Key things a consultant needs in a consulting agreement or contract

A consulting agreement is one of the most important business documents a consultant can have. It sets out the services you will provide, your client’s responsibilities, payment arrangements, and how both parties will manage potential disputes.

A well-written consulting agreement helps establish clear expectations from the beginning of the relationship. It can reduce misunderstandings, protect your intellectual property, clarify legal responsibilities, and provide a framework for resolving issues if they arise.

Here are ten things to include in your consulting agreement.

1. Scope of work

The scope of work should clearly describe the services you will provide, the expected deliverables, project objectives, and whether the work will be completed remotely, on-site, or through a combination of both.

If the scope changes during the engagement, any additional work should be agreed to in writing before it begins. A clearly documented scope helps manage client expectations and provides a useful reference if questions or disputes arise later.

2. Exclusions

Just as important as explaining what you will do is explaining what you won’t do.

Clearly documenting exclusions helps avoid misunderstandings and prevents clients from assuming additional services are included in the agreed fee.

For example, you may exclude implementation work, ongoing support, software development, staff training, or services provided by third parties unless specifically agreed.

3. Timelines

Your agreement should clearly set out when work will begin, expected completion dates, key milestones, and any ongoing service arrangements.

If you’re working on a retainer, specify the number of consulting hours included each week or month. If project deadlines depend on information or approvals from the client, make this clear in the agreement.

Well-defined timelines help both parties understand their responsibilities and reduce delays.

4. Fees and invoicing

Your agreement should explain exactly how your consulting services will be charged. Whether you charge an hourly rate, daily rate, project fee, retainer, or milestone payments, the pricing structure should be clearly documented.

If clients are responsible for additional expenses such as travel, accommodation, printing, or government fees, these should also be identified before work begins.

5. Confidentiality

Consultants often receive commercially sensitive information from clients.

A confidentiality clause explains how confidential information will be handled, who can access it, and each party’s obligations to protect that information during and after the engagement.

Where appropriate, the agreement may also outline the consequences of unauthorised disclosure.

6. Intellectual property

As a consultant, you will likely develop some of your own intellectual property (IP) that you will use to provide your consulting services.

To help protect your IP from misuse, you can underline in your consulting agreement what you want to happen to any pre-existing IP you hold or new IP you create. Similarly, your client can do the same for their pre-existing IP.

7. Limitation of liability

A limitation of liability clause defines the circumstances in which you may or may not be responsible for losses arising from the engagement.

Many consultants also exclude liability for matters outside their control, including decisions made by clients, third-party actions, indirect losses, or consequential losses, where legally appropriate.

Professional Indemnity insurance may also form part of a broader risk management strategy for consultants providing professional advice.

8. Non-compete and restraint clauses

Some consulting agreements include restraint or non-compete provisions that limit certain activities during or after the engagement.

Depending on the agreement, these clauses may restrict solicitation of staff or clients or the provision of similar services for a specified period.

These clauses should be carefully reviewed to ensure they are reasonable and appropriate.

9. Termination

Both you and your client may enter into a consulting agreement with the intention of meeting each other’s obligations. However, circumstances might arise where one party wishes to end the relationship. Therefore, consider including a termination clause that governs this process.

Your termination clause may outline:

• how much notice is required to terminate;
• what each party is required to do upon termination (for example, you can request each party return the other’s intellectual property); and
• payment required by the client for services completed and expenses incurred up until the point of termination.

10. Dispute resolution

Despite everyone’s best intentions, disagreements can arise.

A dispute resolution clause sets out the agreed process for resolving issues before legal action becomes necessary. This may include negotiation, mediation, or another agreed dispute resolution process.

Having a documented process often helps resolve disagreements more efficiently and preserves professional relationships.

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