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F E A T U R E

IT, Dotted and Crossed: Contracting with Consultants

July 22, 2002
By Sean Doherty

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Removing the Devil from the Details

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	Removing the Devil from the Details
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In the terms and conditions clause, you're likely to encounter the term "best efforts"--as in "the consultant will use its best efforts to perform the services required." This phrase means you require the highest quality or the greatest usefulness for the effort's intended purpose. But don't let legalese be the devil in the details. Instead of leaving "best efforts" undefined, link your deliverables to the work's specifications, which should be measurable. You will need to test the deliverables and evaluate the results to make sure they are acceptable. Acceptance triggers payments and warranties.

To be sure that consultants give you their best efforts, you'll need to develop rigorous acceptance tests and detail them in the agreement's terms and conditions section. You can hire an independent organization to test the consultant's work, rely on your internal IT department or leave it to the consultant. Where possible, use your own data. When application response time is critical, the agreement should detail the acceptable range of performance.

Ownership of the deliverables is paramount in negotiating the agreement. For many tangible objects, payment implies ownership. But this is not true for consulting services. The parties must agree in writing that the client, not the consultant, will own the product. The consultant must irrevocably assign all copyright, patent and other proprietary rights to the client.

Changes and Terminations

A good contract will include a procedure to handle change in the relationship. Clients should advise consultants of such changes in writing, specifying as much as possible the scope of the new work. The procedure should include the costs for preparing new estimates and assess the changes' impact on factors such as total cost of services and time for completion.

Planning for the end of the relationship is equally important. Sometimes the project just ends, but other times the results are unacceptable and the consultant fails to provide a solution. Since consultants are independent contractors, not employees, termination needs to be defined in the agreement. The contract should not only limit the relationship to a fixed term but also provide grounds for termination should the relationship deteriorate.

Finally, make sure to include an integration clause that demarks the outer limits of the agreement. This standard section states that all terms and conditions are included in the contract and can't be changed unless both parties agree in writing. If something is important to the relationship, include it. You can add the original proposal from the consultant as well as marketing brochures and cost estimates.

For a sample contract, with instructions for completion, see here.

Sean Doherty is a technology editor and lawyer based at our Syracuse University Real-World Labs®. A former project manager and IT engineer at Syracuse University, he helped develop centrally supported applications and storage systems. Send your comments on this article to him at sdoherty@nwc.com.