By Net lawman New Zealand

02/08/2011
Over the past 10-15 years the employment market had become far more flexible and an increasing number of companies now use consultants, whether for IT consultancy, management consultancy, training or specific projects. Likewise, many individuals now prefer to offer their services on a consultancy rather than employment basis.
A consulting agreement is a contract between a consultant and a client that identifies the terms and conditions related to the type of consulting services that the consultant will provide. In addition, the terms of the legal contract also includes provisions related to the responsibilities of the client, both in terms of payment and support of the consultant’s efforts. A consulting agreement may be very specific regarding the terms of the relationship, and include specific start and end dates, or be somewhat broad and open ended, depending on the wishes of the two parties involved in the legal agreement.
The reality is that when trying to commit the relationship between a consultant and a client to a written agreement, the term and the nature of the services along with the many other points that should be included have to be written with specificity. Let us cover some, but certainly not all, of the kind of provisions that have to be so covered.
Definition of the Services
This is often the hardest part of the agreement since often the services are general in nature. However, from the standpoint of drafting a meaningful agreement, these services must be set forth in as much detail as possible. Without such definition, there is no way to tell whether or not the consultant has performed his or her obligations under the agreement.
Intellectual Property It is always essential to have a clear understanding of who will own the results generated during a consulting project and to ensure that substantial and valuable background research activity and knowledge is not transferred inadvertently
Confidential Information & Publication Confidential information (including “know-how”) can be very valuable and its use should be controlled through confidentiality and non-disclosure provisions in contracts. In consulting contracts it is generally reasonable for the client to assume that the consultant will not publish information acquired during the course of the consultancy, either about the work itself or the client’s business interests.
Payment Schedule
Must be defined clearly in contract, otherwise it may lead to dispute.
Governing Law Agreement must be draft in such a manner as to comply with current legislation of country concern. It is to avoid any uncertainty in the terms of the agreement. Net Lawman has drafted all its templates of consultancy agreement according to the governing law of New Zealand.
Notebooks Consulting activity may produce new intellectual property and it is useful to keep a notebook detailing the work done specifically under the business consulting agreement so that it is clear what belongs to the client and what does not
Termination Provision
The reality is that many agreements do not run a smooth course for their entire duration and disputes often arise, therefore, it is advisable to include a provision of termination in Agreement.
Possible advantages of Consultancy Agreements:
• Flexibility
• Useful for bringing in specific expertise
• Possible tax saving for company using consultant
• Possible avoidance of contractual notice payments, redundancy and employment law risks and liabilities
• Independent and impartial advice
Possible disadvantages of Consultancy Agreements:
• Fees can be expensive
• Employment position not always clear cut, even if consultancy agreement signed and consultant agrees initially they are self employed
• Tax position not clear cut
Net Lawman’s Consultancy Agreement for New Zealand Our Consultancy Agreement template sets out the terms of the relationship between your business and the consultant. The services the consultant will provide shall be outlined in the Consultancy Agreement so that each party understands their role within the relationship. The agreement template can be fully customised to include any special needs.
Our consultancy agreement includes following important provisions:
· Consultant's obligations
· Consultant's status
· Consultant's fees and expenses
· Duration and termination
· Data protection
· Insurance
· Confidentiality
· Intellectual property
· Appropriate legal provisions - warranties, exclusions, indemnities
· Explanatory guidance notes taking you through, step by step
Our Consultancy Agreement has been created by our expert team of in-house Solicitors and Barristers to ensure it is legally binding and comprehensive. All our templates are regularly updated to comply with domestic legislation of New Zealand.