What is a Consultancy Agreement?

Employment Law

Where an individual is self-employed, a Consultancy Agreement (or Consultant Agreement) will be the contract that will outline the obligations between the Company (“client”) and the Consultant.

Whether you are an individual or a company, we can advise on the contents of a Consultancy Agreement and assist in negotiating terms for you.

What should a consultancy agreement contain?

When looking at a consultancy agreement, you need to ensure that it clarifies:

  1. Who each party is?
  2. What are the services and duties of the Consultant?
  3. Can the Consultant appoint a substitute if they are not able to personally perform the services and/or duties required of them?
  4. What are the payment terms? In a consultancy arrangement, you would typically expect the Consultant’s payment to be required on receipt of their invoice.
  5. Who bears the financial risk? Who is expected to have insurance?
  6. What is the expected workload? How much control does the client have over the workload, the days or hours during which the services and duties are performed, and the final product or service provided?
  7. Who supplies what equipment?
  8. What is the arrangement for termination? In a consultancy arrangement, you would typically expect the agreement to be fixed term and tallied with the length of a particular project, rather than indefinite, but if it is indefinite, you’ll need to check what the notice periods are.
  9. Where should the work be done?
  10. Who owns what IP?
  11. Are there confidentiality obligations?
  12. Who is responsible for personal data? Who is the data processor and what responsibilities does that incur?

One thing that you would not expect to see are restrictions on other activities; this would not tally with the consultant/client relationship and may be viewed as a restraint of trade.

Self-employed status

One critical thing to note is that, although a Consultancy Agreement may expressly outline that an individual is to be regarded as self-employed, in reality, it is not conclusive as to employment status or an individual’s tax status.

A Company should be careful as to how they treat an individual intended to be self-employed, what wording is used in conjunction with their contract, and how they are instructed, dressed, their ability to delegate etc. Otherwise, although a Company has assumed that the relationship is purely contractual, an employment relationship (and the corresponding rights and responsibilities) may have form.

For more information on employment status, and the risks of getting it wrong, read here.

How we can help

If you have been offered a Consultancy Agreement and would like advice on the terms, or if you require a Consultancy Agreement drafting, we can help with this here at Thrive.

Before commencing work on your behalf, we shall do an initial review and then inform you of any additional costs and ensure you fully understand how your legal fees are calculated, in writing, before proceeding with any case

Whilst most firms operate on an hourly rate, we prefer to offer our clients a fixed fee (wherever possible) to assist our clients in managing their legal costs

By Alicia Collinson


Please note this blog is for reference purposes only and is only accurate at the date it was published. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action. Please contact us if you have any questions at   


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