Blog #consulting agreement

Consulting Agreement

Sometimes in place of hiring in house experts on various areas of operation organizations plan to hire consultants with expert knowledge and expertise in particular fields for a set period of time or for any particular task. These consultants can either be individuals or organizations. The agreement executed between the organization and consultants defining the rights and obligations of both such parties is known as Consultancy Agreement.

Benefits of a Consulting Agreement

Now, that we are clear to the meaning of consulting agreement let us try and understand the requirement of such writer agreement from a business perspective. Following are the benefits of a consultancy agreement:

• It’s the best choice if the requirement is not of regular nature i.e. it is an event based requirement or only for limited period of time. In such a case it is better not to hire a full time in house expert but an individual expert for the same.
• If the requirement is for critical analysis and expert opinion then hiring a consultant is a wise decision. They are experts and have better understanding of the market and economy. Thus they can provide better guidance and extensive reports based on the requirements.
• The work of consultants in unbiased and thus provides better results and solutions to critical business issues.
• Another major benefit is flexibility in business practice. They provide custom made solutions to their clients and if the services are not satisfactory, one can switch the consultants.
• Lastly, hiring a consultant is a cost effective solution. If a permanent employee is hired then it will incur a regular cost in the form of salary.

Elements of Consultancy Agreement

While executing a consulting agreement some key factors must be kept in mind. Following elements must be included in a consultancy agreement to make it more efficient and effective:

• Description of Parties
• In the beginning of the contract complete details of both the parties must be mentioned in the. Details like name address and authorized representatives shall form part of it.
• Date of Execution
• The effective date of the contact stating the start of their work relationship must be clearly mentioned. The period of the contract is calculated from this date onward.
• Term of Contract
• Along with the effective start date the agreement shall also mention the duration of contract. Or in case the contract is event based that shall also form part of it.
• Details of Services
• The contract must include details of the nature of services the consultant will be providing. This will help eradicate any kind of ambiguity.
• Payment Information
• The agreement shall clearly mention the payment related details like amount of payment, time and mode of payment.
• Restriction and Non-disclosure Clause
• Because of the nature of work, the consultant has access to confidential information, thus the contract shall also include non-disclosure clause and restrict them from sharing such information from third party.
• Rights to Intellectual Property
• The agreement shall clearly define the ownership details for any kind of intellectual property created during the course of the business.
• Liability Clause
• In case of any kind of loss to either of the parties, the liability and indemnity clause shall form part of it. Such loss can be due to defective products, untimely or delayed results etc.
• Termination Clause
• This clause shall state the conditions which will result in termination of the contract.
• Signing
• To make the agreement valid and enforceable in the eyes of law, it must duly dated and signed by all the parties to the contract.

Source url - https://entersliceindia.wixsite.com/mysite/blog/elements-of-consulting-agreement-its-relevance

Nobody can deny that the wave of startups has been increasing the demand of professions like Chartered Accountants, Lawyers, Company secretary and any other financial consultant expert in their field or work. But the startups which are cash-strapped cannot afford the full time services of the consultant who has the expertise as well the experience as per the requirements. Thus come in picture the consulting agreements. It is drafted between the consultant and a company outlining the scope terms and conditions of working together. 

An expert is brought as an external consultant for his professional services for a specific nature of work and not as a full-time employer. A consultant’s services are governed by the consulting agreement which lays down the terms of scope of work to be performed, a specific term period, if mutually agreed upon, payment terms, confidentiality clauses, and the termination clause with a notice period mentioned therein

Consulting agreements benefit both the consultants and the company since it covers all the aspects of the work to be performed in specific timelines and the payment methods. The consulting agreement being a legally enforceable document may also mention a clause of dispute resolution.

It is preferred that a startup must keep a draft of consulting agreement as per their requirements at hand to be able to use it whenever it requires and negotiate with the draft as the base. 

Source url - https://entersliceindia.it.gg/What-is-consulting-agreement.htm