Whatever the reason for hiring consultants it is important to ensure that the terms on which you engage them are appropriate and will be effective.
Why document your consultancy agreement?
- Even if nothing is signed or written down, there will still be a binding agreement, and without documentation it will be difficult for you to establish what has been agreed.
- If a dispute arises, such as over payment, you will be in a far better position to resolve it if the terms are clear.
- Certain matters which must be in writing and comply with particular requirements to be effective include provisions which assign intellectual property.
Some terms to include in your agreement
Your consultant may make use of materials which infringe other people’s IP rights when carrying out work for you. You would be liable for infringement of these so it is important to ask questions to check that the consultant understands IP. Also,
- Include appropriate warranties and indemnities to manage the risks Intellectual Property.
- You may be discussing business critical information with a consultant, or important know-how which you do not want them to share. You will therefore want them agree to a confidentiality obligation
- The consultant may supply personal data, under the agreement so make sure the terms comply with data protection legislation.
- By engaging a contractor without clearly defining the relationship you risk being deemed to have engaged them as an employee, which is a burdensome legal relationship for the employer.
For help to structure the arrangements carefully to exclude the possibility that a consultant is an employee – note that simply referring to them as a consultant is not enough – and to safeguard your IP contact us for help.
These are only a handful of the questions to be considered when entering into a consultancy agreement.