Consulting Agreement Checklist: What to Review Before Signing

Essential Items to Review in a Consulting Agreement

Before signing a consulting agreement — whether you are the consultant or the client — review these key areas carefully.

Scope of Work

• Is the scope clearly defined with specific deliverables?
• Are milestones and deadlines realistic and measurable?
• Is the process for handling scope changes or additional work specified?
• Does the scope match what was discussed, without extra obligations?

Compensation and Payment

• Are rates (hourly, project-based, or retainer) clearly stated?
• Is the payment schedule defined (net 30, upon delivery, monthly)?
• Are expenses covered, and is approval required before incurring them?
• Are late payment penalties or interest specified?
• Is invoicing procedure defined?

Intellectual Property

• Who owns the work product — the consultant or the client?
• Are pre-existing materials (consultant's prior work) excluded from the IP transfer?
• Does the consultant retain the right to use general knowledge and skills gained?
• Is there a license-back provision if the client owns the IP?

Confidentiality

• Is "confidential information" clearly defined?
• Are the obligations mutual or one-sided?
• Is the confidentiality period reasonable?
• Are standard carve-outs included (publicly available info, prior knowledge, legal requirements)?

Termination

• Can either party terminate for convenience, and with how much notice?
• What happens to work-in-progress upon termination?
• Is the consultant paid for work completed through the termination date?
• Which obligations survive termination (confidentiality, IP, indemnification)?

Non-Compete and Non-Solicitation

• Is there a non-compete clause, and is the scope reasonable?
• Does a non-solicitation clause restrict your client relationships?
• Are the time and geographic restrictions proportional?

Liability and Indemnification

• Is there a cap on liability?
• Are indemnification obligations mutual and reasonable?
• Is there an exclusion for consequential damages?

When to Consult a Lawyer

If the agreement contains broad IP assignments, restrictive non-competes, or one-sided indemnification, consider having an attorney review it before signing.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.