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:
1.
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.
2.
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.
3.
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.
4.
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.
5.
Payment Information
The agreement shall clearly mention the payment related details like
amount of payment, time and mode of payment.
6.
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.
7.
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.
8.
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.
9.
Termination Clause
This clause shall state the conditions which will result in termination
of the contract.
10.
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.
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