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Contractor / Consultant Agreements

A contractor or consultant generally runs their own business and provide skills and services to others in exchange for a fee.

Contractors have control over the hours they work, how they deliver their service and whether they employ others. They meet their own tax, superannuation and insurance obligations, and do not get paid to take leave.

They are usually hired to do a specific job for a specific term and are paid for that job. True contractors will perform work for more than one employer.

The Australian Taxation Office offers an Employee / Contractor Decision Tool that you can use to help you decide.

Sometimes referred to as a Consultants agreement or a Contractors agreement these types of Service Agreements range from the very simple to the very complex.

The most basic agreement will include provisions that deal with;

  • The scope of the work or the service to be provided. This is often exactly the same as a successful quotation and easily appended to the agreement. Of course you will want to clearly set out any milestones, project requirements or reporting requirements.
  • The term of the arrangement may be from a specific start date to an end date or it may be expressed as the duration of the project.
  • How will the consultant be rewarded? It might be a set fee payable in instalments, an hourly rate, shares in the end product or even a percentage of profit. What ever form it takes obviously it needs to be set out clearly and unambiguously. Expenses may form part of the fee so its important to be crystal clear about what expenses will be paid and what will not.
  • Confidential information is one of the crucial topics you need to discuss with the contractor. Either party could bring confidential information to the table or it may become part of the developing project. Confidentiality provisions forbid either party discussing or revealing confidential information to outsiders or those who might profit from the knowledge.
  • Liability and Indemnities set out if the actions of one party could cause a financial loss to the other and what action can be taken.
  • Dispute resolution clauses will define a clear path as to what should happen if the parties find themselves unable to resolve a dispute themselves.

These most basic provisions will provide a sound foundation for your business relationship and clarify the obligations and responsibilities of the parties.

The parties should each read the document thoroughly to ensure it reflects their requirements. Once it has been signed it becomes legal and binding on the parties.

RP Emery provide several professionally drafted service and consultancy agreements making the task just that little bit easier. These documents are quite flexible and easily adapted to most industries.

Agreements to use when you are the Contractor (or Consultant)

  • Consultancy Agreement - defines the terms and conditions under which you are providing your specialist services to a client.

 

 

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