Consulting Agreement in India
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Overview of Consulting Agreement
A Consulting Agreement is a contract established between an individual or organization seeking consultancy services and the person or firm providing such services. This agreement outlines all relevant details concerning the nature of consultancy offered and the manner in which these services will be executed. Consultancy services may cover various fields such as environmental issues, governance, strategic planning, financial management, marketing strategies, and more. Under this contract, the consultant is obligated to offer their expert advice on the subject matter in exchange for a fee. This arrangement enables clients to benefit from expert insights that help grow their business and improve profitability.
Need for a Consulting Agreement
Consulting agreements are utilized whenever expert advice is required for new initiatives or to enhance existing operations within an organization. Common scenarios that necessitate consultancy include: • When the organization undertakes tasks outside their usual expertise. • Instead of hiring permanent employees for unfamiliar tasks, organizations often prefer engaging specialized consultants temporarily. • Consultants or consultancy agencies should possess focused expertise to assist with short-term projects. • This approach allows organizations to work on various projects flexibly while reducing long-term costs by avoiding permanent hires. To safeguard the interests of both parties, forming a consulting agreement is recommended. This written contract ensures all terms and conditions are clearly communicated and provides remedies in case of breaches.
Benefits of a Consulting Agreement
• Protects the rights and obligations of both parties • Serves as legal evidence of the agreement • Ensures confidentiality of sensitive business information • Clearly defines the consultant’s responsibilities during the contract • Enables enforceability in case of disputes or breach • Helps avoid misunderstandings by clearly setting terms
1. Documents Required for Drafting a Consulting Agreement
• Personal details of both parties (names, addresses, contact info)
• Scope and nature of the consultancy work
• Duration and timeline of the agreement
• Fee and payment schedule
• Confidentiality clauses and non-compete terms (if applicable)
• Signatures of both parties
• Dispute resolution method (optional but recommended)
Key Clauses in a Consulting Agreement
A well-drafted consulting agreement typically includes the following clauses:
• Identification of parties
• Scope of work / services
• Timeline or timeframe
• Rights and obligations
• Ownership or proprietary rights
• Fees, expenses, and payment schedule
• Communication methods
• Governance model
• Guidelines for escalation
• Confidentiality
• Non-compete
• Enforceability
• Liability and limitation of liability
• Indemnification
• Dispute resolution
• Termination or cancellation
• Signatures and date
Step-Wise Process to Draft a Consulting Agreement
• Identify the scope of consultancy required
• Discuss and mutually decide the commercial terms
• Draft agreement including all essential clauses
• Review and finalize terms with legal assistance
• Sign and retain copies for enforcement
Why Choose Us?
DoStartup provides expert legal support for consulting agreements.
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