Consultancy agreement

Author: Jason Galbraith-Marten

When to use this model consultancy agreement

Use this model agreement when drafting a contract for a consultant.

Clause wording

This agreement is made on [date].

Between:

  • [Name of organisation] whose registered offices are at [address]; and
  • [Name of consultant] whose address is at [address].

It is agreed as follows:

Definitions

In this agreement the following words and expressions shall have the following meanings unless the context otherwise requires:

Associated employer

Any company that has an equity share capital is more than 25% and less than 50% for the time being beneficially owned by the organisation or any holding company of the organisation for the time being and from time to time and any subsidiaries of the organisation or of any such holding company.

Board

The board of directors of the organisation for the time being and from time to time or any committee properly delegated powers by it.

Commencement date

[ ]

Confidential information

The information and trade secrets referred to in the confidentiality clause below.

Directly or indirectly

Whether as principal or agent; whether alone, jointly, in partnership with another or for or on behalf of another; whether as a shareholder, director, agent, principal, partner, consultant, employee or otherwise; or by virtue of providing direct or indirect financial assistance.

Fee

The fee payable below as altered from time to time.

Group

The organisation and any holding company of the organisation from time to time and any subsidiaries from time to time of the organisation or of any such holding company together with any associated company of any of them.

Normal place of work

[ ]

Periods of restriction

"First period of restriction" and "second period of restriction" mean the periods of [six] and [nine] months respectively following the termination of the agreement.

Services

Means the work to be provided by you under this agreement and which includes [details] together with such other services as may from time to time be required by the organisation.

Term

The period commencing on the commencement date and terminating on the termination date.

Termination date

The date on which this agreement ends.

Scope of agreement

This agreement sets out the terms under which you shall provide your services for and at the direction of the organisation on a freelance basis at such time or times as may be agreed between you and the organisation. The organisation shall not be obliged to provide you with any work and you will not be obliged to perform any work unless and until the organisation has requested and you have agreed to perform such work.

You agree to perform for the organisation the services. It is specifically agreed that you will devote not less than [one] day per week in the performance of the services and you agree to devote such additional time as may in the opinion of the organisation be necessary to properly perform the services on time.

You will consult and collaborate with such persons as the organisation shall from time to time specify in relation to the services and in particular you will liaise with [ ] in respect of the day-to-day performance of the services.

The organisation will reimburse you for all expenses properly, wholly and necessarily incurred by you in the performance of your duties, upon production of all relevant receipts.

This agreement shall terminate on the expiry of at least three months' written notice from you or the organisation.

Scope of obligations

You agree:

  • to undertake and provide the services on a first call basis in accordance with any brief and deadline set by the organisation;
  • to carry out the services in an expert and diligent manner and to provide your services to the best of your financial accountancy, commercial, technical and creative skill;
  • to the best of your ability, promptly and faithfully to comply with and observe all lawful and proper requests which may from time to time be given to you by the organisation;
  • in the case of illness or accident preventing the performance of the services in accordance with this agreement, promptly to notify the organisation of such illness or accident;
  • at any time, promptly on request, to deliver to the organisation all documents, correspondence, records, films, videotapes, computer hardware and software and other property of the organisation in your possession relating to the services, the organisation, its business and affairs; and
  • not to accept directly or indirectly any money, gift or other benefit offered to you by any third party in connection with the provision of the services and you undertake immediately to disclose to the organisation the existence of such an offer and all information as it may require in respect of such an offer.

Fee

The organisation will pay you the fee, plus VAT if appropriate. You will, if registered for VAT, render to the organisation VAT invoices.

The fee shall be paid at the rate of [ ] per month payable in arrears within 30 days of the presentation of a proper tax invoice by you.

For the avoidance of any doubt, you are not be entitled to any other fees, income or benefits apart from the fees (and any expenses) payable in respect of the services which you may perform. Furthermore, as a consultant, you will be liable for the payment of any tax or social security contributions payable on any fees or expenses paid to you by the organisation.

You authorise the organisation to deduct from the fee such sums on account of any losses suffered by the organisation as a result of your proven negligence or breach of duty in your performance of the services and/or in the performance of your duties for or on behalf of the organisation under this agreement.

Office facilities

The organisation shall provide you (upon reasonable prior written request) with such office facilities including the provision of secretarial support as it shall deem necessary to enable you to perform the services.

Travel

You agree to make such journeys and attend such events on the business of the organisation as may reasonably be required.

Relationship

Nothing in this agreement shall be construed as constituting the relationship of organisation and employee and you hereby represent, warrant and undertake to the organisation that you are an independent contractor and not an employee of the organisation and will bear exclusive responsibility for the discharge of income tax and the payment of national insurance as a self-employed person. You hereby indemnify and shall at all times keep the organisation fully and effectively indemnified in respect of all income tax, national insurance and VAT which is, or may become payable, by the organisation or organisation in the group in respect of the fees. The organisation shall be entitled to set off amounts due under such indemnity at any time against sums otherwise payable to you under this agreement.

