What Terms Should I Expect to See in My Consulting Agreement?

Many companies enter into consultancy agreements rather than employment agreements with their workers. Why? At times, it is because a treasured member of the organization is retiring or departing, but is full of knowledge and it would be best for the company to still have access to such value. At times, it is part of a severance arrangement and at times, it is project-based. For whatever reason the company and individual decide to enter into a consultancy agreement, the agreement should be clear and set forth specific terms regarding the arrangement.  

So what terms are generally within these documents or what terms should you expect to see? Below are a few provisions (not an all inclusive or required list) that may appear in your agreement:

– a description of the scope of services to be performed;
– the length and term of the engagement;
– that the individual will be an independent contractor and not an employee and therefore not entitled to employee benefits and responsible for taxes on payment;
– timing and method of payment;
– tax indemnification;
– liability indemnification language;
– a confidentiality and proprietary information provision(s);
– workplace invention/ assignment provision(s);
– termination of agreement and notice requirements;
– malpractice and other insurance issues;
– standard contract provisions: choice of law; integration clauses, successors and assigns, modification of agreement, etc.  

If you have received a consultancy agreement or are in the process of negotiating the terms of the agreement, you should seek legal guidance and counsel. It is also important to understand how this new arrangement may be affected by agreements you may have previously entered into with other companies or former employers. Additionally, any agreement should be reviewed prior to execution to ensure that you are protected, that all necessary provisions are included and that you understand the terms and your obligations.  

If you would like such legal counsel or want to understand what responsibilities you have under your agreement should you end the arrangement, contact Sheree Donath by clicking here to schedule a time to discuss your situation.