Consultancy Agreement (self-employed consultant to client) – medium form

What is a consultancy agreement (self-employed consultant to client – medium) and when should you use it?

A consultancy agreement is an agreement between a company (usually referred to as the “client”) and a service entity (usually referred to as the “consultant”).

The consultant agrees to provide a service to the client for a fee.

The consultant may agree to provide a one-off service for a set fee or continuing services to the client for a predetermined length of time for a fee.

This Self-Employed Consultant Agreement (Medium)  has been specifically drafted to favour the consultant and contains provisions that are not in our short form template (like intellectual property), creating additional protection for the consultant and reflecting current best practice.

This template can be used by a sole trader who is a self-employed contractor where he/she intends to perform services for a company.

It can also be easily adapted for use where the client is a private individual.

This form of agreement aims to reduce the risk that the individual consultant might be deemed to be a de-facto employee of the other party rather than a sole trader who is a self-employed contractor, but whether in law he is self-employed will depend on all circumstances (not just on the terms of this agreement).

Nevertheless, a carefully worded contract ensuring the independence of the individual consultant is a key starting point.

This self-employed version of the agreement should not be used by a consulting company, irrespective of whether that company is used as an individual consultant’s personal service company or other intermediary company.

Where the consultant engaged is a company, the accompanying equivalent form  Consultancy Agreement (Medium) – Company (engaging employees/subcontractors) should be used.

It provides for the consulting company to use staff engaged by it to provide services to its client.

Where further provisions (including the need for insurance, professional advisers or experts to provide the service,  access to the clients premises, arbitration and further contractual protection for the parties) are required, the self-employed consultant should refer to the accompanying long form self-employed consultant agreement (long)

Our Long Form template is the most complete and comprehensive template in our consultancy template suite.

What else might you need?

It’s important to distinguish contractors/consultants, who are self-employed, from employees, not least for tax reasons.

Self-employed persons operate either as sole traders (and would use a contract for services such as this template) or as a part of their own limited company (and they’d use our related template for a consultancy company in those circumstances).

Self-employed contractors/consultants can choose what work they do, and they can decide when and where they complete the work.

They are able to outsource work to others, they provide their own work equipment, and they often work for more than one client at a time.

They’re responsible for arranging their own tax and Social Insurance contributions.

They have fewer rights than employees.

It’s important to ensure that a consultant/contractor is not an employee in disguise – even if that outcome is inadvertent.

Getting it wrong can mean that both parties will face fines from the Revenue.

The wording of this template is carefully constructed to provide clarity about your respective intentions and to avoid ambiguity about the role that the consultant is to play.

Of course, drafting a document is one thing.

You’ll need to ensure that your relationship in practice is consistent with what’s described in this document and conforms to the legal rules.

Our guide contractor or employee also provides helpful background.