss your consulting agreements or would like assistance negotiating and drafting a consulting agreement.

The information provided is only for general information and is not meant to be legal advice. Information on this website, including third-party links, may be less up-to-date, so you should contact your attorney to discuss your situation. Third-party links are provided for convenience only and are not an endorsement by the Dohrwardt Law Firm.