A consultancy agreement is the contract that exists between a consultant and his or her client which covers the terms of the engagement.

Application for small business people

A small business may wish to hire a consultant for a specific purpose, for example to work on a short term project or to improve business processes. Consultants are generally experts in their fields and are available on a contractual basis for other businesses to hire.

Depending on their level of experience and expertise, consultants can be very expensive for small businesses. It is therefore very important that the client imposes clear guidelines to avoid any unnecessary expenses. The best way of doing this is to enter into a mutually agreeable consultancy agreement which clearly sets out the terms of the engagement.

The consultancy agreement will set out the parameters of the work the consultant is to undertake. It will also detail the obligations of the client, for example, making necessary documents, employees or equipment available to the consultant. It is advisable for the consultant and the client to meet regularly to review progress and address any issues.

6 key things to consider

There are several important issues that you should consider before entering into a consultancy agreement. These include:

  1. Do you have the right consultant for the task?
  2. Exactly what work do you want the consultant to perform?
  3. Will the consultancy agreement expire on a set date or when a specific project is complete?
  4. What are the payment terms for the consultant? Is it an hourly rate, daily rate or some other arrangement?
  5. What happens if the project takes longer than you originally envisaged?
  6. Are there any conditions on the agreement and are you able to terminate it if you no longer require the consultant’s services?

Joe Kafrouni, Legal Practitioner Director, Kafrouni Lawyers


The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Small business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

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