Many companies looking for specialized insight or training in a particular sector may hire consultants to aid them with a limited work product at a specific rate for a specified time. These individuals enter into consultant agreements to ensure that there isn’t any confusion about the scope of their work product, their pay, deadlines and other important details if some dispute arises.
Do you know what details you should include in your consultant agreement? Here are some essentials:
A description of your exact relationship
Put it in writing that your consultant isn’t your employee but instead an independent contractor. Make sure that you detail how this means that they don’t qualify for paid time off, health insurance and other standard benefits afforded to employees. Highlight in that agreement how your consultant must pay self-employment taxes on any wages they make.
An explanation of the work to be done
You’ll need to detail the tasks your consultant is to perform on your behalf. You should be very specific in detailing these so that there is no confusion about the extent of their responsibilities. If there are specific things that you won’t be having them do, then you might want to detail these, as well.
Document expected deadlines and compensation
It’s important that you come up with deadlines that you expect your consultant to complete. You should also outline whether you have certain milestones (soft deadlines) that you’d like them to meet along the way. Outline how long they can expect you to take to review their work and render payment.
Your consultant agreement should also detail how you’ll render payment and when. You should detail any procedures you’d like them to follow to ensure that you pay them.
Ownership of intellectual property rights
If you plan to have your consultant review data and report on it, then you may want to put a clause in your agreement that you retain ownership rights to any of the insights they might arrive at. You may also include a clause allowing them to contact you to see if they can use the information later.
A verbal agreement isn’t legally binding. Having such an agreement on paper ensures that you’ll have something on hand documenting your obligations to one another should a dispute arise.