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The Optimal Consulting Agreement Template For 2019

Handshake business deals may still work for some people, but without a solid consulting agreement in place, signed by both parties, you are putting yourself and your business at risk.

That’s why today, we’ll be providing you with the optimal consulting agreement template for 2019.

Most independent consultants and contractors significantly underestimate how much needs to be covered in a consulting contract:

  • What happens if the client wants to add additional work mid project?
  • What happens if the client decides they want to pull out?
  • Should you distinguish between one-time setup services and ongoing services in your contract?

The answers to these questions and many more need to be definitely covered in your consulting agreement, and today, we’ll cover all of these key components and provide you with a rock-solid, downloadable template for you to use in both PDF and Google Doc forms.

Since you will need to customize our template for you own use, It’s important to understand WHY each component is critical, but if you simply want to grab the template, you can do so below:

18 Components Every Consulting Agreement Needs

Believe it or not, an effective consulting contract needs a full 18 components to get the job done. A few of these components are strictly legal considerations, but the vast majority of them are actually critical to the day-to-day nature of your work with a client.

If you are new to running a consulting business, looking through these components will probably help you make a plan for challenges you never even considered. And if you have spent a few years in this line of work, you will probably realize that some of your most annoying problems with clients can actually be preemptively solved directly in the consulting agreement.

Here’s the full list:

  1. List of involved parties
  2. Listing of services to be provided
  3. Listing of required contributions by the client
  4. Compensation and payment details
  5. Timeline details
  6. Termination details
  7. Ownership of materials
  8. Proprietary information and use of materials
  9. Terms for additional services
  10. Limitation of liability
  11. Handling of disputes
  12. Communication details
  13. "No Guarantee"
  14. "Entire Agreement"
  15. "Severability"
  16. "Headings"
  17. "Interpretation & Enforcement"
  18. Signatures of involved parties

Let’s look at each component individually and learn why we need it in our contract.

1. List All Parties Involved In The Consulting Contract

This first component is very straightforward. Your consulting agreement should start by listing out all parties involved in the contract, including their official names and locations.

Demo Company LLC

Consulting Services Agreement

Thank you for choosing [Demo Company LLC] to advise and implement [what you’re doing for them] exclusively for your business. We are excited to work with you to [benefit of services].

THIS AGREEMENT (the “Agreement”), is entered into on this date ___________________ by and between [Demo Company LLC] (“The Company”) a [Your city/state] limited liability company, with a mailing address of [Your address or PO box address], and;

[Client Name], (the “Client”) whose address is: [Your client's address] (collectively, the “Parties”).

The Client and The Company agree as follows:

2. List All Services To Be Provided By The Consultant

The next component is the listing of all services being offered in the consulting agreement.

This might seem simple at first glance, but it’s important that you distinguish betweens the types of services you are offering. The most lucrative types of consulting contracts involve both an initial one-time project as well as ongoing monthly services, and you will need to separate these, as well as any other unique service types, within your contract.

If you don’t differentiate your services, you can run into problematic situations where the client is demanding extra work or claiming to not have understood they were agreeing to ongoing work. If you spell everything out in your contract, you can simply show them the contract and clear things up.

The Services.

The services can be divided into two parts, the setup services and the ongoing management services. Both types of services are detailed below:

As part of the setup services, the company will: [What you be doing for them]. This will be done by:

  1. Setup process six goes here;
  2. Setup process one goes here;
  3. Setup process two goes here;
  4. Setup process three goes here;
  5. Setup process four goes here;
  6. Setup process five goes here;
  7. Setup process six goes here;

As part of the monthly ongoing management services, the company will: [What you will be doing for them]. This will be done by:

  1. Management process one goes here;
  2. Management process two goes here;
  3. Management process three goes here;
  4. Management process four goes here;
  5. Management process fice goes here.

3. List All Required Contributions By The Client

Have you ever been stuck waiting on a client to send you information or materials that you need in order to complete your service for them?

Have you ever been stuck waiting for weeks... maybe even months... only have them turn around and complain about you not delivering your work sooner?

This is an absurdly common part of running a service business, and fortunately, it’s something you can solve preemptively in your contract by listing all required contributions or actions on the part of the client.

If extended timelines are a concern, you can even specify that failure by the client to deliver their required contributions will result in termination of the contract and forfeiture of their deposit.

Client Requirements.

Client agrees to the following terms for delivery and review of materials.

  1. Client requirement one. (Eg provide required intake info requested through survey).
  2. Client requirement two goes here.
  3. Client requirement three goes here.
  4. After30daysofnocontactfromClienttoTheCompany,The company will assume Client is no longer in need of The Company’s services, and The Company may terminate the Agreement; in this event, all unpaid fees will be due and collectable at the time of termination.

