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Consultancy Agreements

Consultancy Agreements: They Have You Covered!

Broadly speaking, a consultant is a person with expertise, skills and knowledge in a particular area, who works as an advisor, or to complete a specific project, for another business or individual.

There has been a boom in the number of people opting to work as consultants – and their fields of operation are diverse, for example:-

  • Accounting and auditing;
  • Business advisors;
  • Financial advisors;
  • Marketing and advertising;
  • Writing, editing and publishing;
  • Communications;
  • IT and computer consulting;
  • Landscape and garden consultants;
  • Public relations;
  • Human resources and career consultants.

Hiring a consultant gives businesses access to specialised skills and expertise that they may not have within their own organisation.

Hiring a consultant also avoids the considerable tax and administrative costs that are part and parcel of hiring and preserving regular employees.

If you are a consultant, you should ensure you have proper procedures and systems in place to streamline your work practices and to maintain and organise work and clients. One of your main tools as a consultant should be a Consultancy Agreement.

consulting services

You can easily customise your own Consultancy Agreement to be used as the foundation of your business relationships.

You can customise your own Consultancy Agreement to be used as the foundation of your business relationships.

This ensures both you and your client understand upfront all of the pertinent details relating to the work to be completed, your rates (whether you will charge per hour or per project or on some other basis), any additional expenses that may arise and other relevant information.

A Consultancy Agreement:-

  • formally sets up a consultancy relationship, not to be confused with that of employer and employee. Thus, there is no room for ambiguity about the nature and status of the consultancy relationship; both parties know the relationship exists and the Consultancy Agreement makes it formal.This makes it easier for you to seek compensation later for any damages that may arise out of your association with the client and the work performed;
  • defines what is expected from each party. It serves as a handy guide about each of the parties duties and responsibilities;
  • gives you legal recourse if the other party fails to honour the agreement;
  • specifies whether the consultant is allowed to subcontract his or her tasks to others. In case subcontracting is allowed, the agreement outlines any conditions which have to be met for subcontracting permission to be granted;
  • limits and defines liability and compensation;
  • specifies the amount payable to the consultant for his or her services. It also outlines which of the consultants’ expenses are covered by the consultancy fees;
  • defines intellectual property rights. It usually specifies who has intellectual property rights over the contract materials (that is the output generated by the consultant) and the know-how produced during the consultancy relationship. It also states that rights to the materials and know-how that your company brings into the relationship remains yours throughout the duration and after finishing the agreement.
  • ensures confidentiality and non-disclosure. It should obligate the consultant not to disclose proprietary or sensitive information to which it is given access during the project. Furthermore, in cases where an intellectual property resulting from the project cannot be patented or copyrighted, the agreement has a clause obligating the consultant to keep such property confidential.
  • facilitates dispute resolution and creates exit strategies. True to any other contract, it usually has rules for relationship breakdowns. It will guide you about legitimate early endings of the contract, default and how disputes between you may be negotiated and resolved.

Thus, since the consultancy agreement provides you with legitimate, extra judicial means of dispute resolution and contract termination, you can save on legal costs if the relationship breaks down.

Know what to expect and when to expect it

Your Consultancy Agreement may contain a schedule listing the consultant’s responsibilities. This breaks down the output needed of the consultant into tangible deliverables with definite deadlines.

You will know exactly what you can expect from the consultant and when to expect it. This gives you the ability to confidently plan other projects which you can work around.

Download Your Own Consulting Service Agreement Kit