For many IT and software consultants, the ability to work independently and help diverse companies with their software and IT needs is the reason they get out of bed in the morning. However, consultants are also earning an income. And if their consultancy business is to survive and thrive, it needs a Client Agreement. Client agreements are contracts that outline to prospective clients the terms and conditions under which a consultant works. This article discusses what IT and Software consultants should include in their client agreements.

Description of IT Services

Your client agreements must explain to prospective clients the work that you will do for them as a consultant. For example, if your services involve configuring a large application for them. Be sure to tell them what your services do not include. It is important that the client agreement is as detailed as possible on this point and that the clause is clear and accessible. Detail any and all critical tasks or milestones and provide a schedule of when you anticipate meeting them. If you provide a client with written materials and reports, include a list of them and date when the customer can expect to receive them.

This clause is necessary because the majority of legal disputes about client agreements concern the overall scope of the contract in question. A party to the agreement perceives that they did not receive all the service promised to them. If you describe your services in detail, you reduce the likelihood of this happening to you. Including critical tasks and timelines for achieving them can also assist the client to measure and chart the progress of the overall project.

Intellectual Property

Your agreement will need to consider the question of who owns any intellectual property created in the course of your work for a client. Typically, clients own any and all intellectual property rights. For example, a software consultant would assign the intellectual property in any software they create to their client, including any designs, inventions or other materials.

Also, consider the question of the kind of help you will give to ensure that the client can legally secure and protect this property. If you intend to waive the moral rights to your work, include that in the agreement.

Confidentiality

Your contract must let a prospective client know that you will maintain the confidentiality of all company information to which you have access in the course of your work for them.  Further, you need to explain that you will only use such information for your work for them.  Clients may be less inclined to hire a consultant if their client agreement does not guarantee them the privacy of their information and records.

Liability

As a consultant, you need to be aware that your clients will want you to assume as much liability as possible. Conversely, in the interests of your commercial security, you need to limit your liability as much as you can under any existing laws.

To resolve this conflict, client agreements should set out what liability you will assume and precisely how you are limiting it. Of course, you must assume all liability that the law requires of you. Nonetheless, you need to be sure that if a client utilises your work for them (for example, the software you create for them) in such a way as to incur damages, you do not accept liability for that.

Payment

Your agreement must specify how much a client will need to pay you for your services. Be sure to include the total amount payable. Of course, it is also a good idea to break down that figure to show the client how you will earn your fee. Detail can assist them to understand how you work. It also demonstrates that you are aware of your client’s right to value for money.

Also, specify any and all terms of payment. For example, if you require part payment within sixty days of the achievement of a critical task. Alternatively, specify if you would like to receive a fixed sum every month.

Conflict of Interest

Be sure to include in your agreement a clause concerning conflict of interests. That is, let them know that when the agreement is executed and for its entire duration, you will not undertake any other consulting work that will constitute a conflict of interest.

Termination

Your agreement needs to be clear about those circumstances when either party to it can formally terminate it. Be sure to detail any information regarding payment of fees if that happens. For example, the agreement could specify that if the client terminates the agreement, you require payment for all services rendered to that date.

Expenses

Your agreement should also specify that the client pays all relevant and necessary expenses incurred in the course of your work. Set out the procedure through which you will provide them with information about each cost incurred. In that way, the client knows that you have a mechanism for accountability.

Dispute Resolution and Mediation

Your agreement should also contain a clause requiring parties first to undertake dispute resolution and mediation in the event of a dispute. Dispute resolution at the outset is more cost-effective, can prevent costly legal action and may preserve a measure of goodwill between parties.

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LegalVision has helped many businesses with tailored online legal advice. Our lawyers can assist with drafting Client Agreements. Call LegalVision today on 1300 544 755.

Carole Hemingway

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