4. Spell Out Compensation & Payment Terms

Including compensation terms in your consulting agreement goes without saying, but it’s equally important to detail the exact terms for payment.

If you leave payment terms vague, you are risking a scenario where you are constantly hounding the client for payment, which is the last place you want to be.

Spell out full compensation and payment terms in exhaustive detail within your contract.

Compensation and Payment.

  1. Set up Fee: For the Services described in Section 1A-F, Client will pay [$XX.XX] in setup fees. Set up, as outlined in Section 1A, can take varying lengths of time, but will usually take around 30 days.
  2. Ongoing Management: For the Services described in Section 1G-K, Client will pay to The Company [$XX.XX] per month for ongoing management. The [$XX.XX] will be due every 30 days and will be automatically deducted from your payment method on file each month.
  3. The following provision applies to the authorization of repeated credit or debit card authorizations, only:

    Right to cancel: The Client has the right to cancel this contract until midnight of the third (3rd) business day after it is signed and executed. Client may cancel this agreement by mailing a written notice to The Company before midnight of the third business day. Notice of cancellation sent after this deadline may be deemed invalid at the sole discretion of The Company.

5. Clearly Communicate The Project Timeline

When does the project start? When will it end? Are there any key checkpoints along the way? Does the client need to provide materials by a given date for the project to continue? If either you or the client fails to meet a given timeline, what happens next?

All these details should be covered in your consulting contract.

Term.

This Agreement will commence on the effective date first set forth above and will continue for a minimum period of [90 days], regardless of the Client’s delivery of content, and then will continue on a month to month basis unless otherwise terminated by The Company or Client or unless otherwise agreed to by The Company and the Client.

6. Outline Grounds & Procedures For Contract Termination

Sometimes, clients decide they want to cancel a consulting agreement mid-project. Other times, you might be the one wanting to bail.

What are the grounds for termination? What happens when one party wishes to cancel? Are refunds involved? What about money that hasn’t been paid yet?

Once again, every detail needs to be accounted for in your contract, preferably with terms that are favorable for you.

Termination.

This agreement may not be terminated prior to [90 days] after the date shown above by either party. In the event that the Client desires to terminate the Services hereunder, the Client must submit a written request to The Company at least seven (7) days prior to the desired date of termination. Written requests to terminate may be made by mail or e-mail. If Client chooses to terminate this agreement in writing, all monies owed to The Company will be due immediately and will be automatically charged to the Client’s payment method on file. Under no circumstances will The Company give refunds of the amount paid for the Services hereunder.

7. Establish Ownership Rights For Created Materials

Most clients understand the nature of a consulting relationship, but you should never make assumptions. Clients can have very unique ideas about their ownership of you and your time during a consulting engagement, which is one of the reasons contracts are so important in the first place.

This reality extends to the ownership of materials created or used during your engagement. Clients can have outlandish ideas about what they own, so it’s important to spell out your ownership over created and used materials during an engagement.

If your deliverables include created materials that will be transferred to client ownership, you can make exceptions for specific materials listed in the services section.

Ownership of Materials.

The Company shall retain the creative rights to all original materials, data and similar items, produced by The Company hereunder in connection with the Services under this agreement. All services and software used by The Company shall at all times be the sole property of The Company and under no circumstances shall Client have any interest in or rights to the title to such materials, or software. Client acknowledges that The Company may use and modify existing materials for Client’s benefit and that Client holds no rights to such materials.

8. Establish Ownership Rights For Information

Proprietary and sensitive information will often be shared by both parties during a consulting engagement. This is sometimes protected via a non-disclosure agreement (NDA), but if your engagement doesn’t call for a more advanced NDA, it makes sense to simply include an NDA clause in your consulting contract.

Proprietary Information and Use of Materials.