You shall make no other use of the organisation's name except that which may be necessary to identify the fact that you are a consultant to the organisation; in particular you shall not be empowered to make, or attempt to make, any final or binding commitments on behalf of the organisation without the prior express written consent of the board from time to time of the organisation.

Insurance

As a consultant, you are responsible for all matters relating to your own personal safety and that of your possessions and consequently agree to take out and maintain adequate insurance against any loss or damage which you or your property may suffer during your performance of the services. It is a condition of the contract that you also take out and maintain in force professional indemnity insurance in terms satisfactory to the organisation, and exhibit the policy to the organisation if requested.

Termination

The organisation shall be entitled upon written notice to you to suspend or terminate this agreement in the event of your incapacity or default. Upon suspension or termination of this agreement the following provisions shall also apply:

  • all rights granted to the organisation in respect of work done and services rendered by you and the products of such work and services prior to such suspension or the termination date arising for any reason shall not be prejudiced or affected;
  • the organisation shall cease to be liable to pay you the fee during the period of suspension or after the termination date, except for that which has already become due and payable; and
  • the organisation may nominate a third party to continue the services.

Without prejudice to any remedy the organisation may have against you, this agreement may be terminated by the organisation by notice in writing with immediate effect if:

  • you wilfully neglect to perform your duties or obligation under this agreement and, in particular, fail to remedy any fault in work produced by you within a reasonable period of time of being notified of that fault;
  • you act in any way which in the opinion of the organisation brings or will bring the organisation into disrepute;
  • you commit any breach of any of the provisions of this agreement which (if capable of remedy) shall remain unremedied 30 days after notice of such breach has been served by the organisation on you; or
  • you have at any time become or are unable promptly to perform the services by reason of death, ill health or accident to the extent that the provision to or performance for the organisation of the services would be severely jeopardised.

This list is not exhaustive.

Confidentiality

Subject to the above, you shall during the continuance of this agreement and after the termination date observe strict secrecy as to the affairs and dealings of the organisation and (1) shall not during the term except in the performance of your duties or after the termination date, without the prior written consent of the board, make use of or divulge to any person and (2) during the term shall use your best endeavours to prevent the publication or disclosure of:

  • details of the requirements of contractors (whether they be clients, suppliers, consultants or other contractors) of the organisation or any other organisation with the group, including, without limitation, the fees and commissions charged to or by them and the terms of business with them;
  • details of any advertising, marketing or promotional campaign which the organisation or any other organisation within the group is to conduct;
  • any information relating to:

- expansion plans, business strategy, marketing plans and sales forecasts of the organisation or any other company within the group;

- financial information, results and forecasts of the organisation or any other company within the group;

- details of the employees and officers of the organisation or any other company within the group and of the remuneration and other benefits paid to them;

  • information relating to pitches and tenders contemplated, offered or undertaken by the organisation or any other company within the group;
  • information relating to research activities, inventions, secret processes, designs, formulae and product lines undertaken by or on behalf of the organisation or any other company within the group;
  • confidential reports or research commissioned by or provided to the organisation or any other company within the group;
  • any trade secrets of the organisation or any company in the group including know-how and confidential transactions; and
  • any information which you are told is confidential and any information which has been given to the organisation or any other company within the group in confidence by clients, suppliers or other persons.

The restrictions shall continue to apply after the termination of this agreement howsoever arising without limit in time and shall include information in the public domain for so long as you are in a position to use such information more readily than others who have not worked for the organisation.

You shall not publish any literature, deliver any lecture or make any communication to the media (including the press, radio, television or the internet) relating to the organisation's business or to any matters with which the organisation may be concerned without the prior written authority of the board.

Restrictions

You hereby agree with the organisation that you will not:

