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A consulting agreement is a type of agreement between a client and a consultant.

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What is a consulting agreement?

A consulting agreement is a type of service agreement between a client and a consultant. The contract will detail what types of consulting services are being offered as well as the pricing for these services. It will also detail the type of time frame that applies to the consulting services.  The consulting agreement may also cover obligations and responsibilities, intellectual property rights, confidentiality, and other terms.

This agreement will serve as a legally binding contract for both parties. It will ensure the quality of the consulting work and it will also lock in a price for the services. A contract will be a way for the parties to look over the terms and agree to the conditions of the transaction. Both parties will need to sign this agreement for that reason.

Due to the legally binding nature of the contract, it can be helpful to seek legal advice from a law firm in creating the agreement. This will ensure that both parties are signing an accurate agreement, and that they can be protected under the law in the event that a dispute occurs over the consulting services.

Other Names

A consulting agreement is also known as:

  • Business Consultant Agreement
  • Consulting Contract
  • Freelance Agreement
  • Independent Contractor Agreement

What is a consultant?

A consultant is an individual or business that provides professional services to a client in exchange for compensation.  A consultant may also be known as a freelancer or contractor.

A consultant is not an employee of the company, which means that the company is not responsible for expenses such as the consultant's taxes, social security, employee benefits, or workers' compensation insurance.

A consultant will generally specialize in a particular area of expertise.  A company may hire a consultant in an area such as marketing, human resources, or efficiency management.

What should I look for in a consulting agreement?

This consulting agreement should include terms that cover the consultant and the customer, the terms of service, the details of the compensation, intellectual property rights, confidentiality, non-competition, and non-solicitation.

  • Consultant - Basic contact information (name, address, phone number)
  • Customer - Basic contact information
  • Governing Law - Choose the applicable law
  • Terms of Service - Details about services that will be provided including details about how either party can terminate the agreement
  • Compensation Details - How much customer will pay, whether invoicing is required, late payment terms
  • Intellectual Property Rights - Who will own any work product that is created.  Generally any intellectual property that is created belongs to the client, but the consultant agreement can assign ownership rights to either party.
  • Confidentiality - Terms that prevent a consultant from disclosing the company's confidential information such as trade secrets, client lists, and other proprietary information
  • Non-competition - Terms that prevent the consultant from directly competing with the client for a specific period of time
  • Non-solicitation - Terms that prevent the consultant from soliciting customers or employees of the client without prior written consent
  • Termination - If parties agree to a process for earlier termination of the agreement
  • Entire Agreement - Statement that this is the entire agreement between the parties
  • Notices - Provide contact information and instructions on how to send any notices (ex: by registered mail, return receipt requested)
  • Signatures - Statement such as, "In witness whereof, the parties agree...", followed by both parties' signatures

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