  1. Except as provided elsewhere in this Agreement, all information disclosed by one Party to the other Party, shall be deemed to be confidential and proprietary (“Proprietary Information”). Such Proprietary Information includes, without limitation, information regarding marketing, sales programs, sales volume, sales conversion rates, sales methods and processes, sales proposals, products, services, vendors, customer lists, training manuals, sales scripts, telemarketing scripts, names of investors, and customer information, operating procedures, pricing policies, strategic plans, intellectual property, information about a Party’s employees and other confidential or Proprietary Information belonging to or related to a Party’s affairs. The receiving Party acknowledges and agrees that in any proceeding to enforce this Agreement it will be presumed that the Proprietary Information constitutes protectable trade secrets, and that the receiving Party will bear the burden of proving that any portion of the Proprietary Information was publicly or rightfully known and disclosed by the receiving Party. The Parties, their employees, subsidiaries, affiliates, agents, and assigns agree to hold all Proprietary Information, regardless of when or how disclosed, in strict confidence and with not less than the same degree of care that they provide for their own confidential and proprietary information. The Parties warrant and represent that the degree of care contemplated herein is adequate and the Parties will take any and all steps reasonably necessary to preserve such Proprietary Information.
  2. Nothing in this Agreement shall prohibit or limit the receiving Party’s use of information that can be demonstrated as: (a) previously known to the receiving Party, (b) independently developed by the receiving Party, (c) acquired from a third party not under similar nondisclosure obligations to the disclosing Party, or (d) acquired through the public domain through no breach by the receiving Party of this Agreement.
  3. License. Client grants The Company a limited, nontransferable, nonexclusive license to copy, use, store, set up, publicly display, publicly perform and transmit any trade names, trademarks, service marks, copyrights, content, text, images, software, functionality, page and other design and layout, media and other materials therein and solely in connection with creation of the Campaign and direct response marketing in accordance with this Agreement. Other than as specifically provided herein, the Parties, their employees, subsidiaries, affiliates, agents and assigns, shall make no disclosure of any Proprietary Information without the express written consent of the other Party. In addition, neither Party shall use the Proprietary Information for any purpose other than purposes related to their business relationship as laid out in this Agreement. In the event that the receiving Party is required by applicable law, rule, regulation or lawful order or ruling of any court, government agency or regulatory commission to disclose any Proprietary Information, the receiving Party understands that the disclosing Party may desire to seek an appropriate protective order or take steps to protect the confidentiality of such Proprietary Information. Consequently, the receiving Party agrees that it will provide the disclosing Party with prompt notice of such request(s).
  4. Portfolio Release. Client agrees that The Company has the right to use materials created pursuant to this Agreement for The Company’s portfolio, samples, self-promotion including advertising for The Company’s business including without limitation Facebook or Instagram, or any other social media platform. In the event Client wishes to exclude some specific materials from the release under this paragraph, or to limit the time period of such release, The Company and Client may agree in writing to such limitation.
  5. Remedies. The Parties acknowledge that the Proprietary Information exchanged is valuable and unique and that disclosure in breach of this Agreement will result in irreparable injury to the adversely affected Party, for which monetary damages, on their own, would be inadequate. Accordingly, the Parties agree the adversely affected Party shall have the right to seek an immediate injunction enjoining any such breach or threatened breach of the Agreement.

9. Establish Terms For Additional Services

One of the most common challenges faced by virtually every freelancer, independent contractor, consultant, or service provider of any kind is when the client comes to you mid-project and wants something extra that wasn’t part of the original agreement.

Maybe they want a more complex version of what you agreed to do. Maybe they want a larger quantity. Maybe they want a more advanced option that they had previously declined.

Simply put, you need to establish terms ahead of time for additional services requested mid-project. Never be generous with these terms. You aren’t going to have as much time to prepare for additional requests and they represent a failure on the part of the client to plan ahead. You should always be locking in these terms at a premium rate.

Additional Services.

All services outside the scope of this Agreement that are requested by the Client and which The Company agrees to perform will be billed at a rate of [$200] per hour. Client will be notified and must approve in writing (email is sufficient) additional services before they will be performed, although The Company may not necessarily be able to inform Client in advance of the total cost of such additional services. Client will also be given opportunity to purchase additional services at package rates, when deemed appropriate by The Company.

10. Limit Your Liability

This component is straightforward. A "Limitation of Liability" clause can help protect you from frivolous lawsuits.

That said, if the nature of your services creates any sort of real potential for damages, it’s important to write out this clause with the help of a lawyer who understands your business and industry.

Limitation of Liability.

The Company shall not be liable for any incidental, consequential, indirect or special damages, or for any loss of profits or business interruptions caused or alleged to have been caused by the performance or nonperformance of the Services. Client agrees that, in the event The Company is determined to be liable for any such loss, Client's sole remedy against The Company is limited to a refund of payments made by Client for said Services, less expenses paid to subcontractors or to third parties. The Company is not responsible for errors which result from faulty or incomplete information supplied to The Company by Client. Client also agrees to not seek damages in excess of the contractually agreed upon limitations directly or indirectly through suits by or against other parties. The Company shall not be liable to Client for any costs, damages or delays due to causes beyond its control, expressly including without limitation, unknown site characteristics; changes in policies, changes in terms of services.

11. Establish Terms For Handling Disputes

Contract disputes are always a costly hassle... usually for everyone involved. Depending on the size of the contract, however, some less upstanding clients might simply cancel payments and completely ignore you, hoping that the cost to litigate will prevent you from coming after them.