  • during the term and until the expiry of the first period of restriction directly or indirectly on your own account or for any other person, firm or organisation be concerned or interested in any other business dealing in any products or services the same as or similar to the restricted products or services in the United Kingdom;
  • during the term and until the expiry of the first period of restriction directly or indirectly on your own account or for any other person, firm or organisation be concerned or interested in any other business dealing in any products or services the same as or similar to the restricted products or services in any relevant territory;
  • during the term and until the expiry of the first period of restriction directly or indirectly, on your own account or for any other person, firm or organisation in competition with the organisation, perform any services in the same or similar capacity to the services you performed for the organisation during the 12 months prior to the commencement date in relation to any products or services sold, marketed or developed in the United Kingdom which are the same as or similar to the restricted products or services;
  • during the term and until the expiry of the first period of restriction perform any services for the major competitors of the organisation currently known as [details];
  • during the term and until the expiry of the first period of restriction directly or indirectly, on your own account or for any other person, firm or organisation in competition with the organisation, perform any services in the same or similar capacity to the services you performed for the organisation during the 12 months prior to the commencement date in relation to any products or services sold, marketed or developed in any relevant territory which are the same as or similar to the restricted products or services;
  • during the term and until the expiry of the first period of restriction, directly or indirectly on your own account or for any other person, firm or organisation in competition with the organisation, perform any services for any named client with which or whom you have had material dealings during the period of 12 months prior to the commencement date in the same or a similar capacity to the services which the organisation has performed for such named client during that period;
  • during the term and until the expiry of the first period of restriction directly or indirectly on your own account or for any other person, firm or organisation in competition with the organisation perform any services for any client with which or whom you have had material dealings during the period of 12 months prior to the commencement date in the same or a similar capacity to the services which the organisation has performed for such client during that period;
  • during the term and until the expiry of the second period of restriction directly or indirectly, on your own account or for any other person, firm or organisation in competition with the organisation, solicit or accept the custom of, canvas or approach a client;
  • during the term and until the expiry of the second period of restriction, induce or attempt to induce any client or supplier of the organisation to cease conducting business with the organisation or to reduce the amount of business conducted with the organisation or adversely to vary the terms upon which its business is conducted with the organisation;
  • during the term and until the expiry of the second period of restriction either on your own account or for any person, firm or organisation directly or indirectly employ any person who has during the 12 months preceding the termination date been a director or senior employee (that is, an employee earning over [ ]) of the organisation with whom you have had material dealings in the period of 3 months prior to the termination date;
  • until the expiry of the Period of Restriction either on your own account or for any person, firm or organisation, directly or indirectly solicit or entice away or endeavour to solicit or entice away any person who has during the 12 months preceding the termination date been a director or senior employee (earning over [ ]) of the organisation with whom you have had dealings in the period of 3 months prior to the termination date;
  • without the consent of the organisation, at any time divulge to any person, firm or organisation the contents or nature of or make use of any material of whatsoever nature in which the copyright is owned by the organisation or by any client of the organisation; and
  • after the termination date present yourself or allow yourself to be held out or presented as being in any way connected with or interested in the business of the organisation (unless you remain a director or employee or consultant of the organisation).

You shall not induce, procure or authorise any other person, firm, organisation or organisation to do or procure anything that, if done by the executive, would be a breach of any of the provisions above.

You agree that the restrictions above are reasonable and necessary for the protection of the confidential information and the organisation and the group and you further agree that such restrictions are not severe in all the circumstances.

The restrictions above shall not prevent you from being a minority holder of securities that are listed and/or dealt in on the Stock Exchange or in the Alternative Investment Market of the London Stock Exchange.

While the restrictions set out above are considered by the parties to be reasonable in all the circumstances, it is agreed that if any one or more of such restrictions shall taken either by itself or by themselves together be adjudged to go beyond what is reasonable in all the circumstances for the protection of the legitimate interest of the organisation or the group but would be adjudged reasonable if any particular restriction or restrictions were deleted or if any part or parts of the wording thereof were deleted, restricted or limited in a particular manner, then the restrictions set out above shall apply with such deletions, restrictions or limitations as are necessary.

Each of the sub clauses above shall be treated as a separate obligation and shall be separately enforceable as such.

References above to acting directly or indirectly shall include (without prejudice to the generality of that expression) references to acting alone, jointly with, on behalf of, by means of, or through the agency of any other person, firm, business, organisation or corporation.

Return of property

You shall promptly, whenever required by the board and in any event upon the termination of this agreement, deliver to the organisation all notes, memoranda and other correspondence, documents, back-up data, computer disks, cards, tapes and records, videos, compact discs, papers and property, belonging to or relating to the affairs of the organisation or any other organisation in the group or any client of the organisation or of any organisation in the group, which may have been prepared by you or have come into your possession during the course of or as a result of your employment with the organisation and/or your consulting with the organisation and shall not retain any copies and shall not permit them to be used by any third party.

No assignment

You are entitled to assign the benefit or burden of this agreement or ask any third party to perform a part of or assist in the performance of the services under any circumstances if you get the express written consent of the organisation.

Waiver

No waiver of any breach of any provisions of this agreement shall constitute a waiver of a prior, concurrent or subsequent breach of the same or any other provisions and no waiver shall be effective unless made in writing.

Health and safety

You agree to comply with the organisation's safety policies and practices. You are responsible for taking care of yourself and other persons who may be affected by your acts or omissions.

Prior agreement

This agreement shall supersede any other agreement or arrangement whether written or oral with respect to the provision of services by you to the organisation. For the avoidance of doubt, this agreement supersedes the contract of employment made between you and the organisation on [ ] and which it is now agreed has been terminated without any liabilities arising out of or under its terms being owed to you by the organisation and it is now agreed that any post-termination restrictions imposed on you by that agreement shall remain in full force and effect save to the extent that they conflict with the provisions of this agreement.

Neither party shall seek to rely upon any representation that may have been made to the other prior to the making of this agreement.

No variation of the terms of this agreement shall be binding on either party unless it is made in writing.

Law

The construction, validity and performance of this agreement shall be governed by the laws of England and Wales whose courts shall have exclusive jurisdiction.

This agreement has been duly executed as a deed on the date stated above.

Signed by:

[ ]

For and on behalf of [ ]

In the presence of [ ]

Signed by:

[ ]

In the presence of [ ]

Witness signature:

[ ]

Witness name:

[ ]

Address:

[ ]

Occupation:

[ ]

How to use this document

This is an example document and should be adapted to suit your circumstances.

Law relating to this document

None.

Notes

None.

Warning

None.

Future developments

None.