A Consulting Agreement is a legally binding contract between a client and a consultant providing their service as an independent contractor. Key aspects of such an agreement include defining the services, payment details, and terms to protect both parties during the contract period. 

A Consulting Agreement is often referred to as a consultant agreement or consulting contract.

It’s important to note that consultants are considered independent contractors for hiring and tax purposes. Learn more about the difference between contractors and employees with our Employees vs. Independent Contractors: The Definitions, Differences, and Documents.

Consultants or clients can create a Consulting Agreement for many different consultant services. This includes industries and specialties such as:

• Information technology (IT)
• Software as a Service (SaaS)
• Business management
• Human resources (HR)
• Engineering
• Legal advice
• Real estate
• Marketing
• Finances

LawDepot’s template allows a consultant or a client to make a consulting contract. Customize your agreement to include the specific services a consultant is providing.

Yes, whether you’re a consultant or a client, you should use a Consulting Agreement when a consultant is providing their services. 

A verbal contract can be binding, but it’s hard to prove what the terms of such a contract are. Having an agreement in writing helps establish the terms and conditions of the services to protect both parties. A written contract should define the responsibilities of both parties, keeping everyone accountable for their duties and establishing clear deliverables. 

For example, a consultant may need access to a client’s Business Plans, trade secrets, or existing intellectual property to fulfill their duties. A confidentiality clause creates terms for using private information and gives clients peace of mind that their details are secure.

Finally, creating an agreement helps provide evidence of agreed-upon terms if a conflict regarding the services or contract arises and leads to legal action.

Yes, a valid Consulting Agreement is legally binding. Contract law governs consulting contracts in the U.S. and helps determine when an agreement is valid. 

Examples of when a contract is considered invalid include, but are not limited to:

• The terms are illegal or request illegal activities
• The contract’s terms are vague or impossible to fulfill
• There is a lack of consideration, or payment, in exchange for the services

An agreement can also be voidable in situations such as when coercion, undue influence, or fraud is involved in creating and signing it. 

What should a Consulting Agreement include?

Key elements that a Consulting Agreement should include are: 

• Scope of the services (e.g., deliverables, timelines, goals)
• Payment details (e.g., invoicing periods, contractual interest, applicable taxes)
• Confidentiality, intellectual property, and termination clauses
• Indemnification and liability clauses.
• Dispute resolution

LawDepot’s user-friendly questionnaire prompts you to include all this vital information in your agreement while allowing you to add special clauses unique to your business relationship.

You can create your contract with LawDepot’s customizable Consulting Agreement template. Our questionnaire helps you make a downloadable PDF to share and then sign.

First, select how long the client will need the consulting services (i.e., until the work is complete, ongoing, or until a specific date) and your location. Then follow these steps:

Step 1: Identify the parties

Name your role in the business relationship (e.g., consultant or client), then add the details of both parties.

Either party can be an individual or a company. If your business is providing or receiving services, be sure to put the company's full legal name in your contract.

Step 2: Define the services and compensation

Give full details of the services being provided. The more information you include, the stronger your agreement will be. This can include what deliverables are expected and any major goals and milestones for the business relationship.

Next, add the consultant’s billing details. Rates can include one of the following:

• Hourly
• Weekly
• Monthly
• Annually

Be sure to add the monetary rate and any applicable taxes. LawDepot’s template also allows you to specify whether a retainer is being added to your agreement. 

Then, add your invoicing schedule, payment due dates, and any interest applicable to late payments.

Step 3: Customize your terms

LawDepot’s template allows you to customize specific terms in your agreement to suit your unique professional relationship. Terms you can amend are:

• Termination clause: Allowing you to determine how many days' notice either party must give the other to end the contract.
• Expenses: Outlining any costs the client will reimburse the consultant, and how approval for expenses will work.
• Intellectual property rights: Choosing who will own any intellectual property created during the contracted period.
• Confidentiality clause: Determining the consultant's duty not to reveal client information.

With LawDepot’s template, you can also include any additional clauses or details that may apply to your situation.

Step 4: Finalize your contact

Finally, add your signing details. You can add a signing date or leave it open until you choose one. You may also determine if a witness will be present when both parties sign the agreement. 

A witness is not a legal requirement for signing a Consulting Agreement. However, it can help protect both parties’ interests.

A witness can assist in validating signatures if there are any future disputes or misunderstandings about the agreement. Should there be any questions regarding the agreement’s validity, a witness can also back up the fact that no coercion, forgery, or undue influence was involved while signing.