Protect your business when hiring a consultant: Consulting Agreement
What we’ll cover
What is a Consulting Agreement?
A Consulting Agreement is a two-sided agreement between a company or individual and a consultant or consulting service. Consulting Agreements can provide numerous protections for your company, including agreements that safeguard your company's proprietary information and liabilities.
In a Consulting Agreement (also called a Consulting Contract, Business Consultant Contract, or Consulting Services Agreement), the consultant is an independent contractor with respect to the company and not an employee of said company. This is why many Consulting Agreements can easily be made into Independent Contractor Agreements by changing the term “consultant” to any other that could describe a different kind of contractor relationship.
Get started on your Consulting Agreement now. With Rocket Lawyer, it’s as easy as answering a few simple questions, and we will build the document for you!
When to use a Consulting Agreement:
- You are hiring an outside expert to consult for your business.
- You are providing your professional expertise to a company on a temporary basis.
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Sample Consulting Agreement
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This Agreement is made effective as of , by and between , of , , , and , of , , .
In this Agreement, the party who is contracting to receive services shall be referred to as "", and the party who will be providing the services shall be referred to as "".
has a background in and is willing to provide services to based on this background.
desires to have services provided by .
Therefore, the parties agree as follows:
. DESCRIPTION OF SERVICES. Beginning on , will provide the following services (collectively, the "Services") as referenced in the attached Proposal.:
. PERFORMANCE OF SERVICES. The manner in which the Services are to be performed and the specific hours to be worked by shall be determined by . will rely on to work as many hours as may be reasonably necessary to fulfill 's obligations under this Agreement.
. COMMISSION PAYMENTS. In addition to the payments under the preceding paragraph, will make commission payments to based on of . For the purposes of this Agreement, means
. EXPENSE REIMBURSEMENT. shall pay all "out-of-pocket" expenses, and shall not be entitled to reimbursement from .be entitled to reimbursement from for all "out-of-pocket" expenses.be entitled to reimbursement from for the following "out-of-pocket" expenses:
| - | Travel |
| - | Meals, not including alcohol |
| - | Postage |
| - | Copying |
| - |
. SUPPORT SERVICES. will provide the following support services for the benefit of :
| - | Office Space |
| - | Staff and secretarial assistance |
| - | Office supplies |
| - |
. TERM/TERMINATION. This Agreement shall terminate automatically upon completion by of the Services required by this Agreement.shall terminate automatically on .may be terminated by either party upon days' written notice to the other party.shall be effective for a period of and shall automatically renew for successive terms of the same duration, unless either party provides days' written notice to the other party prior to the termination of the applicable initial term or renewal term.
. RELATIONSHIP OF PARTIES. It is understood by the parties that is an independent contractor with respect to , and not an employee of . will not provide fringe benefits, including health insurance benefits, paid vacation, or any other employee benefit, for the benefit of .
. DISCLOSURE. is required to disclose any outside activities or interests, including ownership or participation in the development of prior inventions, that conflict or may conflict with the best interests of . Prompt disclosure is required under this paragraph if the activity or interest is related, directly or indirectly, to:
-
. EMPLOYEES. 's employees, if any, who perform services for under this Agreement shall also be bound by the provisions of this Agreement. At the request of , shall provide adequate evidence that such persons are 's employees.
. INDEMNIFICATION. agrees to indemnify and hold harmless from all claims, losses, expenses, fees including attorney fees, costs, and judgments that may be asserted against that result from the acts or omissions of , 's employees, if any, and 's agents. agrees to indemnify and hold harmless from all claims, losses, expenses, fees including attorney fees, costs, and judgments that may be asserted against that result from the acts or omissions of , 's employees, if any, and 's agents.
. INTELLECTUAL PROPERTY. The following provisions shall apply with respect to copyrightable works, ideas, discoveries, inventions, applications for patents, and patents (collectively, "Intellectual Property"):
Consultant's Intellectual Property. personally holds an interest in the Intellectual Property that is described on the attached Exhibit A and which is not subject to this Agreement.does not personally hold any interest in any Intellectual Property.
. OWNERSHIP OF SOCIAL MEDIA CONTACTS. Any social media contacts, including "followers" or "friends," that are acquired through accounts (including, but not limited to email addresses, blogs, Twitter, Facebook, Youtube, or other social media networks) used or created on behalf of are the property of . .
