A consulting contract should provide a detailed description of the functions it will perform and the results it promises to the client. The agreement can also explain how much work you'll do in the client's office and how often you'll be working remotely. Many companies turn to outside consultants for specialized and additional help as needed. Like any other commercial agreement, both the consultant and the client sign a contract that defines the details of the agreement.
While there are several elements in a contract, some key elements of a consulting contract are essential to ensure that both the client and the consultant benefit from the business relationship. The contract description details the scope of the project and the purpose of the contract. The description generally answers several questions, such as what work the consultant will do, what the company wants, and what problem needs to be solved. This section also details the method used by the consultant to address the needs of the company.
The schedule element of a consulting contract details the project deadline and the agreed deadlines for completing key deliverables or tasks. This element also addresses the repercussions of any delay in work by the consultant and details when the project will be recognized as completed and the criteria for accepting its completion. Find innovative ideas quickly and at the right price. Use our crowdsourcing platform to get ideas from a community of more than 1 million creative problem solvers.
In Start Your Own Consulting Business, Entrepreneur Press staff and writer Eileen Figure Sandlin explain how you can start a profitable consulting business, no matter if your consulting firm focuses on staff placement, solving computer problems, or anything else you can think of. While these elements generally form a joint contract, each consulting agreement is unique for all types of consultants. This element also details the charging base, any budgetary restrictions, the definition of the expenses, and whether the consultant charges an advance, a fixed consultant fee, an hourly rate, a rate per day, or a fee depending on the completion of the task. In this edited extract, the authors discuss the importance of contracts for their consulting firm, what they should include, and why.
This section of the consulting agreement describes your consulting fees and includes all information related to payments, such as when and how you expect the company to pay you. The warranty element details any warranty given by the consultant to the client in relation to the consultant's work, for example, the customer has a certain number of days to notify the consultant of any errors or problems with the work. This clause is vital, as it can reduce any damage that your consulting firm suffers as a result of a dispute with a client. The main purpose of a consulting agreement is to describe the services that you will provide to the company.
Here are the six best practices for drafting a consulting contract that defines the scope of your project and protects you and your company.