PeakStrategy

Steps 7-10 in preparing a contract

7. Provisions necessary for the protection of the client:

1. A time schedule for the completion of services by the consultant, or a formula for determining such.
2. A requirement for adequate insurance coverage. The client should be adequately protected either by insurance or by a hold-harmless agreement, or both.
3. A provision preventing the consultant (and the client) from assigning the contract or subcontracting a part of it without the written consent of the other.
4. Although the agreement will normally terminate by provision or implication when the consultant's services are fully performed, the client may be given the right to terminate the agreement if the consultant's performance is unsatisfactory or if the client has no further need of the service provided, or, in some cases, any time at the option of the client. A reasonable arrangement for payment of fees in the event of such termination should be provided for.
5. By implication and by specific contract provision, where called for, a requirement may be stated that only competent personnel may perform or continue to perform work for the client. It is not unknown for the client to request the assignment of a specific person or persons to perform the services, with identification of same in the contract. The consultant should note that such a contractual clause will limit the consultant's flexibility. Avoidance of such a clause may be in the consultant's interest.
6. Other provisions include requirements that the consultant obtain any approvals required by government agencies, that the consultant maintain adequate records, that the consultant make periodic reports to the client, and that any fee paid for a preliminary report to the client may be applied to the total fee involved for a completed project.
   

8. The agreement should contain provisions protecting the position of the consultant.

1. Adequate compensation should be provided for in the event the consultant is required to do extra work because of a change in the scope of his assignment or because of a delay caused by the client.
2. In many situations, a provision clearly setting for the services not to be provided by the consultant should be included, especially where the agreement is not standard to the industry.
3. A provision may be included that the consultant may employ persons to assist him in the performance of these duties under the agreement.
4. A provision may be included which relieves the consultant of liability where he is unable to perform, or his performance is delayed, due to circumstances beyond his control, including those caused by the client.
5. The consultant's performance may be conditioned on receipt of certain information, approvals, and reports from the client on a schedule basis. To the maximum extent possible, the receipt of information, approvals, and reports by the consultant as well as any specifications regarding their quality, form, or contents should be spelled out.

9. The agreement should be executed by both parties by means of signatures of persons properly authorized to make binding agreements.

1. In regard to corporations, it may be necessary to determine that an officer has been authorized to make such agreements by a resolution of the board of directors, sometimes with a requirement that the signature be attested to.
2. In regard to government agencies, statutes and regulations may specify the method and proper person to execute the agreement. Care should be exercised in determining the proper appropriations have been made to compensate the consultant.
3. Where the authority of the person signing the agreement is not clear, a certification of the governing body of the organization involved authorizing the person to sign and approve the transaction may be required.

10. The contract should contain provisions for amendment.

In the event of changed circumstances, or if the parties desire to change their agreement, a written amendment of the contract may be in order. If the changes desired are very extensive, it is often preferable to completely rewrite the contract as a new document.