| Consulting agreements are commonly used by | | | | consultant has taken actions contrary to the client. |
| businesses today. Consulting agreements can range | | | | Copyrights and Data |
| from one page to 20 or more pages depending on the | | | | The consulting agreement should address the use of |
| subject matter of the agreement and whether other | | | | the consultant's work. Some agreements allow the |
| agreements between the parties are included or are | | | | client complete use of the physical product delivered |
| incorporated by reference. This summary will discuss | | | | by the consultant and may not include an assignment |
| in more detail the terms of the Sample Consulting | | | | of copyright on the assumption that the consultant will |
| Agreement form and the legal rights and obligations | | | | want to retain the copyright. The best position for the |
| created under the agreement, as well as provisions | | | | client is to get complete ownership of not only the |
| that could be adapted to specific circumstances and | | | | tangible documents that the consultant prepares, but |
| arrangements. | | | | also the copyrights to those documents. However, the |
| Provisions of the Agreement and Duties and | | | | consultant may demand considerable more |
| Obligations Created | | | | compensation to assign this right making it impractical. It |
| The consulting agreement is an agreement between a | | | | is very important, however, for the parties to clearly |
| consultant and a client that wishes to retain certain | | | | understand their respective rights relating to not only |
| specified services of the consultant for a specified | | | | the physical documents but the copyrights as well. |
| time at a specified rate of compensation. As indicated | | | | Conflict of Interest; Non-Solicitation |
| previously, the terms of the agreement can be quite | | | | Clients should consider including a non-competition |
| simple or very complex. Below is a discussion of the | | | | clause in the agreement, at least for the term of the |
| more important issues to be considered in every | | | | agreement and within the market area of the client. |
| consulting agreement. | | | | Any non-competition clause must be reasonable to be |
| Scope of Work; Time; Compensation | | | | enforceable. Most consulting agreements also include a |
| It is important that the agreement for consulting | | | | statement that the consultant will not solicit the client's |
| services outline the specific services to be provided. | | | | employees for at least the term of the agreement. |
| Often a consulting agreement will contain an exhibit | | | | Miscellaneous Provisions |
| that lists the services expected of the consultant. This | | | | After spending considerable time negotiating the |
| list can then be amended if necessary without the | | | | services to be performed, the compensation, the |
| need to amend the entire agreement. | | | | ownership rights to the work product, etc. it is often |
| The time period in which the consultant is expected to | | | | easy for parties to neglect the miscellaneous |
| complete his or her task should also be included in the | | | | provisions that one typically finds at the end of the |
| agreement if applicable. Depending on the situation, the | | | | agreement. The parties should always pay careful |
| consultant may be expected to devote a specific | | | | attention to what law will govern the agreement, how |
| number of hours per week or per month to the | | | | disputes will be resolved, and, probably most |
| project, or may charge a flat fee when the services | | | | importantly, the assignability of the rights and obligations |
| are more specific in nature. The hiring company may | | | | under the agreement. Typically, the rights and |
| wish to include a "hold-back" provision alerting the | | | | obligations are not assignable since the client is hiring |
| consultant that a certain amount of the compensation | | | | the consultant because of the consultant's specific |
| will be withheld until the consultant has completed the | | | | expertise and the consultant is agreeing to perform the |
| task. Obviously, the inclusion of a hold-back provision | | | | services only for the client. There may be situations, |
| and the amount that is "held-back" are often points of | | | | however, where an assignment may be necessary, i.e. |
| contention and should be negotiated. | | | | the client merges with or into another entity. |
| Term and Termination | | | | Summary |
| The term of the agreement is typically quantified in | | | | Consulting agreements are frequently used in today's |
| months or years. Most likely it will coincide with the | | | | business world and vary in complexity from simple, |
| compensation schedule. The client should also protect | | | | one-page documents to very complex, 20+ page |
| its interests by allowing it to terminate the agreement | | | | documents. The terms detailed above, however, |
| under certain conditions. Typically these conditions are | | | | should be considered as basic requirements for any |
| (1) breach of confidentiality or non-solicitation provisions | | | | consulting agreement. With the key terms detailed in a |
| of the agreement, or (2) illegal activities that affect | | | | written agreement, the parties will have reasonable |
| consultant's performance under the agreement. | | | | expectations about services to be performed under |
| Without this right to terminate the agreement, the client | | | | the agreement and the consequences if those |
| is obligating itself to the consultant even if the | | | | expectations are not met. |