3 Essentials of a Brilliant Consultancy Agreement:
A company over its life requires a lot of help from independent consultants like Chartered Accountants, Lawyers, Valuers, Engineers i.e. experts in specific fields.Hear we shall discus to 3 essentials of a brilliant consultant agreement.
The company will normally not have them on roles like other employees because that infringes their independent status and advice.
But how do you settle the terms with such Experts? You would have to specify time, scope, remuneration, period, termination etc.
The answer is through a Consultancy Agreement. A consultancy agreement is like an employment agreement but keeps the independent nature of a consultant secured.
There are many free formats of consultancy agreements available on internet. As a human you would get confused as to which one is sufficient as per your requirements.
We have deduced 3 essentials of a brilliant consultant agreement which you need to have so that it fulfills a company’s requirement.
1. Engagement & Service
This clause includes the
- scope of service of consultants i.e. the purpose for which the consultant is hired
- standard or diligence with which the service needs to be performed
- Tools, information required for the purpose.
- Assurance that the consultant his appointment is consistent with the laws of the land.
2. Consultancy Period
Every Project will have a completion date. The period of appointment of consultant needs to be mentioned in the agreement. Some projects are ongoing projects when completion date unknown. An agreement can be customised accordingly.
The agreement will contain a commencement date, a termination date and effect of termination of services like handing over the information back to company, right to get paid for the services provided by consultant etc.
3. Consultancy Fees & Expenses
Consultancy fees can either be on project basis (we normally have this in India) or it can be on the hourly basis. Where ever a project can be distinguished from others companies prefer project basis of paying consultancy fees. There is no legal requirement here as such. Companies can be flexible in deciding the basis of fees.
The consultants are normally reimbursed for the expenses they incur on behalf of the Company. However, a company can put an upper limit to this or fix an amount inclusive of all reimbursements.
Some companies prefer having a clause of Non-Disclosure of information in the agreement as well.
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