Consultancy Agreement or Contractor Agreement?
Posted By: Thomas Shaw, 5:00pm Sunday 07 June 2009
Are you unsure whether you need a Consultancy Agreement or Contractor Agreement? This depends on whether you are engaging the services of a consultant or a contractor. Sometimes the difference between a consultant and a contractor is not always clear. The following blog post has been provided by LawLive
A consultant is a type of contractor who provides high-level expert advice of a managerial, professional or technical nature. Generally it is the advisory nature of the work or the provision of expertise that differentiates consultants from other contractors. Both are forms of external labour under a contract for services, as distinct from a relationship of employer/employee.
A consultant generally works in the following manner:
- They generally work for themselves, a company or a firm
- They provide services to multiple clients during the same period
- Most work is performed on an as-required basis
- Generally a consultant does not require allocated facilities on the client premises
- Generally are engaged for a fixed period of time at an agreed rate of payment
- Provide expert advice with recommendations in the form of a written report or an intellectual product.
- Consultancy Agreements are often used when contracting for professional services such as recruiters, engineers, architects, legal practitioners, public relations, IT and advertising/media firms.
Why use a consultant?
Generally the need to engage a consultant arises when:
- A problem is known to exist but your business does not have the time, the particular expertise or staff to tackle it
- When expertise is needed to introduce new information technology, new techniques and or a fundamental change in the business' structure, procedures, nature or business direction
- When a conflict of views on future policy has arisen within the business and an independent and skilled assessment is needed
- An appraisal of proposed changes is needed to confirm and/or amend the business plans and help implement them
- In smaller businesses, there is often a need to import a particular type of knowledge or expertise for a period to deal with such matters as technology.
It is essential that the nature of the contractual relationship is determined, and that the appropriate written contract is in place, before any work is undertaken. Consultants and contractors, and all other outsourced professionals should also have signed confidentiality agreements to protect your company's proprietary information.
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