What is a Consultancy Agreement?

A Consultancy Agreement is a contract by which a company engages a consultant to provide services as an independent contractor.

What is a Consultancy Agreement?

A Consultancy Agreement is a contract by which a company engages a consultant to provide services as an independent contractor. If you are looking for Consultancy Agreement Template in UK, click here.

A person engaged under a Consultancy Agreement is not an employee and does not enjoy statutory rights as an employee.

Under a Consultancy Agreement, a consultant is bound to provide their expertise or knowledge by understanding the client’s requirements and finishing the project by the deadline.

What is the difference between a Consultant and a Contractor?

A consultant is a person who is hired to evaluate a client’s needs and provide expert solutions on the basis of their requirements whereas a contractor is hired to work according to the needs and guidelines of the clients.



They are hired for a specific task.They are hired to solve a particular problem or create an optimal solution.
They are experienced personnel but might not always be a subject matter expert.They are the subject matter expert.
They are mainly project-focused.They show role ownership.
They are responsible for a short-term engagement.These are career-focused.

What are the things to include in a Consultancy Agreement?

Consultancy Agreement is widely used by different kinds of businesses to solve their problems and increase the productivity of the organization. Some of the important things to include in a Consultancy Agreement are:

Consultant details: It is very important to include full detail of the consultant along with their registered business information.

Consultancy fee: The amount of money the consultant will be taking to provide his knowledge. There might be different payment schemes like a fixed lump sum, fixed monthly fee, based on the amount of time worked, etc.

Duration: It is the period during which the consultant provides his services. The start and end date of the project.

Services offered: A consultant is normally hired for providing some specialized services. So, a clear breakdown of the services or the agendas of hiring a consultant should be clearly written.

Non-competition clause: this clause will help the party who is hiring a consultant by minimizing the risk of competition. A consultant is obligated to not compete in the same field or to work for a competitor to the contracting party that the advisor previously contracted with.

Force majeure: Is a clause placed in the Consultants Agreement in the case that an extraordinary event prevents either party from performing the obligation. If the period of delay or non-performance continues for a certain period of time the party affected may terminate this agreement by giving a certain period of written notice to the affected party.

Conflict of interest: This clause prohibits the consultant involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations in which the personal interest of an individual might adversely affect a duty owed to make decisions for the benefit of a third party.

Consultant duties and obligations: These are the duties and obligations that the counselor performs to carry out his work in the best way, and any breach of these obligations entails responsibility for the counselor.

Consultant independence: Consultant shall perform the contract as an independent contractor and not be the servant or employee to the client.

How can this contract be terminated?

A Consultancy Agreement can be terminated in two ways. One by written notice and another can be in effect immediately if either party is in breach. Some common grounds for breach are: any misconducts, negligence, or incompetency to perform or deliver, failure to comply with the preset terms and policies. The contract is also dissolved if the company goes into liquidation or bankruptcy.


A Consultancy Agreement is a formal contract between a company and a consultant who has agreed to provide a service to that company. The contract makes certain that both parties are clear on all details concerning the arrangement and what objectives are to be achieved. Most importantly, this includes the exact nature of the service to be provided and in return, the payment requirements.

Also, If you are looking for Consultancy Agreement Template in UK, click here.

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