6 Things to Keep in Mind While Drafting Consulting Agreements
Small businesses and start-ups form a big part of the Canadian economy, comprising of over 98% of all employer businesses in the country. A large number of these businesses need and employ the services of consultants. Even larger companies and conglomerates depend on their services for specialised expertise and newer perspective.
Hence, clear and fair consulting agreements are a necessity for individuals as well as consulting firms. A consulting agreement is a contract between a consultant and a client which allows the client to engage services of the former. Stated simply, this contract outlines the terms of the service and makes sure both parties receive the benefits they were employed for.
Here are a few key things to keep in mind while drafting consulting agreements:
1) Scope of Work
This is one of the key benefits of having a detailed consulting agreement. The contract should explicitly include the nature and the scope of services that are required on the part of the consultant. It needs to be specific and result-oriented and shouldn’t leave anything open to interpretation.
One of the most obvious things to keep in mind while drafting consultant agreements is the term of the contract. Clearly indicate the tenure for which the services are needed and mention terms of an extension, if required.
3) Terms of Payment
The contract should mention the agreed upon rate at which the consultant will be paid, the mode of payment and other terms associated with it. These terms usually vary from consultant to consultant as some experts prefer payment on a weekly basis while others require imbursement in advance. It’s advisable to consult an experienced contract lawyer to negotiate these conditions for you and draft an agreement that is ideally suited for both the parties.
4) Independent Contractor Agreement
This is a supplementary agreement which could be added to the contract, depending on the consultant employed. This is because the terms of agreement for a freelancer differ from that of an agent from a large consulting firm. Your business lawyer can help you diversify or draft a new agreement depending on the expert employed.
5) Non-Disclosure Agreement
Although it is not obligatory, it is always good to add an NDA while drafting consulting agreements. Especially, if the consultant would have access to intellectual property or trade secrets of your organisation. Other documents that you can include along with the agreement are an employment contract, an employee handbook or a termination contract.
6) Detailed Review
Getting an experienced lawyer to review your consulting agreement is a step that you should never skip. A practised lawyer not only makes sure your agreement is fair but also includes other necessary features such as methods for dispute resolution, extent of liability for both parties etc.
Working with a specialised expert can be truly beneficial for your business but can also result in conflicts and disagreements. Having a sound consulting agreement makes sure these disputes are resolved amicably and the consultant receives their due credit. Book an appointment with our law firm today to learn more about these contracts.