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A person may require consultancy services for gaining assistance on subjects where it lacks expertise, therefore they hire consultants to gain knowledge and assistance on the same.
A consultancy agreement stipulates the scope of work along with the rights and obligations of the parties for the execution of the same. A consultancy agreement is entered into on a principal-to-principal basis, i.e. neither Party shall be entitled to act on each other’s behalf or bound by the acts of the other party.
1. What is the importance of a consultancy agreement?
A consultancy agreement is executed between the parties to define the terms of service, rights and obligation of the Consultant during the term of this Agreement and post-termination. Further, this Agreement is executed to ensure that any information shared between the parties remains confidential and the intellectual property is protected.
2. What all should a consultancy agreement incorporate?
A consultancy agreement should incorporate the following:
- Scope of work
- Payment structure
- Confidentiality of information and Intellectual Property Rights
- Non-solicitation and Non-compete Obligations
- The relation between the parties