While this is often the reality for independent consultants and contractors, if you do decide to pursue legal action, you’ll want to cover all your bases and ensure that should you succeed in court, you will be compensated for every area that you have lost time and money in pursuit of the payment owed to you.

Handling of Disputes.

The Parties agree that any dispute regarding this Agreement, and any claim made by Client for return of monies paid to The Company, shall be handled in accordance with applicable State and Federal laws. Specifically, if Client cancels credit card payments after the three day cancellation period permitted by law and outlined in this Agreement, this Agreement is immediately terminated, and The Company reserves the right to dispute such cancellation and pursue Client for monies owed to The Company for services already performed but unpaid by Client due to such credit card cancellation. Client agrees that, regardless of whether Client is ultimately successful in any credit card cancellation dispute, it is liable to pay The Company for the work already performed as of the time of the cancellation request, at an hourly rate of $200 per hour for all hours spent on Client’s project. The Company will provide Client with an itemization of hours spent within a reasonable time upon the request of the Client and payment will be expected in full within 30 days from the date such itemization is provided. If Client does not pay for such hourly work upon The Company’s demand and within 30 days, The Company reserves the right to initiate an action in court for breach of contract, regardless of the previous outcome of any credit card cancellation dispute. Additionally, if The Company is successful in any credit card cancellation dispute, The Company reserves the right to pursue Client for the costs The Company had incurred in disputing or defending such credit card cancellation, including but not limited to the lost business profits in the form of time The Company and its representatives spent handling such dispute, at The Company’s hourly rate of $200.

12. Establish Terms For Project Communication

Remember when your old boss demanded hour-long meetings for things that should have been a 20 word email? Well guess what, your clients are exactly like your old boss.

Clients have their own preferred method of communication, and if you don’t establish expectations for how communication will happen during the project, you stand to lose a lot of time.

Communications.

Client agrees the communication is to be via email only, the email address to use is [email protected] If the Client wishes to speak on the phone, the Client should send an email to The Company stating that you would like to schedule a phone call and The Company will work with the Client to arrange a time. The Company’s office hours are [Enter your office hours and time zone]. The Company typically responds to email within 24-48 hours excluding weekends and standard public holidays.

13 - 17: Legal Stuff

The last five components are definitely worth looking at but mostly just come down to legal due diligence. These are not really going to impact your work with the client in any way.

It’s always preferable to write these out with the help of a lawyer who understands your specific business and industry.

No Guarantee.

The Company does not warrant or guarantee any specific level of performance or results. Example of results obtained for other clients of The Company may be used as a marketing tool and shown to Client for demonstrative purposes only and should not be construed by Client as indicating any promised results or level of results.

Entire Agreement.

This Agreement is the final, complete and exclusive Agreement of the Parties. No modification of or amendment to this Agreement shall be effective unless in writing and signed by each of the Parties.

Severability.

If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement, the remaining provisions of this Agreement shall remain in full force and effect.

Headings.

The headings used in this Agreement are for convenience only and shall not be used to limit or construe the contents of this Agreement.

Interpretation and Enforcement.

The parties understand and agree that the construction and interpretation of this Agreement is governed by the laws of the State of [Your country, city or state]. In the event that either party must initiate legal action to enforce this Agreement, the Parties agree that the proper venue for such action shall be the courts of the State of [Your country, city or state].

18. Signatures Of All Parties Involved

You can’t have an official consulting contract without the signatures of all parties involved. Be sure to include Name, Company, Signature, and Date. Other identifying information can be included as well, but these are the essentials.

By their signatures below, the parties hereby understand and agree to all terms and conditions of this Agreement.

Client
Name: _________________________
Company: ______________________
Signature: ____________________
Date: _________________________

The Company
Name: ___________________________
Company: ________________________
Signature: ______________________
Date: ___________________________

Final Thoughts

When building out your consulting agreement, remember to keep a few things in mind.

Your contract is a limited protection should legal action be required, but the reality is that legal action will rarely happen. It is always a last resort that both parties will want to avoid.

This means that a contract is best used as a resource for establishing expectations with a client AND a reference you can refer the client to when they inevitably forget those expectations.

On that note, it’s important to understand that you are dealing with people, complete with all their quirks and complexities. They may not even read the contract you’re signing, so be sure that you are clearly communicating expectations in addition to including them in the contract.

And finally, if you haven’t already, make sure to download our consulting agreement template. Enter your info below, and we’ll send it to you as both a PDF and editable Google Doc.

Finally, if you’re interested in starting or growing your own consulting business, be sure to sign up for our free webinar and learn how our students are getting between 30-50 high ticket consulting clients every single month with predictability down to the dollar and day.