. CONFIDENTIALITY. recognizes that has and will have the following information:
| - | inventions |
| - | machinery |
| - | products |
| - | prices |
| - | apparatus |
| - | costs |
| - | discounts |
| - | future plans |
| - | business affairs |
| - | process information |
| - | trade secrets |
| - | technical information |
| - | customer lists |
| - | copyrights |
| - | product design information |
| - |
and other proprietary information (collectively, "Information") which are valuable, special and unique assets of and need to be protected from improper disclosure. In consideration for the disclosure of the Information, agrees that will not at any time or in any manner, either directly or indirectly, use any Information for 's own benefit, or divulge, disclose, or communicate in any manner any Information to any third party without the prior written consent of . will protect the Information and treat it as strictly confidential. A violation of this paragraph shall be a material violation of this Agreement.
. RETURN OF RECORDS. Upon termination of this Agreement, shall deliver all records, notes, data, memoranda, models, and equipment of any nature that are in 's possession or under 's control and that are 's property or relate to 's business.
. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or deposited in the United States mail, postage prepaid, addressed as follows:
IF for :
,
IF for :
,
Such address may be changed from time to time by either party by providing written notice to the other in the manner set forth above.
. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties.
. AMENDMENT. This Agreement may be modified or amended if the amendment is made in writing and is signed by both parties.
. SEVERABILITY. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Commonwealth of .
. INTERRUPTION OF SERVICE. Either party shall be excused from any delay or failure in performance required hereunder if caused by reason of any occurrence or contingency beyond its reasonable control, including, but not limited to, acts of God, acts of war, fire, insurrection, laws proclamations, edits, ordinances or regulations, strikes, lock-outs or other serious labor disputes, riots, earthquakes, floods, explosions or other acts of nature. The obligations and rights of the party so excused shall be extended on a day-to-day basis for the time period equal to the period of such excusable interruption. When such events have abated, the parties' respective obligations hereunder shall resume. In the event the interruption of the excused party's obligations continues for a period in excess of thirty (30) days, either party shall have the right to terminate this Agreement upon ten (10) days' prior written notice to the other party.
. ASSIGNMENT. agrees that it will not assign, sell, transfer, delegate or otherwise dispose of any rights or obligations under this Agreement without the prior written consent of . Any purported assignment, transfer, or delegation shall be null and void. Nothing in this Agreement shall prevent the consolidation of with, or its merger into, any other corporation, or the sale by of all or substantially all of its properties or assets, or the assignment by of this Agreement and the performance of its obligations hereunder to any successor in interest or any Affiliated Company. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, legal representatives, successors, and permitted assigns, and shall not benefit any person or entity other than those enumerated above.
. SIGNATORIES. This Agreement shall be signed on behalf of by , and on behalf of by , and effective as of the date first above written.
Party receiving services:
| By: | Date: |
Party providing services:
| By: | Date: |
EXHIBIT A
Intellectual Property
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___Sign this document. The Consulting Agreement needs to be signed by:
The can be signed online. It becomes effective as of the date specified in the .
___Everyone gets a copy. Anyone named in the document should receive a copy of the signed document. If you sign this agreement online a copy will be securely stored in your account. You can share your document from your account.
Important Details
If will provide a proposal with a description of services that will be provided, a copy of the proposal should be attached to this document as it is directly referenced in the agreement. A lawyer should be consulted regarding any unique issues not addressed by this document.
The Consulting Agreement should only be used for a party who is an "independent contractor" with respect to the Company. If the arrangement between the Company and the Consultant conforms more closely to the characteristics of an employee/employer relationship, the Employment Agreement may be more appropriate.
About Consulting Agreements
Learn about how to protect your business when hiring a consultant
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What are the common topics in a Consulting Agreement?
Our Consulting Agreement is simple to make. To complete the document, you only need to answer a few questions and submit some routine information. The document builder will automatically include the legal language for you.
Still, you may come across some provisions that you might not be too familiar with. Here’s a brief explanation of some of the topics our contract may include:
Contact information
This is where you will provide contact information for the business and the consultant, as well as contact persons for each.
Consultant information
In this section, you will fill in the consultant's experience and what service they will be providing.
