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

What’s a consultancy agreement (client to self-employed consultant) (medium form), 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.

This template is for use by any business looking to take on a consultant but where the consultant is a self-employed individual or sole trader, and not a company.

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

There is great advantage in presenting your own contract, drawn to protect your interests.

It is an umbrella version suitable for either a single instruction, or for multiple or continuing assignments.

It is drafted to be acceptable to a consultant but strongly protects the client.

This form of agreement aims to reduce the risk that the individual consultant might be deemed to be a de-facto employee of the client 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 where the consultant works through a consulting company, irrespective of whether that company is used as an individual consultant’s personal service company or other intermediary company.

If you are looking to take on a consultant where the consultant is a limited company you should use the following template instead:

Consultancy agreement with a limited company 

Where further provisions (including the need for insurance, professional advisers or experts to provide the service,  access to the client’s premises, arbitration and further contractual protection for the parties) are required, the client 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.

If you are looking for a simpler Agreement, then you should refer to our self-employed contractor agreement (short)

What else might you need?

It’s important to distinguish contractors 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 contract for services for a consultancy company in those circumstances).

Self-employed contractors 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 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.

You should also consider having a non-disclosure agreement to protect any proprietary and confidential information you may need to share with the consultant to enable him/her to advise you correctly.

Use our non-disclosure agreement for consultants/contractors