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Customizable IT consultant sample contract

Chip Camden presents his standard consulting contract, along with explanations about each section. See if you can modify his contract to fit your needs.
 In the discussion about my recent post on growing your IT consulting business with your friends' help, TechRepublic member patrick asked how to word a canned contract to save time when proposing small jobs. Even for larger engagements, it's a good idea to have a standard contract template that you can quickly customize. It makes you look much more professional, as if you sign new contracts so often that you need to have a streamlined system for producing them.

Here's my standard consulting contract in its entirety, along with explanations about each section. First, the intro:

BUSINESS CONSULTANT AGREEMENT

This agreement is made as of __________________, by and between _______________________ ("Client"), a __________________ company, and CAMDEN SOFTWARE CONSULTING ("Consultant"), a Washington company.

Fill in the blanks with the contract date, the name of your client, and where they are located or incorporated (you might need to change "company" to "corporation"). Naturally, your template should have your company name and location instead of mine.

RECITAL

A. Client desires to retain the services of Consultant for the initial period of twelve (12) calendar months, and Consultant is willing to perform the services called for upon the terms and conditions set forth in this Agreement.

NOW THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter entered into, the parties agree as follows:

1. Terms of Agreement. The engagement shall commence as of _________________ and shall continue to and including _______________. This Agreement can be extended by mutual consent of the parties hereto upon the same terms and conditions for a period of time as agreed upon by the parties.

A one year initial period is usual for me, and then I send them a new contract; this allows me to negotiate changes in rate or anything else on a regular interval. For some short-term projects that have a well-defined scope and that you know you won't renew, you could specify the exact period here.

2. Duties. Consultant shall provide software planning, design and development services to Client.

This is what I do -- change this to say what you do. In my opinion it's best not to be too specific, so you can do whatever the client needs but not get roped into anything you don't want to do. On the other hand, if you're specifically trying to prevent certain types of duties, you might want to barricade yourself in here.

3. Time Requirements. Consultant agrees to furnish Client with consulting services as required by Client and as mutually agreed upon in advance by the parties hereto.

I don't make specific time commitments in contracts if I can help it, although I have capitulated to occasional demands for a specific number of hours. I'd rather keep it as flexible as possible, so I can easily devote attention to emergencies from other clients when they arise.

4. Compensation and Terms. Client shall pay Consultant the sum of ___________________ ($___.00) per hour for services performed. Client shall pay Consultant the sum of ___________________ ($___.00) per hour for travel time when such travel is authorized by Client. Travel time includes all time spent between departure from origination and arrival at destination, inbound and outbound, minus any time therein during which billable services are performed. Consultant shall present an invoice to Client each month for services performed, travel time, and expenses. Payment shall be due in full within 30 days of the date of the invoice.

Fill in the blanks with your hourly rate and your travel time rate, presuming you're hourly. If you have other terms, this section will need a lot of rewording. I generally charge half my hourly rate for travel time. Note the definition of travel time; if I'm able to work while traveling, I bill that time at full rate. You'll also want to modify the terms if yours are other than Net/30.

5. Expenses. Client shall pay all expenses reasonably incurred by Consultant in the course of performing services under this Agreement, as mutually agreed upon in advance by the parties hereto.

I don't get wicked with my clients over expenses. For instance, I usually eat the costs of hardware and software licenses, unless it's expensive and highly specific to their needs. But I like to have this coverage in here so I don't have to eat air fare and hotel charges. Note how "as mutually agreed upon in advance" is intentionally vague. It doesn't have to be in writing -- though I like to get and save an e-mail confirming their commitment, just in case.

6. Confidentiality. Consultant shall treat as confidential and shall not disclose or use for the benefit of any person other than Client any and all information made available or disclosed to Consultant as a result of or related to the Business Consultant Agreement; provided, however, Consultant shall have no obligation hereunder as to any portion of such information which is disclosed by Client to others without any restriction on use and disclosure.

Here's a mini-NDA, so I don't need a separate agreement for confidentiality. It's a pretty broad statement -- essentially, I can't tell anyone anything about the work I do for my client unless they say I can, or they've already made the information public through other channels (inclusive or).

7. Rights and Licenses.

(a) Consultant hereby grants to Client, and Client hereby accepts the entire right, title, and interest of Consultant in and to any software, documentation, and information first produced or created by or for Consultant as a result of the performance of work or the rendition of services under the Business Consultant Agreement.

