Are you not satisfied with the amount of profit you’re generating with your current marketing plan? Is there an area of your business that you wish to improve, such as human resources? For valuable advice, an independent consultant can be the solution.

However, seeking guidance and direction from a consultant should be an exchange documented in a consultancy agreement.

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What is a Consultancy Agreement?

A consultancy agreement also known as a consulting contract, or consulting services agreement establishes the rights and obligations between you and the consultant. It outlines what is expected from both parties to minimise the risk of disputes arising in the future.

What Can A Consultant Help You With?

A consultant helps to evaluate the strengths and weaknesses in your business and works with the goal of improving your processes and brand. They have specialised experience in a particular area for example human resources, value creation, customer relationships, marketing, risk minimisation, informational technology and business strategy.

What Does A Consultancy Agreement Usually Cover?

To ensure that there is a smooth relationship from start to end between both parties, the following terms should be incorporated into any consultancy contract:

1. The Parties Involved

A contract would not be a contract without clearly defined parties. The legal names of the involved parties should be first on the list for what to include in a consultancy agreement.

2. Clear Rights and Obligations of Both Parties

Both parties should share a common understanding of what is expected from one another. What is the purpose of the task? What is the end goal? The nature and scope of the business area to be worked on must be discussed extensively and captured in the agreement, as well as the various tasks involved in completing it.

3. Confidentiality and non-disclosure agreements

If sensitive information or exclusive intellectual property is being handled during the course of the work, you should ensure that a clause is implemented to prevent breaches of confidentiality.

4. Duration of the contract

The commencement and termination times for when the consultant will be engaged to perform work for you must be included in the contract. This should be clearly defined.

5. Payment

Just as in any standard employment contract, it is important that payment arrangements are documented. Whether payment is to be in lump sum or made in instalments, the importance of including a payment clause cannot be stressed enough.

Benefits of Hiring a Consultant

There are a few main reasons why you would hire a consultant for assistance:

  • Outside perspective and analysis – In situations where you wish to improve an aspect of your business, an independent opinion can be constructively critical. A consultant can help guide you to the direction for success;
  • Specialised knowledge – A consultant can provide more in depth insights into a specific problematic area;
  • Cost savings – As an employer, you have an obligation to pay for added employment benefits, such as superannuation to an employee. For outside consultants this is not required;
  • Flexibility – The term of work designated to a consultant is usually for a fixed period only and there are no long-term obligations after your contract expires.


If you think engaging the services of a consultant sounds right for your business, make sure your contract with them is drafted properly. Customise a consultancy agreement with LawPath for free online, and have it reviewed by an experienced business lawyer so you can get started on the right path.

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Looking to finalise a consultancy agreement? Contact a LawPath consultant on 1800LAWPATH to learn more about customising your agreement, obtain a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

Carmen Zhu

Carmen is a Paralegal working in our content team which aims to provide free legal guides to facilitate public access to legal resources. With an interest in consumer and professional negligence law, her primary focus is on the importance of expanding legal awareness to business longevity.