The Basics of a Consulting Contract
December 10, 2015
Like other agreements, consulting contracts are composed of numerous provisions, all of which should be respected.
Rejection of even one clause of a consulting agreement could result in a lawsuit. For example, Lee Gabler, a former co-chairman of CAA, is suing “The Late Show With David Letterman” producer Worldwide Pants, according to The Hollywood Reporter. He alleged that the company did not pay him for the full term of the contract. Gabler claims that the agreement stated he would be paid for 30 days after the final day of production on the show, in May. However, in April, he alleged that the company stopped paying him. Each of the numerous provisions of an entertainment consulting agreement should be followed to avoid a suit such as the one Gabler has filed.
The basic points in a consulting contract
Here is a breakdown of what the typical consulting contract consists of:
- Engagement term – This is the portion of the consulting agreement Gabler claims was violated – Worldwide Pants ceased to pay him before his term was up. This clause should note both the commencement date and final day of engagement.
- Compensation – Here is where the pay is outlined. Monthly amounts, as well as an expected total for the term, may be included in this provision of the contract. Which party is paying whom, how the installments should be split and any other important details relevant to compensation should be included.
- Expected services – What should consultation actually look like under the terms of the agreement? Here’s where the services both parties expect are outlined. What portions of the project or business should the consultant work with, how influential is his or her opinion over final decisions and other expectations can be included in this provision.
- Representation and warranties – This clause, essentially, is an explanation of what not to do. It should highlight the consultant’s agreement to work with the other signatory and that entity only in a consulting capacity. It should also warrant against any broken laws, damages, breaches of contract or other, similar circumstances each party would wish to avoid.
- Independent contractor or employee – It is important to define the consultant’s relation to the company – is he or she a contractor or an employee? The distinction has legal and human resource implications, and it is crucial the specific status is defined.
- Confidentiality provisions – Many organizations work with information that should stay private, and often consultants will also handle this same classified material. To avoid the consultant telling people about that secret information, most agreements will contain myriad clauses on confidentiality.
Numerous other provisions may be included, such as general contractual obligations and state-based requirements. The above clauses, though, are very important for any consulting contract in entertainment law. If you intend to sign a consulting contract and want to learn more about what should be included in the agreement, speak with an experienced entertainment law attorney for more information.