Most of my clients are vendors of proprietary software (yes, I work for some of the "evil" closed-source establishments), so they demand the full and exclusive rights to anything that I produce specifically for them. If you work for other types of companies, they probably don't care about the copyright to your software, so you might want to reserve those rights instead. You might even just omit section 7 entirely and let default copyright law apply.

(b) Consultant hereby grants to Client, and Client hereby accepts, an unlimited, unrestricted, royalty-free, fully paid, worldwide and nonexclusive license to any software, documentation and information not first produced or created by or for Consultant as a result of the performance of work or the rendition of services under this agreement, but included in said work or services, provided Consultant holds copyright to said software, documentation, or information.

Let's say I developed a useful algorithm a year ago and published it on my blog. It perfectly fits a purpose for my client, so I use it. But I don't want to give up my copyright on that code just because it is now part of their product. So, I grant them a non-exclusive license without any restrictions; they can resell it as part of their product without accounting to me, but I retain the right to use that code as I see fit.

(c) Consultant may utilize publicly distributed software, documentation and information within the solutions provided to Client under the terms of this agreement, provided that said software, documentation, and information is either in the public domain or is licensed for public distribution under terms that do not conflict with the licensing of Client's products in which they are included.

This is a relatively new section, dealing with open source and other publicly distributed material. I let my client know that I won't reinvent the wheel if freely available source code fits the project. But because my client is going to sell what I produce for them, I must insure that any distribution license for this material doesn't force them to choose between changing their license terms or violating the license of the material in question. Thus, for instance, I can almost never use anything that's licensed under the GPL. There's some overlap between (b) and (c) -- they both apply to anything that I've published on Chip's Tips -- but the two categories aren't incompatible.

8. Relationship. Consultant is retained by Client solely for the purposes and to the extent set forth in this Agreement, and Consultant's relationship to Client shall during the terms of this Agreement be that of an independent contractor.

I'm not my client's employee -- I'm independent. Even after more than 17 years, I still love how that sounds.

9. Waiver, Modification, or Cancellation. Any waiver, alteration, or modification of any of the provisions of this Agreement or cancellation or replacement of this Agreement shall not be valid unless in writing and signed by the parties.

Standard legal CYA that prevents "but you told me...".

10. Assignment. Any attempt to assign or transfer any rights, duties, or obligations herein shall render such attempted assignment or transfer null and void.

No bait and switch. They're signing me, and they'll get me. Likewise, they can't push their side of the bargain off on someone else.

11. Liability. In no event shall Consultant be liable for any damages arising from the use of the software developed under the terms of this Agreement.

Very important -- if somewhat unenforceable. But at least they signed to it, so we know where the expectations are.

12. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Washington.

That's where I live and work -- change as appropriate. One of my clients insisted on making it their home state instead. I hope they never add travel to court to the indignity of being sued.

___________________________ (Client)                

_______________________Date _________                       

___________________,  Title: ___________ 

CAMDEN SOFTWARE CONSULTING

  _______________________Date _________             

Sterling W. Camden, IV, Owner

Fill in the name of your client and the name and title of the person who will sign the agreement. Change CAMDEN SOFTWARE CONSULTING and my name to yours. Send it to your client and request that they sign and return a copy (I used to say "send two and get them to send one back," but nowadays we generally e-mail PDFs instead of trusting the postal service to deliver tree flesh). Don't start work until you get the returned copy. Trust me on that.

In preparing this post, I realized just how different the requirements can be for a contract from person to person and from job to job. Before you adopt this version wholesale, please consult with your lawyer to make sure it says what you want it to say. I am not a lawyer, so please don't take my word as legal advice. I assume no liability for damages resulting from the use of any part of this contract for any purpose, including but not limited to kindling a fire, blowing your nose, or making paper airplanes.

Thanks to Chad Perrin (of TechRepublic's IT Security blog), who suggested this subject to me after reading patrick's comment. He also helped me identify some changes I wanted to make to my standard contract before I published it for all the world to see how stupidly vulnerable I was.

