subject: Consultancy Agreements Why, When And How [print this page] A consultancy agreement is a contract between a consultant and a client that sets out the terms and conditions of their contract and details of the consultancy services that the consultant will provide. Consultancy agreement should be based on a written agreement because the ability to enforce an oral agreement is limited.
The consultancy agreement should include the following provisions:
details of the parties
details of the work
time period of consultancy
rights and liabilities
professional considerations
confidentiality
rights and data(intellectual property rights)
termination provisions
Consequences of breaching the consultancy agreement
Miscellaneous provisions
It is crucial that the consultancy agreement sets out clearly what services the consultant is to provide. Generally, the consultancy agreement will use a schedule or secondary document to describe the services that are to be provided. This permits the parties to alter that document as the relationship evolves without amending the entire agreement.
The consultancy agreement should address the use of the consultants work. Some agreements permit the client complete use of the physical product delivered by the consultant and may not include an assignment of copyright on the assumption that the consultant will want to keep the copyright. The prime position for the client is to get complete ownership of not only the tangible documents that the consultant prepares, but also the copyrights to those documents. However, the consultant may demand considerable more compensation to assign this right making it impractical. It is very important, however, for the parties to clearly understand their respective rights relating to not only the physical documents but the copyrights as well.
The term of the consultancy agreement is usually quantified in months or years. Most likely it will coincide with the compensation schedule. The Consultancy agreement should also protect the interests of client by allowing it to terminate the agreement under definite circumstances. Such as:
Violation of confidentiality terms of the agreement, or
Illegal activities that affect consultants performance under the agreement
When a consultant violates consultancy agreement, he is subject to remedies available to the client. These remedies include equitable relief and monetary damages.
A consultancy agreement should also specify the client obligations such as:
Offering full access to any proprietary documents or other information that the consultant requires in order to fulfill his or her commitments.
Provide the time to meet with the consultant from time to time, and in general making sure the consultant has what he or she needs to get the job done.
The client should always compel the consultant to agree to perform the services with high skilled standards and business ethics, keep the confidentiality of the client and, if relevant, require the consultant to obtain prior written approval before engaging any other person to assist with performing the services under the agreement.
After spending considerable time negotiating the services to be performed, the compensation, the ownership rights to the work product, etc. it is often easy for parties to neglect the miscellaneous provisions that one typically finds at the end of the agreement. The parties should always pay careful attention to what law will govern the agreement, how disputes will be resolved, and, probably most importantly, the assignability of the rights and obligations under the agreement.
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