A contract for services between independent contractor and a client for provision of services is a consultancy agreement. A Consultancy agreement sets out the scope of work and other terms and conditions of engaging the services of an external consultant. The Consultant could be an individual or a company.

A well drafted consultancy agreement specifies the requirements of what you want the consultants to do for your business and give details of the objectives of the consultancy. You may agree the amount of out-of-pocket expenses the consultant can claim without prior written authorization from you, the amount of time the consultant will devote to your company and how and when he/she will be paid. Furthermore, clauses like who owns the copyright or intellectual property of the consultant’s output may be specified in the consultancy agreement, likewise whether or not there will be any restrictions on the consultant working for competitor organizations and if so what timescales will apply to the restriction, clauses allowing for the termination of the Consultancy agreement in the event of ill performance.

If either party does not honour the terms of a consultancy agreement, a claim for breach of contract or negligence could apply. A well drafted consultancy agreement not only maintains confidentiality of your work but also reduces the risk of litigation.