Additional sample consulting contracts

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About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

33 comments
amilkh
amilkh

Hi Chip, I am also a software consultant, just starting out. I was thinking of basis my contract off of yours, but was concerned about copyright issues. What are your thoughts? Here's my business page: http://www.amilkhanzada.com/p/consulting.html

price
price

This is a good start to an agreement. There are a few inconsistencies and some things that need to be reworked to make it more effective. 1. If you refer to outside documents, make sure that the documents are referenced in the agreement and if you put a modification clause in the agreement, make sure the outside documents follow that clause. 2. If you do not want to go anywhere to fight a claim, put a phrase stating all claims will be brought in the City of _____________, County of ___________, State of ______________. Also include the law that you want used. The laws of the State of Washington will be used to litigate any claim. Without the forum clause, you could be haled into court in another state or federal district court but still using the laws of the State of Washington. 3. Try not to leave vague terms in an agreement because the courts will more often construe these terms in the best interest of the other party if you created the contract. Just a few suggestions. Be sure to talk with an attorney who can help you draft a powerful agreement that lets you have control.

reisen55
reisen55

I have found a signed agreement also can have legal ramifications, so I work with my clients on a Letter of Intent, much the same as yours but with no signature per se. I do so to openly encourage conversation and communication, that this is a document truly alive and subject to modifications as time and circumstances warrant. It leaves freedom of action for both consultant and client. I openly tell the client this as well, to encourage give and take. So we are talking throughout the year instead of insisting on meeting a portion of this or part of that.

Sterling chip Camden
Sterling chip Camden

For an ongoing agreement, that might get more complicated. Let's say they've been paying you for your work month to month, and then suddenly they stop paying. What right do you have to what you've created for them at that point? I'm guessing that you could probably reclaim anything that was produced solely during the period for which you weren't paid, but I'd like to know more about the law here. If you just made an enhancement to an existing product, ownership could get real hard to define.

wmarr
wmarr

I think the sample agreement is a good one to go by. I do have my own little aggreement with clientele for services rendered. There is a bit of give and take. But it protects me from getting ripped off. In my aggreement. It states "all fees for services rendered, must be paid in full and within 30 days of this aggreement before the repaired item(s) will be returned or delivered to the client. If in the event that after the specified time period has passed and all reasonable means to retrieve payment for said services, the repaired item(s) will be sold at Mr. Marr's descretion (unless an aggreed arrangment is made)in an effort cover the cost of repair(s). All monies garnered from such sale will be the sole property of Mr. Marr." I know that is a lot to put on a work order, but you don't know the kind of people that I have to deal with sometimes. I repair peronal PC's for home owners etc. I don't do consulting for bussinesses, but I need some teeth so people will actully take me seriously when it comes to doing bussiness. I get this" I really need my computer fixed right now, but can I pay you for the work next week?" Ya, right, next week never happens in a lot of cases. Once bitten twice shy. But there are acceptions to my aggreement. If I know who they are, see them everyday, (yes they can be the worst ones) and they usually will see you at the local convenience store, and take you aside to pass you what they owe you. Usually. Sometimes I will ask them how thier computer is working just to remind them. But usually no problems. The ones that you can tell haven't got 5 cents, but a really nice computer (priorities eh?) now those are the ones that DO get the rigid work order with NO flexibility. Not that I want thier computer, just want to make sure I get paid.

sturgeonl
sturgeonl

There were errors while processing your request. - industry: REQUIRED Please update any missing demographic fields to continue. I tried to sign up using your link Automatically sign up today! and got the error msg. I've clicked the 'alert me when new posts are added', so, hopefully you'll add a post or email me directly so that I can become a subscriber - thanks.

A contractor
A contractor

all the rights to whatever you do UNTIL you get paid or there is a legal agreement? I have a software company that is basically refusing to pay and say they own all right because I did it at their request and the rights to the software are their's by contract. (My contract looks alot like Chip's.) I know this is a fine line, but there are times the independent needs some leverage with smaller clients.

herlizness
herlizness

I like to see consultants include a mediation or arbitration clause in these kinds of contracts. Chances are you will never litigate anything but if there IS a problem, mediation can be a much better process. That said, people should be fully aware of how the process works. In some cases, it might be cheaper and more effective to sue and settle than to get entangled in a mediation process, which is not cost-free.

santeewelding
santeewelding

The one that "lets you have control" is the one I won't go near. It's contractual, remember.

apotheon
apotheon

"[i]1. If you refer to outside documents, make sure that the documents are referenced in the agreement and if you put a modification clause in the agreement, make sure the outside documents follow that clause.[/i]" Sometimes, the point of allowing for additional documents is to provide for amendments to the agreement. Especially in the world of software development, circumstances and/or the understanding of circumstances can change rapidly, and adjusting plans for them can be necessary for a positive outcome to the agreement. As long as no amendments are considered valid without the agreement and signatures of both parties, providing for the addition of amendments that didn't occur to the contracting parties at the time the original contract is composed is basically a necessity. "[i]Without the forum clause, you could be haled into court in another state or federal district court but still using the laws of the State of Washington.[/i]" I'm no lawyer, but it seems unlikely that one would go to court in Alabama using the laws of Washington. "[i]3. Try not to leave vague terms in an agreement because the courts will more often construe these terms in the best interest of the other party if you created the contract.[/i]" Are there some specific examples you have in mind?

price
price

Check with an attorney in your area... Some "letters of intent" are binding agreements depending on terms specified in the letter: work, hours, scope of work, etc... Just because the other party did not sign the agreement does not make it non-binding per se. Once you begin work, there is an implied agreement that the other party accepted those terms and you may have accepted some you don't know about. Be careful with letters of intent as the sole means of initiating an agreement.

