A Consultant Agreement is a services contract between a business and a client. It describes the services that will be completed for the client and the conditions attached to those services. Having a Consultant Agreement makes your agreement clear and helps to avoid disagreements later. Here are the main topics in a Consultant Agreement:
A clear description of the services the consultant will do
Payment terms
Insurance requirements (if any)
Ownership of the services and intellectual property, like the copyright and other intellectual property rights to the work created by the consultant
Confidentiality promises
Any non-competition promises you want to include
Limits on liability and who will be responsible for any claims that come up
Who needs it
Consultants, professionals, and other service providers
Freelancers, like copy writers, graphic designers, and others
Coaches, instructors, and guides
Marketers and other agencies
Businesses hiring a consultant
... and other services-based companies or clients
When you need one
When you start your services for a customer or client.
If you’re a consultant, you should have a contract with your client anytime you start to provide your services to them. Your Consultant Agreement is your legal agreement with your customer or client. Having a contract makes it clear what work you will do, how it will be done, when you’ll do it, and where you’ll work from. It also helps to avoid problems and disagreements that will get in the way of doing business. Most importantly, it gives each party confidence about having a professional, well-defined legal relationship.
When you hire a consultant for your business.
If you’re a business hiring a consultant, you should have a contract with the consultant. Of course, it’s best to have the contract in place before the work starts, but you can also sign up a contract afterward if you didn’t do it at the beginning of the work. As a client, a Consultant Agreement gives you comfort about what work your consultant will do, the quality the work must have, who will own the work product, and protections for your business (like confidentiality, not being allowed to hire your employees without permission, and unfair competition).
What's the difference between a Consultant Agreement and an Independent Contractor Agreement or Services Agreement?
They’re actually the same family of legal documents and other than the name we call them and a few features, they’re mostly the same document.
An Independent Contractor Agreementtends to be the name we use when someone is hired as a contractor rather than an employee. Sometimes, some employment-like terms are included, like an agreement to follow company policies that usually only apply to employees.
A Consultant Agreement tends to be the name used when an independent firm or professional is hired to give advice.
A Services Agreement is the generic name for agreements where one person or company provides services to another.
What's a non-competition clause?
A non-competition clause is a promise to not compete with another business. They’re not always easy to enforce, especially if the party agreeing to the non-competition clause wouldn’t easily be able to find employment or continue their business after agreeing to the clause. In short, the non-competition clause should be the minimum necessary to protect the party needing it. So, non-competition clauses are usually time-limited (e.g., 1 – 2 years), limited to a specific area, and apply only to the area of business of the protected party.
What's a non-solicitation clause?
A non-solicitation clause is a promise to not hire the other party’s employees or contractors. It can also be a promise to not go after the party’s customers and clients. Non-solicitation clauses are generally easier to enforce than non-competition clauses, but are still normally limited to a time period, like one or two years for example.
