Consulting Engagement Letter Template

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A consulting engagement letter is an agreement between a consultant and their client that defines the terms of their professional relationship. It outlines the fundamental aspects of the consultant’s work, including their responsibilities, compensation terms, and contract length. While less comprehensive than a standard contract, an engagement letter is still legally binding.

Consulting Engagement Letter Template

A consulting engagement letter is an agreement between a consultant and their client that defines the terms of their professional relationship. It outlines the fundamental aspects of the consultant’s work, including their responsibilities, compensation terms, and contract length. While less comprehensive than a standard contract, an engagement letter is still legally binding.

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Last updated November 21st, 2024

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A consulting engagement letter is an agreement between a consultant and their client that defines the terms of their professional relationship. It outlines the fundamental aspects of the consultant’s work, including their responsibilities, compensation terms, and contract length. While less comprehensive than a standard contract, an engagement letter is still legally binding.

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When to Use an Engagement Letter

Engagement letters are written when a consultant takes on a new assignment before providing services to the client.

Consultants will ask clients to review the letter’s contents to ensure they fully understand what services they’re receiving, how much they need to pay, and when services will be performed.

Note: An engagement letter is a condensed contract containing fewer legal terms than typical service agreements. Consultants sometimes use engagement letters when clients are unwilling or hesitant to sign a long, complicated contract.

What to Include

A letter of intent will generally include the following:

  • The names and addresses of the two parties.
  • A description of the services the consultant will perform.
  • The consulting fee, commission percentages (if any), and other payment terms.
  • The start and end dates of the contract.
  • Any service expenses that the consultant is responsible for.
  • The protocol for early contract termination.
  • The signatures of each party and the date of execution.

Importance of an Engagement Letter

An engagement letter is an important document that helps structure the client-consultant relationship. It builds trust between the parties and can prevent disagreements down the line.

Other benefits of an engagement letter include:

  • No guesswork – The written contract provides clarity, ensuring that both parties are aware of their respective obligations.
  • Written evidence – An engagement letter offers a precise, concrete record of the agreement that may be consulted later if necessary.
  • Legal recourse – The letter outlines the agreed-upon price arrangement, making it easier for the consultant to pursue damages or other legal remedies if the client defaults on payment.
  • Understandable terms – Engagement letters usually have complex legal provisions. Therefore, clients are more likely to understand and sign off on the agreement terms.

Sample

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CONSULTING ENGAGEMENT LETTER

This Engagement Letter (the “Letter”) is by and between [CONSULTANT’S NAME], hereafter referred to as the “Consultant,” and [CLIENT’S NAME], hereafter referred to as the “Client.”

1. SERVICES. The Consultant agrees to provide the following services to the Client: [CONSULTANT’S SERVICES]. (“Services”).

2. COMPENSATION. In consideration for the Services to be provided, the Client agrees to pay the Consultant $[AMOUNT] per hour.

3. TERM. The Services shall commence on [MM/DD/YYYY] and end upon completion of the Services performed.

4. COMPENSATION. In consideration for the Services provided, the Consultant is to be paid $[TOTAL AMOUNT] for the completion of the Services.

5. EXPENSES. The Client shall only be responsible for the following expenses: [LIST EXPENSES TO BE PAID BY CLIENT].

6. INDEPENDENT CONTRACTOR STATUS. The Consultant is an independent contractor, and neither the Consultant nor their employees or contract personnel are or shall be deemed the Client’s employees.

7. TERMINATION. Either party may terminate this Contract upon [#] days’ written notice.

IN WITNESS WHEREOF, the parties have executed this Agreement on [MM/DD/YYYY].

Consultant’s Signature: ____________________
[CONSULTANT PRINTED NAME]

Client’s Signature: ____________________
[CLIENT PRINTED NAME]