Exclusive Consulting Agreement

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Exclusive Consulting Agreement

The Agreement is a legal contract between a client and a consultant in the service business. It intends to get the client, his essential services from a consultant. It is a mode of service terms in the Agreement which explains the nature and purpose of work, client and consultant relationship, terms of payment and protecting the rights of the clients’ work. The consultant renders the service according to the requirement of the client. Typically, in an exclusive consulting agreement, a client is appointing a consultant to get the support, professional advice, documentation, software, and other deliverables of the services. It is appropriate for several domains such as IT firms, Educational institutions, Manufacturing Industries, Customer related firms, Pharmaceutical industries, Printing and Online Bookseller firms, Scientific research industries, Agricultural farms, and Telecommunications industries.

An exclusive consulting contract gets referred in various forms like –

  1. Consulting Contract
  2. Deals of services
  3. Marketing Consulting agreement
  4. IT Consulting Agreement
  5. Technical Consulting agreement
  6. Advisor agreement
  7. Professional services agreement

When Do You Need Exclusive Consulting Agreement?

Here are some essential needs of Exclusive Consulting Agreement –

  • A client who needs to enhance the current business
  • A client to expand or remodel his company
  • To achieve higher success rates out of the client’s trade dealings
  • Taking risks with new dealings

The Exclusive service term finds its use in applications like professional services, corporate contracts, temporary government contracts, and website development. A template for the exclusive consulting Agreement does not have to be a long, complicated document. Other terms may include Agreement relating to conditions and termination, indemnification, independent service clauses, assignment and transferability, governing law, and the dispute resolution forum. No change in, addition to, or waiver of the terms and provisions of the contract shall be adhering upon either party unless approved in writing by its authorized representative. The failure by the consultant to object to or sanction action by any behavior of any of the client constitutes a breach, or is in violation, of the Agreement.

Inclusions of Exclusive Consulting Agreement

Some of the inclusions of Exclusive Consulting Agreement are –

  • If one of the concerned parties breaches the commitment to the exclusivity clause in consulting Agreement or an exclusivity clause in the service agreement, then the other party terminates the contract.
  • If the client ends the deal, the consultant can only claim a part of the fee for just the work carried out up to the date of termination of the Agreement.
  • The termination clause is conditional where one of the parties involved will communicate to the other party in writing, the details of the type of the breach, the required compensation, and the timeline required to pay or rectify the violation.
  • If the consultant terminates, the client can claim to cover his loss by the contract.
  • As for the pros and cons, there may be arising of disputes between the parties who can dissolve with the help of arbitration, legal proceedings with a sign from the parties in the Agreement.
  • Either party may cease the Agreement, with or without reason, on specific days advance with written notice to the other party, unless otherwise mutually agreed between the consultant and client.

The exclusiveness of the contract abstracts the binding of the consultant to the client in a manner that the consultant cannot pursue a similar service, as mentioned in the Agreement to any other client.

How to Draft Exclusive Consulting Agreement?

There is no fixed feature of drafting an exclusive consulting agreement, and every consulting Agreement needs to include some essential elements such as:

  • The validity of the contract can be Short term/Long term/Permanent.
  • Elaboration of the operated services.
  • Describing the considered features.
  • Clarifying the specifics of Concerned parties involved.
  • Title of the Consulting Agreement.
  • Signatures with precise information about the time, date, place, and party who signs the contract.

Key Terms/Clauses in Exclusive Consulting Agreement

  • Defining the Work Scope
    Identifying the exclusive services term is vital to describe the work. For instance, a web developing professional specifies technical support, maintenance, and upgrade services. Services that consultant does not agree to perform is as essential to the conditions he agrees. An adequately drafted statement of work or scope of work serves best for alleviating or avoiding any confusion related to performance.
  • Defining Business Relationship
    It gets required for an exclusive consulting agreement to state the relation that the two parties hold. For example, a client does not pay a consultant like an employee; therefore, it may get subjected to self-employment tax. However, in cases where consultants operate an incorporated entity, the root corporation and not the individual will sign and act under such an agreement.
  • Setting the Terms of Payment
    An exclusive consulting agreement may also include provisions to mention payment amount, schedule, and frequency. Along with that, it is to be ensured by the consultant that the invoices comply with the conditions of the contract like in case the Agreement states an hourly rate then detailed invoices billing is for each hour.
  • Preserving confidentiality
    The involved parties keep all secret information and any other material that the universe already knows from each other. Information about employees, sub-suppliers, and any other outside advisors who contribute to the completion of the work. The concerned parties maintain the confidentially even after termination of the employment and the expiry of the exclusive consulting Agreement.

    Benefits of Exclusive Consulting Agreement

  • Benefits both the parties mentioned in the deal, where the consultant give his services and get paid for the services. For example, if an IT firm seeks the professional services from a consultant to develop the business and the consultant make the services to the client who benefits from his services.
  • Both the client and the consultant can discuss the nature of work, timeline, payment terms, details in the Agreement and other information and conclude on with the contract.
  • Avoids consequences that lead to termination or payment issues.
  • Developing the terms and validation of the contract, which is useful to the parties and is vital to the Agreement.

Here is a sample letter of Agreement for consulting services. You can also download PDF templates and can customize it according to your needs and requirements.

Sample for Exclusive Consulting Agreement

A sample of the agreement can be downloaded from below.

Download Exclusive Consulting Agreement Template

Exclusive Consulting Agreement

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