Consultancy Agreement Template
This Consultancy Agreement (hereinafter called the “Agreement”) is entered into by and between
[name]
[company registration number, if any]
[address]
(hereinafter called the “Consultant”)
and
[name]
[company registration number]
[address]
(hereinafter called the “Company”)
1. Definitions
1.1 As used in the Agreement, the following words have the following meanings when written with a capital first letter:
“Agreement” means this Consultancy Agreement, including Appendix A hereto, as may be amended from time to time in accordance with Clause 9.1 hereof.
“Fee” means the fee payable by the Company to the Consultant for the Work performed under Clause 4.1 hereof.
“Party” or “Parties” means the Consultant or the Company, individually, or the Consultant and the Company, collectively.
“Statement of Work” means a description of the Work, including, without limitation, key persons, tasks, deliverables and completion dates, as set out in Appendix A hereto.
“Work” means the work to be performed by the Consultant for the Company under the Agreement, as set out in the Statement of Work.
2. Scope of Agreement
2.1 The Company hereby commissions the Consultant to perform the Work, and the Consultant hereby accepts the commission, on and subject to the terms and conditions set out herein, including, without limitation, the Statement of Work.
2.2 The Consultant shall perform the Work as an independent contractor and shall not be an employee of the Company for any purpose. The Consultant shall have no authority to enter into any agreement on behalf of, or otherwise to bind, the Company.
3. Duties
3.1 The Consultant shall perform the Work in a professional manner, without knowingly infringing any third-party rights and in compliance with all applicable legislation.
3.2 The Consultant shall report to the Company with respect to the Work. The Consultant’s reports shall be made at such times and in such manner and form as are agreed by the Parties.
3.3 The Consultant shall inform the Company immediately of any anticipated material deviation from the Statement of Work, stating the cause of such deviation, the effects of the deviation and any possible remedial actions.
3.4 The Consultant shall provide, at its expense, all labour, equipment, tools, materials and other things necessary to perform the Work unless otherwise agreed in writing by the Parties.
3.5 The Company shall provide, at its expense, such access to its personnel and information as is reasonably necessary to enable the Consultant to perform the Work.
4. Fee
4.1 [ALTERNATIVE 1:] As compensation for the Work performed hereunder, the Company shall pay to the Consultant a fee of [amount and currency] exclusive of VAT, if any, in accordance with the instalment payment plan set out in the Statement of Work.
[ALTERNATIVE 2:] As compensation for the Work performed hereunder, the Company shall pay to Consultant a fee of [amount and currency] exclusive of VAT, if any, per [working hour/working day of [number] hours].
4.2 [ALTERNATIVE 1:] Payment of an instalment shall be made within [number] working days of the Company having received a correctly rendered invoice and approved the milestone associated with the instalment. The Company shall not unreasonably withhold or delay its approval of any milestone.
[ALTERNATIVE 2:] Payment of the Fee shall be made monthly in arrears within [number] working days of the Company having received a correctly rendered invoice for the Work performed during a month. The invoice shall specify the Work performed, time consumed in performing the Work and the names of the persons performing the Work.
4.3 The Fee shall be inclusive of any and all expenses incurred by the Consultant in performing the Work unless otherwise agreed in writing by the Parties.
5. Work product
5.1 The ownership of all work products of any kind produced by the Consultant in performing the Work, including, without limitation, materials, knowhow, trade secrets, inventions, designs, copyrights, trademarks and other intellectual property rights, shall pass to the Company as the Fee is paid.
5.2 In fulfilment of Clause 5.1 here of, the Consultant shall, upon the Company’s request, deliver to the Company all work products in its possession or control and perform all such acts and do all such things as are reasonably necessary to perfect the Company’s ownership of the work product, at the Company’s expense.
6. Confidentiality
6.1 The Consultant shall keep all information obtained from the Company in connection with the performance of the Work strictly confidential and shall not disclose it to any third party or use it for any purpose other than the performance of the Work without the Company’s prior written consent.
6.2 The restrictions set out in Clause 6.1 hereof shall not apply to any information generally available to the public, obtained by the Consultant in good faith from a third party, independently developed by the Consultant without use of the Company’s information or required to be disclosed by law.
7. Limitation of liability
7.1 In no event shall either Party be liable to the other Party for any special, indirect, consequential, exemplary or incidental loss or damage, however caused, arising out of or relating to the Agreement.
8. Term
8.1 The Agreement shall commence when signed by both Parties and shall terminate upon completion of the Work, unless terminated earlier as provided in Clause 8.2 or 8.3 hereof.
8.2 The Company may terminate the Agreement at any time for any reason subject to [number] working days’ written notice of termination to the Consultant. The Company shall pay the Consultant for any Work performed up to the effective date of termination if such Work was performed in accordance with the Agreement.
8.3Either Party may terminate the Agreement by written notice of termination to the other Party, effective immediately, if the other Party fails to remedy any material breach of the Agreement within [number] working days of receiving written notice of such breach.
9. Miscellaneous
9.1The Agreement contains the entire understanding of the Parties with respect to the Work. The Agreement may not be amended except by written agreement signed by both Parties.
9.2The Agreement is personal to the Consultant, and the Consultant shall not assign any rights or obligations hereunder or subcontract the Work without the written consent of the Company.
