Consultancy Agreement Template for the US: Clauses and Law That Apply (2026)

What is a US consultancy agreement, and when do you need one? A US consultancy agreement is a contract between a company (the client) and an independent consultant who provides expert advice or services for a fee. It is close to a service agreement but is written for an individual or small firm acting as an independent contractor, usually paid on a 1099 basis rather than as an employee. The agreement sets the scope, the fee, who owns the work, and the rules on confidentiality and competition. Its single most important job in the US is to support the consultant's status as an independent contractor rather than an employee. This article is general guidance, not legal advice. Worker classification and contract law are state-specific and change, so have a qualified professional review an agreement before you rely on it. Last verified October 2026. ## US consultancy agreement template Copy the block below and fill the bracketed fields. ```

CONSULTANCY AGREEMENT This Consultancy Agreement ("Agreement") is made on [DATE] BETWEEN: [CLIENT NAME], a [STATE] [entity type] ("Client") AND [CONSULTANT NAME], of [address] ("Consultant") 1. SERVICES The Consultant will provide the consulting services described in Exhibit A. The Consultant controls the manner and means of performing the services and will use its own methods, tools, and schedule. 2. INDEPENDENT CONTRACTOR STATUS The Consultant is an independent contractor, not an employee, partner, or agent. The Consultant pays its own taxes, provides its own equipment, is free to work for others, and receives no employee benefits. The Client will issue a Form 1099 as required. 3. FEE AND PAYMENT The Client will pay [a fee of [AMOUNT] / [RATE] per [hour/day]], invoiced [schedule] and due within [N] days. [Expenses reimbursed with approval.] 4. TERM AND TERMINATION This Agreement runs from [START] and either party may end it on [N] days written notice, or immediately for material breach. Fees earned to the end date remain payable. 5. INTELLECTUAL PROPERTY Deliverables created for the Client under this Agreement belong to the Client on full payment, and the Consultant assigns those rights. The Consultant keeps its pre-existing and general know-how and grants the Client a licence to use it within the deliverables. 6. CONFIDENTIALITY The Consultant will keep the Client's confidential information secret during and after the engagement and use it only for the engagement. 7. NON-SOLICITATION For [N] months after the engagement, the Consultant will not solicit the Client's employees or customers it worked with, to the extent the governing state allows. 8. WARRANTIES The Consultant will perform in a professional and workmanlike manner and has the right to enter this Agreement. 9. LIMITATION OF LIABILITY To the extent the law allows, neither party is liable for indirect loss, and the Consultant's total liability is capped at [the fees paid]. 10. GOVERNING LAW This Agreement is governed by the laws of the State of [STATE]. Signed - Client: __________ Consultant: __________ Name / title / date Name / date

- **Independent contractor status (clause 2).** This clause does the heavy lifting. State that the consultant pays its own taxes, uses its own tools, may work for others, and gets no benefits, and note the 1099. The facts still have to match the words.
- **Fee and payment (clause 3).** A project fee or a day or hourly rate both work; set the invoice cycle and payment window, and treat expenses clearly.
- **Intellectual property (clause 5).** Assign the deliverables to the client on payment, while letting the consultant keep its general know-how and pre-existing material, which it licenses rather than hands over.
- **Non-solicitation (clause 7).** A reasonable non-solicit is more widely enforceable than a non-compete, but its limits still depend on state law. ## Common mistakes to avoid - Directing the consultant's hours and methods like an employee, which undercuts the contractor status the contract claims.
- No IP assignment, so the client may not own what it paid for.
- A non-compete rather than a narrow non-solicit, which many states will not enforce against a contractor.
- No defined scope, leading to scope creep and fee disputes.
- Forgetting the 1099 and tax responsibilities. ## A note on jurisdiction and current law - **Classification is the core risk.** Whether a consultant is an independent contractor or an employee is decided by the facts of the relationship, not just the contract. The IRS applies a common-law control test. Some states, notably California under AB5, apply a stricter "ABC test" that makes contractor status harder to claim. Misclassification can bring back taxes, penalties, and benefits and wage claims. <!-- [VERIFY: current scope of California AB5 exemptions and other state ABC-test rules as of October 2026] -->
- **Restrictive covenants.** Non-solicitation terms are more widely enforced than non-competes, and non-compete enforceability against contractors varies by state. California broadly bans non-competes. See the US employment page for the current federal position.
- **Contract law is state law.** Liability caps, interest on late payment, and similar terms are read under the governing state's law. ## Where a contract workspace helps A template gets you a sound consultancy agreement. The ongoing work is keeping each engagement's scope and classification clean, checking IP and non-solicit terms before signing, and tracking end dates across many consultants. All of that, drafting from a template tuned to how your company engages consultants, flagging scope and classification risks, checking IP and non-solicit terms under the governing state's law, and keeping end dates in view, can sit in one AI workspace rather than scattered across tools, and [Adira](https://adiralaw.com) is one such tool. This template alone is enough to put a fair agreement in place; one place for drafting, review and tracking just saves you stitching the steps together.