Dates
You will need to enter the dates for when the contract begins, when it ends, and when the consultant is expected to start working.
Payment information
This section outlines how the consultant will be paid. You can choose to pay one lump sum at the end of the project, a fixed wage, or commission. You can also select a combination of payment methods.
Out-of-pocket expenses
You can dictate how ongoing project expenses will be managed. In most cases, the consultant will pay for their own business-related expenses, but the company may opt to pay for expenses related to the project or their company specifically.
Support offered
Will the company provide office space or an assistant for the duration of the contract?
Conflict of interest
Do you want to prevent the consultant from working with competing businesses during the duration of the contract? Will they require your approval to accept an additional contract? Will their employees or associates be included as well?
Insurance
What type of insurance will the consultant be required to hold?
Confidentiality
What information do you want protected and for how long? This contract includes the option to protect information such as inventions, pricing and cost information, business affairs, processes, machinery, and so on. Do you also want to include their employees in this agreement?
Social media
Will they have access to your social media and be allowed to post on your behalf? If so, who owns the contact lists?
Still have questions about specifics? Don’t hesitate to ask a Legal Pro.
Consulting Agreement FAQs
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Do I need a Consulting Agreement?
If you fit under any of these situations, the answer might be yes:
- You need a contractual agreement between your company and an external consultant.
- You are a consultant and need to provide your clients with a contract.
- You need a contract with a confidentiality agreement.
- You need a contract with insurance requirements and indemnification agreements.
This Consulting Agreement (also known as a Consulting Contract) is suitable for a wide range of consulting services such as brand management, environmental consulting, market research, human resources, marketing and sales, and safety. The contract is simple to make and generally covers the necessary protections for both sides of the agreement.
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Why is a Consulting Agreement important?
This business contract can provide numerous protections for your company. The contract includes general information as well as confidentiality, insurance, non-compete, and indemnification agreements. When you invite an outsider to work with your company, they may have access to your office, proprietary information, employees, processes, unreleased marketing campaigns, and more, so it is important to have a contract to protect your company. To benefit the contractor, it includes payment agreements.
Instances you may benefit from having a Consulting Agreement include when you hire a:
- Marketing company.
- External IT person or team.
- Research company.
- Environmental consultant.
- Human resource consultant.
- Social media manager (external).
- Strategy consultant.
- Finance, tax or accounting consultant.
It should be noted that you need to understand the distinction between an external consultant and an employee. A consultant acts as their own company and should not be treated as an internal employee. If the difference becomes blurred, you may incur tax issues.
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What are the benefits of hiring a consultant?
Some experts estimate that about 30 percent of the US workforce participates in the "gig economy," which means they are doing contract work. There is a good chance your company will increasingly work with external consultants. There are many advantages to hiring consultants, who may also be called contract workers, freelance workers, or independent workers. You may also hire a consulting service to work on specific projects with your company.
Advantages of hiring external workers:
- You don't have to pay employee expenses such as benefits and employment taxes.
- You can hire them without a long-term commitment.
- You don't have to pay for their equipment or services such as laptops, mobile phones, or internet service.
- They bring an outside perspective to your projects.
- External consultants are less influenced by corporate politics, out-of-date processes, or past failures.
- You can require a specific set of skills that may not be available within your company.
While it may appear at first that hiring a consultant is costly per hour, it is usually less expensive than hiring full-time employees when you consider taxes, equipment, paid time off, health insurance, and so on.
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I am a consultant. Should I incorporate?
There are many benefits to incorporating, even if your earnings are low. While tax advantages are typically more significant for those with higher incomes, individuals may still benefit greatly from forming an LLC for crucial liability protection.
There are a few protections that are generally available to consultants who incorporate:
Protection from liability. Forming an LLC, or other business entity separates you from your business. If your company runs into creditor issues, creditors cannot go after your personal assets in most cases.
Insurance. You can obtain insurance in your company's name rather than your own name. If you lose a libel case, your business assets may be at risk, but your personal assets aren’t typically impacted.
Protection from another member's actions. If your business has more than one member, you are personally shielded from their actions. Also, your business may be protected if another member's personal assets are at risk.
Bankruptcy. If your business needs to declare bankruptcy, your personal assets are protected.
If you need a service contract for a specific type of job rather than a Consulting Agreement, we offer many service contracts by job type.
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