Business Consultant's Contract Terms and Conditions

Explanatory Notes

Business Consultant's Contract Terms and Conditions

These Contract Terms and Conditions are designed as a set of standard terms for use by a Business Consultant when submitting a proposal to a Client. They are intended as a basis for use by a wide range of consulting firms from engineers to public relations consultants. The Contract Terms and Conditions can accompany the Business Consultant's proposal for services to a prospective Client and any agreement entered into between the Business Consultant and the Client should be made subject to those Contract Terms and Conditions.

These are prepared for a Business Consultant, but they are intended to be fairly balanced. A few comments on the numbered paragraphs:

1. The precise scope of the services will be covered in a separate document. The Business Consultant should ensure that the services are clearly defined so that the scope for argument as to whether or not additional services are being requested can be avoided.
   
2. Frequently the Business Consultant will start work before any formal agreement is entered into and paragraph 2.1 is intended to deal with this.
   
3. Fees and expenses will be dealt with in the Agreement between the parties and these Contract Terms and Conditions set out the standard payment arrangements as well as dealing with out of pocket expenditure, price adjustments (in the event of a long-term appointment) and payment of interest on overdue accounts.
   
4. This makes it clear that the Business Consultant is entitled to rely on information provided by the Client and that the Client has a contractual obligation to make decisions which are needed in a timely manner - all too often a Client will sit on a request for approval which can cause real problems for a Business Consultant.
   
5. This establishes a reasonable standard of care and skill as well as dealing with adherence to programmes and delay.
   
6. This makes it clear that the Business Consultant retains copyright in the documents which he produces and the Client has a licence to use those documents provided that the Client complies with his obligations with regard to payment of fees.
   
7. It is usual for a Business Consultant to nominate an individual who will run a project and, indeed, to provide CVs of personnel. Both items are covered here.
   
8. Liability is never an easy subject. As will be seen, this paragraph requires the Business Consultant to remedy defects for which he/she is responsible for a specified period following completion, and there are then alternative provisions - one excludes all other liability and the other limits the Business Consultant's liability to the level of his/her professional indemnity insurance. Alternative B, of course, assumes that the Business Consultant maintains such insurance, which will usually be the case with anyone involved in design as well as a number of other professionals,  including lawyers and accountants. Legal advice on the question of liability is strongly recommended, not least because the law may impose on a Business Consultant a liability for latent defects which appear after the services have been completed. Under English law, the liability period is usually 6 years and if the contract is executed as a "deed", the period could be extended to 12 years.
   
9. This makes it clear that the Business Consultant may terminate if the Client commits a material breach – in particular, if he does not pay fees and expenses when they are due. It also gives the Client the right to terminate if the Business Consultant commits a material breach. Insolvency is not mentioned here, but it is quite common for a termination clause to allow either party to terminate if the other becomes insolvent. 9.3 makes it clear that the Business Consultant is entitled to all fees and expenses up to the termination date and he maybe entitled to claim more than this if the Client terminates without just cause.  
   
10. This restricts either party from assigning the contract without consent. Subcontracting by the Business Consultant is also restricted, but consent is not to be unreasonably withheld by the Client. For a Business Consultant wanting freedom to sublet any services, this clause would need amendment.
    
11. We assume here that these Contract Terms and Conditions will be governed by English law with the courts finally resolving any dispute. 11.3 suggests the possibility of mediation, but as written, it would need the consent of both parties.