Sterling chip Camden
Sterling chip Camden

But there are some things I don't want to give and take over, like rate and payment terms.

price
price

Check your local laws and speak with an attorney. Liens usually only allow recovery of up to the amount recoverable under suit. Even if the person agrees to this clause, if they fight the clause, some jurisdictions may claim that the clause is not valid, and depending on the jurisdiction, judge, etc..., the agreement may be deemed invalid and the courts can award appropriate fees but may limit your recovery. Contact an attorney to create a better agreement.

Sterling chip Camden
Sterling chip Camden

... than merely relying on human decency, I'm afraid. Sounds like you found a good pain point.

Sterling chip Camden
Sterling chip Camden

... but it looks like an "Industry" field wanted to be filled before you pressed Submit.

Sterling chip Camden
Sterling chip Camden

I actually had an Arbitration clause in there, and decided to strike it. My client and I could still agree to arbitration, but I didn't want to take legal action off the table. I was hoping to hear from you on this post, herlizness -- given your legal background (thanks for not disappointing me). Could you elaborate on the pros and cons of mediation or arbitration as you see them?

price
price

I was referring to giving the creator of the agreement more control over the agreement. If you are specific and provide for terms that could arise out of the "hope it won'ts" then the agreement has more protection for the creator than the signer.

price
price

>"1. If you refer to outside documents, make >sure that the documents are referenced in >the agreement and if you put a modification >clause in the agreement, make sure the >outside documents follow that clause." >>Sometimes, the point of allowing for >>additional documents is to provide for >>amendments to the agreement. Especially in >>the world of software development, >>circumstances and/or the understanding of >>circumstances can change rapidly, and >>adjusting plans for them can be necessary >>for a positive outcome to the agreement. >>As long as no amendments are considered >>valid without the agreement and signatures >>of both parties, providing for the >>addition of amendments that didn't occur >>to the contracting parties at the time the >>original contract is composed is basically >>a necessity. This is why things should be in writing. It's a CYA. You can make changes on the fly but try and leave a paper trail. Emails can serve as appropriate communication in many jurisdictions. Check your local rules. >"Without the forum clause, you could be >haled into court in another state or >federal district court but still using the >laws of the State of Washington." >>I'm no lawyer, but it seems unlikely that >>one would go to court in Alabama using the >>laws of Washington. Yes you can. It happens. If you engage in activity with another party from another state, then you could be subject to jurisdiction in the state. Venue may be debatable but many times you will be forced to defend in that state but the court sytem would use the laws of the State of Washington in the courts in the State of Alabama. >"3. Try not to leave vague terms in an >agreement because the courts will more >often construe these terms in the best >interest of the other party if you created >the contract." >>Are there some specific examples you have >>in mind? I'm not sure I understand what you are asking for here. I'm refering to the sample agreement posted above. Depending on the common law of the state, the idea is that you created your own agreement so you have a better advantage than the other party knowing what needs to occur or not. The moral is to try and be specific, it could come back and bite you.

herlizness
herlizness

> absolutely true ... the point bears repetition ... and recognition

reisen55
reisen55

Oh yes, Rates and payament terms are NEVER negotiable. I spell those out cleanly and clearly. My big dilemma right now is figuring how to charge hourly for remote support, checking server, workstation, etc from home. No gasoline or travel involved. And I am actually MORE ON SITE in one way than before.

