All contracts have different elements to them but there are a few key pointers that every contract should have.
Agreements have a basic job in the connections consultants have with their clients. Contracts need to tell us exactly the type of work being performed, the timely manner of the contract, what pay you expect and that’s only the beginning.
Without these very important agreements both parties can risk money related misfortunes, negative feelings, harmed relationships and sometimes legal litigation.
It’s very important to have both parties sign a consulting agreement and there is a written document as if the agreement has legal problems there is a written document that can be sourced. If there is litigation the agreement can be used with legal counsel as evidence. It can also help so you aren’t liable for any loss from the other party and also prove that you held up your end of the deal.
Key Elements of a Consulting Agreement or Contract
It is essential that all consulting agreements have the names of all involved, important dates and signatures and the specific substance of the agreement. Work agreement should address some common issues;
The Extent of the Work
The contract needs to detail exactly the obligations that need to be performed and what you promise to the client. The agreement also needs to state how much work will be done and if any work is to be done remotely. If any special resources or equipment is needed, make sure that is written into the agreement.
Tasks change, and a client may decide to change your obligations at any time and they could add more duties. This is a good time to re alter the agreement to suit both parties and in which both parties are happy with so the party doing the work receives extra compensation for extra work achieved. Again, it is very important that everything is in writing so if there are any legal issues involved everything has been written down.
Pay and Invoicing Rates
An agreement should specifically tell us how much the hourly rate will be or the amount of money that will be charged for the venture. No matter how much the hourly rate is or the amount of money you need to be clear on how often the client will be charged, whether it’s monthly, every three months or at the end of the job. The contract should also specify who will reimburse any travel, or any other expenses incurred so everyone knows where they stand.
Timelines and Cut-off times
If you are helping out a client with a specific project make sure you let them know how long it will take. If a client is happy with your services and decides to take you on a long term basis let them know how much it will cost and how often money will be paid, whether it’s weekly, fortnightly or monthly.
It’s really important to work with the client to work out how long it will take so desires are clear. You might want to let them know that you won’t be liable for any missed cut off times due to the client’s neglectfulness.
It is vital to have a leave system in place in case the task or connection doesn’t work out as expected. For example; the agreement may state that all work will cease until you are compensated. Another example is if the client is not satisfied with the work completed then at least two week notice is needed before ceasing the contract.
In the unlikely event of legal litigation it’s always best to be protected. For instance, if the contract is ceased you may be able to hold them liable for any work already done. If you sue you could require the client to cover legal costs.
Contracts don’t necessarily have to be written by legal counsel to be legal but it would be best to speak to legal counsel to get a proper legal contract written up.
Defend your Consulting Business
While contracts are essential in managing your client relationship, having consultants insurance is equally important. Professional liability insurance protects you in regards to claims made in regards to the professional service and advice your consultant gives to your customers.