PeakStrategy

1. A formal written contract executed by both parties.
2. A letter of agreement or a purchase order type of agreement prepared by one party and accepted by the other party, setting forth the essential elements of the contract.
3. A verbal agreement for the services to be rendered with most of the promises and conditions implied.

NOTE: Government agencies in situations involving major engagements commonly require formal written contracts. Letter agreements and purchase order types of contracts can often be safely used where the amounts involved are smaller or the practice of the client is to use such. Many consultants, like lawyers, verbally agree to provide a particular service for compensation commonly based on the per-hour or per-day rate charged by the consultant. An estimate is often made as to the total cost of providing the service involved, but this is subject to change depending upon the length of time necessary to perform the promised services.

1. The names and addresses and types of business entities should be included to identify clearly the parties to the consulting contract.
2. After identifying the parties, reference can be made in the remainder of the form to "client" and "consultant". "Engineers," "insurance analysts," or some other term may also describe the consultant.

3. State the underlying background

It is common practice to state the underlying background for the agreement or the assumptions on which it is based in a "preamble" or "recitals" section. This section is typically the first section of the contract following the designation of the contracting parties.

1. Where any preliminary report or agreement has been made, take care to identify it clearly in the recitals.
2. The recitals section may also set forth the authority of the person executing the agreement to legally bind his principal.