herlizness
herlizness

uh-oh ... my response pattern is becoming too predictable! :) first of all, I agree, I don't like taking litigation completely off the table, and, as I said, depending on the client/history you may want to remain silent on the issue; the hard reality is that some clients can be quickly intimidated into compliance (typically payment) with a lawsuit; as soon as they're served with process, they either pay up or get down to serious negotiations. So you want that as an option in some cases. Of course with other clients, being sued is no big deal and they will not be intimidated and might well file counterclaims. Although it really has little or no legal effect, I like to put in a clause to "first negotiate informally in good faith to resolve any dispute" .... it's a matter of staging, setting expectations ... if there's a problem you can call attention to the clause and it might be enough to get to the table. Normally, mediation is a less formal process in which a (hopefully) skilled and unbiased third party can help the parties sort out grievances and reach some kind of accommodation; typically, they like to facilitate a "win-win" so if someone owes you $8,000, chances are they have some reason for claiming to owe you less than that and you'll probably be encouraged to back off some ... more or less in the interest of everyone "getting something." Of course there are other accommodations which can be made, like you get your $8K but agree to a longer warranty period, or agree to make some code changes, etc. As you can see, it's helpful to have a mediator who knows something about software development so that they have some feel for the concerns of the parties as well as the range of possibilities available to work with. When mediation fails, you can still litigate. Consultants concerned with these issues should probably do a little shopping around for mediators BEFORE they have a problem so you they can get a better feel for how the mediator works and what the fees are. Needless to say, the parties have to agree on a mediator but if you do some shopping you're in a position to nominate a few people acceptable to you. Arbitration is a somewhat different process and basically entails presentation of a case by each party to the panel; after hearing the cases, they will issue findings and a decision, which can be binding or non-binding. I don't see too much point in non-binding arb; mediate instead. Binding arb is a little risky in my view; it's cheaper than litigation in many cases but unless you're very familiar with the process it can be a mine-field. For the small/one-man shop, your best bet is to avoid all of this, contract intelligently only on gigs you know you can do, and keep clients on a short leash so you always have the option of walking away, doing nothing at all and not losing a lot of money. Avoid situations like having an SMB client owing you money in an amount that you NEED. Anyway, those are a few thoughts on the issues ... everyone should keep in mind that serious disputes requiring any kind of formal dispute resolution process are relatively rare. If you address these contingencies in your contracts, also keep in mind that if they are overly detailed and prominent, they might raise a red flag for the client.

price
price

I thought you were being facetious. That is where I was going with the comment though. Something that gives the power back to the agreement creator and not to the other party.

santeewelding
santeewelding

You're still saying, "Hooray for me and fuc you."

price
price

I was refering to the agreed upon sections in the agreement. Expenses & Time Requirements jump out at me. Yes they reference other documents or arrangments but if not available or what is deemed reasonable, then the vagueness will give the other party a better advantage if any litigation were to occur.

apotheon
apotheon

"[i]>"3. Try not to leave vague terms in an >agreement because the courts will more >often construe these terms in the best >interest of the other party if you created >the contract." >>Are there some specific examples you have >>in mind? I'm not sure I understand what you are asking for here. I'm refering to the sample agreement posted above.[/i]" Do you have some specific examples [b]of vague terms in this agreement[/b] in mind?

Sterling chip Camden
Sterling chip Camden

Chad Perrin (aka apotheon) pointed out to me that this would make a good subject for a future post. Expect it.

reisen55
reisen55

Through remote, I caught a critical workstation one early morning that was down and that station had a critical USB drive attached with over 13,000 retina scans. I was able to change the administrative controls for these images to a secondary location (I practice good DR and BCP protocols) and solved the issue BEFORE anyone arrived at the office. You are quite right about timely support. Chip - I'll try to keep good records too.

cpr
cpr

Are you providing less 'service' to your remote customers? You are probably providing better support because you can start resolving issues faster (no need to drive to their location). You probably have more resources (hardware, books, etc.) at your remote site than you carry with you to the client's site. All in all, I suspect you provide better overall remote support - so you might as well charge the same rate as on-site support. Or if you feel a social issue, you might provide your remote clients with a special 10% travel discount. My 2 cents worth.

Sterling chip Camden
Sterling chip Camden

I find that if I keep good, detailed records of the work performed on each day, the hours are rarely questioned.

price
price

You may want to check local laws and speak with an attorney. Some jurisdictions will weigh the cost of arbitration, which can be expensive, v. the cost of the service or product. In some instances, arbitration clauses have been deemed invalid because the amount recoverable is less than the cost of arbitration. Also, if you do use an arbitration clause, create a statement that lets the other party know who will pay for arbitration and which arbitration rules you will follow during the proceedings

PMPsicle
PMPsicle

You need to be careful with mediation and arbitration ... neither one is limited to the common law. Meaning that their decisions are not bound by prior decisions and may not be in agreement with the decisions a court would make in that case. This could be to your advantage or disadvantage. You really need to do your due diligence before selecting any method. And if possible select your mediator/arbitrator based on their own history. Glen Ford http://www.TrainingNOW.ca