4 Reasons You Need a Consulting Agreement

Independent contractor agreements are a written record of the agreement between a consultant and a client. They provide legal protection, create a sense of professionalism, encourage communication, and ensure an efficient and streamlined process for completing the project.

Contracts can be as long or as short as you need them to be. It will be worth the time to write one that ensures your minimal legal protections are met. Here are four reasons to use a one-page independent contractor agreement for your next project.

1. Contracts are Legally Enforceable

Should a dispute arise between you and your client, a written and signed contract is your most ironclad proof of your agreement. One of the most common objections to written contracts is the belief that verbal agreements are binding.

While verbal contracts are legally recognized, the problem lies in the inherent lack of proof of what was agreed upon. The best way to protect yourself and your business legally is to get things in writing.

2. Contracts Define Your Independent Status

A proper independent contractor agreement will include verbiage that outlines the terms of the project and declares your relationship with your client as that of a consultant or contractor. This could be helpful if you need to prove consultant status for tax or other financial purposes.

This also protects your client. If a company misclassifies an employee as an independent contractor, it can be held liable for fines, penalties, and even class-action lawsuits.

3. Contracts Help with Accountability

Many professional disputes arise not out of malice or dishonesty but out of miscommunication. A well-written contract will clearly spell out the exact terms and details of an independent contractor agreement and give each party the opportunity to discuss or clarify any unclear points.

A contract should clearly outline services to be performed, milestones, a timeline for completion, the duration of the contract, and payment terms and conditions. Remember, it’s important that you fully understand all parts of a contract you sign to protect your business and your reputation. If a part of the contract is unclear, ask for an explanation or consider having a lawyer look it over before signing it.

4. Contracts are a Professional Way to Conduct Business

A contract protects you as an independent consultant and your client as well. Your willingness to bind yourself to a legal independent contractor agreement can often help establish a strong relationship based on your client’s confidence and trust. This may help them overcome any doubts they may have about hiring an independent consultant.

At the end of the day, a contract is a legally binding document that will help protect you and your work. It’s a chance for you and your client to put your expectations for the work engagement into writing and to clearly outline how you will achieve mutual goals. Use this important document as a chance to establish a positive working relationship with your client, define the project scope of work, and agree on duties and responsibilities.