Appointment of a Business Consultant

Explanatory Notes

Appointment of a Business Consultant

Consultants come in all shapes and sizes and a vast range of specialisms. This form of appointment is designed for a client appointing an individual consultant to provide services over a fixed period. The precise nature of the services is to be set out in the letter or in a schedule which would be annexed to the appointment. 

The appointment is in letter form and countersigned by the Business Consultant. The letter will constitute a contract between the two parties. Any amendments should be signed by both parties.

The letter deals in paragraph 2 with the period during which the services will be provided, and paragraph 3 refers to the minimum time commitments which the Business Consultant may have, but this wording may need to be adjusted if it is not suitable - e.g. where the Business Consultant is undertaking a particular task which does not involve a specified number of hours per day or days per month.

Paragraph 4 deals with accommodation and Paragraph 5 requires regular reports and entitles the client to vary any of the services.

Paragraph 6 specifies the fee arrangements and also deals with expenses while paragraph 7 deals with payment.

Paragraph 8 sets out a benchmark for the standard of skill and care to be applied.

Paragraphs 9 and 10 make it clear that the Business Consultant, even if he/she works as part of the Client's team, is, technically at least, an independent contractor and is not on the payroll of the Company. Advice on the tax implications is strongly recommended here: HM Customs and Revenue in the UK, for example, may require a company to treat an individual as an employee rather than an independent consultant in certain circumstances, one effect of which would be to require the company to deduct tax from the payments due to the Business Consultant on a PAYE (Pay as You Earn) basis.

Confidentiality can be important to a Company where a Business Consultant has access to trade secrets - hence paragraphs 11 and 12. 

Where the Business Consultant has dealings with clients or customers of the Company, it may be sensible to impose not only a confidentiality obligation but also a restriction from seeking business from those people after the appointment comes to an end. Paragraph 13 contains wording to deal with this. One warning here: restrictions of this type have to be reasonable and may not be upheld by a court if they have the effect of depriving the individual consultant from earning a living or if they unnecessarily onerous. Legal advice should be obtained here.

Intellectual property rights may be created by the Business Consultant, but with a consultancy such as this one the Company is likely to require ownership of those rights just as it would with an employee, and this is covered by paragraph 14. Sometimes a Business Consultant will expect to retain ownership, in which case, if this is agreed, the paragraph should provide for the Company to have an irrevocable licence to use the intellectual property rights created by the Business Consultant in the course of his/her services.

Paragraph 15 specifies that the services are personal.

Paragraphs 16 and 17 respectively provide for the Company to terminate the Agreement early on 30 days' notice, or immediately if the services are not being performed satisfactorily. 

Finally, this letter of appointment assumes that the Business Consultant is performing services in the same country as the Company. Should there be an international element; for example, if the client is an English company and the Business Consultant is based in France, a "governing law and jurisdiction" clause should be added.