How to create your own consulting contract template

Contracts are must-haves in any consultant-client relationship, and for good reason. They help protect both you and your clients. Whether you run a financial advisory firm or an IT consulting company, you need to create a contract before you start working. A legally sound contract minimizes the risk of disputes by defining the scope of work, clarifying intellectual property (IP) ownership, outlining payment terms, and more. 

You can use a digital contract template in Ignition or build your own—both great options depending on time availability and customization needs. 

Let’s look at how to create a contract that covers all key bases.   

While people use “consulting agreement” and “consulting contract” interchangeably, the two terms are distinct in some business environments. 

A consulting agreement is a broad document that outlines the basic terms of a consultant-client relationship, including the general scope of work, terms of engagement, and payment structure. 

A consulting contract, on the other hand, tends to be more specific, outlining the exact nature of your relationship, deliverables, timelines, IP ownership, and the legal obligations of both you and your client. It’s essentially more formal and legally binding than an agreement. 

The distinction between the two is necessary in certain sectors, such as legal and government contracting, as entities in these fields require detailed and enforceable documents. 

In other areas, however, like IT, marketing, and business management consulting, you may find the terms used interchangeably. 

In Ignition, both agreements and contracts fall under our “Contracts” product feature.

A free downloadable contract template is an appealing option for anyone looking for a fast solution. Templates typically cover key bases, such as the scope of work and associated payments, limiting the risk of missing key details and eliminating the hassle of writing a contract from scratch. 

It’s worth noting, however, that free contract templates require editing or revisions to align with your business’s offerings and industry requirements. For example, if you’re in IT consulting, you may need to add a service level agreement (SLA) clause to the free templates. You may also need to add or eliminate some provisions to comply with the governing laws of the region you operate in.

The other option is to build your contract from scratch. While going the custom route takes more work, it’s also a great option as it ensures your contract includes terms that align with your services, industry, regulatory landscape, and client needs. A proper contract can help you build better relationships with clients.

Developing your own contract is relatively easy when you have a basic outline to work off of (like the one we provide below!). If you don’t want to do it all from scratch, you can start with the contract templates available in Ignition. 

Benefits of using Ignition’s in-app contracts include: 

• Customization: You can tailor your contract and terms to align with your branding and specific business needs using Ignition's rich text editor. You can also customize your terms to reflect changes made during client engagements and use Ignition’s Instant Bill feature to charge for out-of-scope tasks. This saves time and headaches, allowing you to avoid drafting new contracts and asking customers to re-sign them.
• Automated client and service details: Ignition reduces manual entry and potential human errors by automatically populating templates with client and service-specific information.
• Seamless integration: Ignition’s in-app templates are integrated into the platform, facilitating automated workflows from proposal creation to client acceptance and payment processing. This integration minimizes workflow discrepancies and drives efficiency.
• Consistency and compliance: Using the standardized contract templates in Ignition ensures that all your contracts adhere to company policies and your specific industry regulations, minimizing the legal risks associated with inconsistent or outdated contract terms.
• Real-time updates: Ignition makes sure all stakeholders have access to the most up-to-date terms by allowing you to update templates centrally. 

Customizing a contract to your industry specialty is one of the most important considerations when developing a contract agreement, because some industries need unique details outlined in their contracts. For example, a clause on software licensing is necessary in IT consulting—but not so much in strategy consulting. 

Similarly, if you’re in healthcare consulting, you may need to include a liability waiver as well as Health Insurance Portability and Accountability Act (HIPAA) compliance provisions, like how to use and safeguard protected health information (PHI).

In addition to industry-specific clauses, it’s also important to consider your consulting business offerings and clients’ needs. This helps ensure that your contract effectively covers all bases. 

Now to the main reason you’re here: what should you include in a consulting contract template? 

Note: Some of these components may not be necessary for your contract. Use discretion based on your industry and seek legal counsel or consult an industry professional to determine what you need to include. 

This section outlines the purpose of the contract and identifies key details, such as the parties’ names, the agreement’s effective date, and a brief description of the services the consultant will offer. 

Example language: This consulting contract between [Client’s name] (hereinafter "Client") and [Consultant’s name] (hereinafter "Consultant") comes into effect as of (Date of this agreement). 

The Client is engaged in [Field of operation] and wishes to hire the Consultant to help with [Brief description of service] matters. 

This prevents a consultant’s misclassification, potentially saving parties from legal or tax issues. Here, you need to define who you are relative to your client’s company and highlight your obligations. 

Example: The Client engages the Consultant as an independent contractor. This Contract doesn’t create an employer-employee, partner, venture, or other similar relationship between the parties. The Consultant is responsible for taxes, workers’ compensation, and benefits related to their work. 

This section outlines the services expected of you, the deliverables, and the deadline. It can prevent misunderstandings from unstated expectations, allowing for a strong relationship with your client. 

Example: The Consultant shall provide the following services [Service descriptions]. Expectations include [Deliverables] to be completed by [Deadline].

The “Term” section defines the contract’s length and provides the procedures for contract renewal, providing clarity for all parties involved.

Example: This Contract shall start on [Start date] and continue until [End date] unless terminated beforehand. If necessary, it may be extended by prior written consent from both the Client and Consultant. 

This part of the contract establishes your obligations and the client's, which can help foster collaboration and prevent disputes. 

Example: The Consultant shall perform the agreed-upon services professionally and carefully. The Client will support this by disclosing pertinent information, offering guidance, and providing timely feedback and approvals. The Client recognizes that failure to fulfill their responsibilities could impede the Consultant’s services, affecting the agreed-upon deadline. 

This section defines confidential information per the contract, highlights the Consultant’s obligation to protect sensitive information, and details exceptions for disclosing the information. 

Example: The Consultant will have access to sensitive information hereof regarded as “confidential.” The veil of confidentiality covers all of the Client's non-public information, including business plans, trade secrets, revenue projections, and customer information. 

The Consultant will not disclose any of these details unless [Exceptions]. Should they need to disclose confidential information, the Consultant will provide a written notice before revealing it. Failure to do so may result in the Client seeking [Remedy] for damages. 

This section highlights your compensation, including the amount of money you’ll receive, the time the client has to pay you for services rendered, and any penalties for late payments.

Example: The Client agrees to pay the Consultant [Agreed-upon compensation] on [Agreed-upon payment date or schedule] via [Payment method], unless [Acceptable exceptions]. If the Consultant does not receive payment within [X days/weeks] of the due date, the Client will incur a [X%] late fee. 

This provision protects you and your client in case problems arise because of misconduct or negligence from either party. It essentially allocates responsibilities to both of you, protecting you from financial or legal risks resulting from each others’ actions. 

Example: The Consultant shall not be liable for damages resulting from services provided to the Client unless there is proof of willful misconduct or negligence. The Consultant agrees to indemnify the Company from and against damages incurred during service provision, unless [Exceptions]. 

This section highlights the grounds for ending the contract early, specifying the actions that would result in termination as well as the notice period for termination. 

Example: Both the Consultant and Client can terminate this contract if [Circumstances] occur. Either party is expected to provide [X] days' written notice to the other party. 

After termination, the Client will pay the Consultant for all work completed up to the termination date. 

While you can always download free consulting agreement templates online, it’s better to create your own. A custom contract aligns with your brand, offerings, and industry needs, providing clarity and protection for you and your clients. 

Ignition revolutionizes your consultancy's client engagement by merging proposals, contracts, billing, and payments into a unified platform. With customizable templates and automated workflows, you can create effective client intake forms, streamline operations, ensure timely payments, and focus more on delivering exceptional value to your clients.