9.3Any disputes arising out of or in connection with the Agreement which cannot be settled amicably by the Parties shall be resolved by a court of competent jurisdiction in accordance with the laws of [country] excluding conflict of law principles.
9.4The provisions of Clauses 2.2, 5.1, 5.2, 6.1, 6.2, 7.1, 8.2, 9.3 and 9.4 shall survive termination of the Agreement for any reason.
For and on behalf of For and on behalf of
Consultant Company
Name: Name:
Title: Title:
Date: Date:
Appendix A
Statement of Work
1. Key persons
The Parties’ key persons responsible for [area] are:
[names and contact details]
2. Tasks
The tasks to be performed by the Consultant are:
[list and description of tasks, including e.g. legislation and standards that must be complied with]
3. Deliverables
The deliverables to be provided by the Consultant are:
[list and description of deliverables]
4. Completion dates
The dates for completion of the deliverables by the Consultant are:
[completion dates in respect of each deliverable]
5. Other terms
[e.g. estimate of total fees; instalment payment plan with description of milestones that trigger payment of an instalment; materials to be delivered by the Company; expenses to be reimbursed by the Company; and guidelines for the Consultant’s work reports to the Company]
Consultancy Agreement guide
0. Parties
The consultant's (and your own) name, business registration number and address must be correct. For example, businesses in the same group often have very similar names, and it is not necessarily immaterial which of the group companies you are doing business with. One business may be well-consolidated, another may not.
1. Definitions
Statement of work: Your expectations as regards the work to be performed by the consultant must be set out in the statement of work. Otherwise, the consultant may supply A, while you expected B. The statement of work may be used to describe (i) the names of those of your employees and those of the consultant's employees who will be involved in performing the work, (ii) the tasks to be performed by the consultant for you, (iii) the products to be supplied by the consultant, (iv) the times by which the consultant must supply such products, and (v) other terms such as an estimate of the consultant's total fee or materials which you are obliged to make available.
2. Scope
Clause 2.2: The relationship between you and the consultant is not an employer/employee relationship, and as a result the consultant cannot enter into agreements on your behalf, and the consultant himself must pay any tax due etc. on the fee received from you. Please note that the Danish tax authorities (SKAT) may object to this arrangement if the nature of the collaboration between you and the consultant can be likened to a contract of employment.
3. Duties
Clause 3.1: If the consultant is, for example, to help develop a product, then you must consider whether the consultant should be obliged under the agreement to ensure compliance with the legislation in some or all of the countries in which you intend to sell the product. Any such requirements can be set out in the statement of work. Clause 3.2: Any special requirements as concerns the consultant's reporting on the progress of his work, for example in the form of written weekly reports with specific contents, can also be set out in the statement of work.
4. Fee
Clauses 4.1 and 4.2: If you want to avoid being faced with exorbitant bills from the consultant and having to pay far more for a service than expected, you may – rather than agreeing to pay the consultant in instalments based on the number of hours worked (alternative 2) – agree a fixed fee to be paid in step with your approval of the agreed milestones (alternative 1). Clause 4.3: The agreement is based on the assumption that the consultant's fee is an 'all-inclusive' fee. If you agree otherwise with the consultant, you must ensure that the agreement specifies very precisely what you have to pay over and above the fee.
5. Work products
Clause 5.1: It is important that you retain ownership of the work product(s) resulting from the consultant's work as you will otherwise not be able to do with the work products as you please. For example, if the consultant has produced a product design, you will be able to sell products based on the design, but you will not be able to sell the design itself unless you own it. Clause 5.2: You should keep an eye on what the consultant is doing. If, for example, the consultant produces an invention, filing for patent protection and obtaining the exclusive right to use the invention may be very valuable for you.
6. Confidentiality
Clauses 6.1 and 6.2: Irrespective of the fact that the agreement contains provisions which are designed to limit the risk of the consultant disclosing confidential information to a third party or abusing such confidential information, it is important that you do not disclose more confidential information to the consultant than strictly necessary. As soon as you disclose information, you lose control of what happens further with such information. It is also important that you mark all confidential information which you hand over to the consultant in physical form as 'CONFIDENTIAL' or in a similar fashion.
7. Limitation of liability
Clause 7.1: The agreement states that neither you nor the consultant is liable for any indirect loss or damage. Indirect loss or damage may take the form of the loss of profit on sales due to the consultant's failure to supply a product design to you on time. It may also be a loss of profit for the consultant due to your sudden and unwarranted termination of the collaboration.
8. Term
Clause 8.3: If you want to ensure that you can withdraw from the agreement in the event of a particular unfortunate situation arising, then you should write this into the agreement. For example, if you are dependent on the consultant supplying a product design by a certain date, then you can write into the agreement that you will be entitled to cancel the agreement if this date is exceeded by more than, e.g., 10 working days.
9. Miscellaneous
Clause 9.3: It must appear from the agreement which country's law is to apply in the event that a dispute arises which the consultant and you are unable to settle amicably. If both you and the consultant are Danish, Danish law would be the natural choice. If the consultant is not Danish, however, you might insist on Danish law, and the consultant on the law of his home country. In such a case, choosing a third country's law could be an option. However, you should never accept the law of an 'exotic' country (e.g. IRAN legislation), as it may be difficult to predict how a dispute will be settled.