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consulting agreement

Consulting Agreements: Who Owns Intellectual Property Created On A Project?

By Business Lawyer
business consulting agreement

Many consulting agreements don’t cover who owns the intellectual property (IP) created by a consultant while working on a client’s project. And that can lead to misunderstanding, soured relationships, and even costly lawsuits over ownership.

Now experienced business consultants often create proprietary resources they can reuse on multiple projects for different clients over time.

On the other hand, most clients don’t give IP ownership a thought, mistakenly presuming payment to the consultant purchases that intellectual property. Few think about that same material being used later by the consultant on behalf of others, including competitors.

Of course, if you’re a business consultant, you’ll want your consulting contracts to clearly protect what you own. And, under some circumstances, grant a client a limited license to use this intellectual property while you retain ownership.

What if a client insists on owning what you create? If the IP isn’t essential to your consulting business, you may want to consider charging a premium (e.g. 3x to 5x your standard rate) for ownership to change hands.

Even then, you should consider retaining in your consulting agreement a license back to you of the intellectual property from the client so that you have some rights to reuse what you’ve created even after the client owns it.

If you need help fixing your existing consulting services agreement, or want a professionally prepared contract designed to protect your interests, it’s time to call Business Lawyer Mike Young.

How To Avoid One Of The Biggest Consulting Agreement Mistakes

By Business Contracts, Business Lawyer

consulting agreement mistakesWhen putting together a consulting agreement for your services, it’s common to focus on scope of work, milestones, payments, and other important issues that are essential to having a good working relationship with your client.

Intellectual Property

However, consultants frequently forget to address intellectual property (IP) ownership. And this can be a disaster.

Here’s why…

Most clients will assume that because they pay for your services, they own any intellectual property created by you when performing your services.

On the other hand, as part of systemizing your business, you’ll want to retain ownership of essential intellectual property so that you can recycle it on projects for other clients. After all, it’s inefficient to reinvent the wheel every time you consult for a new client.

So, what’s the solution?

The answer to that question depends upon a few factors.

Essential IP

If the intellectual property is vital to you providing services to other clients, then you’ll want to retain ownership of it and grant a limited license to the client to use it. The scope of that license will depend upon what you’re comfortable with. For example, will the license be transferable if the client’s business is acquired by a third party?

Non-Essential IP

What if the IP isn’t essential to you rendering services to other clients but you want to keep it anyway because it makes your work easier? You can insist upon ownership or craft a consulting agreement that transfers ownership to the client but also grants you a broad license to use the intellectual property in the future.

Now if you’re going to relinquish ownership of important IP, it’s common to charge a premium to the client for that. For example, it’s not unusual to charge 3x what a license would cost the client instead of ownership.

Hybrid Option

Of course, in a few cases, it makes sense for each party to own some of the intellectual property created as part of the consulting while licensing rights to each other.

Help Preparing a Consulting Agreement

An experienced business contracts lawyer can craft a consulting agreement template that’s right for you to use with your clients, including options for ownership and licensing intellectual property. If you need help with a consulting agreement, it’s probably time to set up a phone consultation with Business Attorney Mike Young.

Does Your Consulting Agreement Fully Protect You?

By Business Contracts, Business Lawyer
consulting contract for business consultants

When you’re advising business clients, are you fully protected by a professional written consulting agreement?

Because many consultants live dangerously by cutting corners.

And they risk not getting paid or even being sued by clients because their consulting contracts are defective.

Unfortunately, it’s common for a new consultant to “borrow” someone else’s agreement found online…or try to patch something together from multiple business contracts.

What’s “borrowed” is frequently copyright infringement. Not a good way to start off any legitimate venture.

And the contract’s language probably doesn’t fit the consultant’s particular needs.

Even worse, some of the provisions are written to favor the other side.

If you’re using a contract that wasn’t prepared specifically to protect your consulting business, it’s time to get one that meets your needs.

Of course, some consultants simply work off of acceptance of a written quote…a simple document that doesn’t address many essential issues.

And a simple quote may work…until it doesn’t, i.e. a problem comes up during consulting but the quote doesn’t address how things will be handled.

Now the easiest way to prevent problems with a client is at the beginning of the relationship by establishing the rights and responsibilities of each party in a binding written contract that’s signed.

So if (when) things go bad with a particularl consulting gig, you’ve already agreed on how to sort things out.

If you need a consulting agreement revised or a a new professional consulting contract prepared, it’s time to schedule a phone consultation with Business Lawyer Mike Young to discuss your needs.

Asset Purchase Agreement: 7 Supplemental Documents When Buying A Business

By Business Contracts, Business Lawyer

Asset Purchase Agreement: 7 Supplemental Documents When Buying A BusinessAlthough an asset purchase agreement plays a vital role when buying a business’ assets, there are other important legal documents used in the transaction to ensure that you get what you want from the deal whether you’re the buyer or the seller.

Common Documents For Buying A Business’ Assets

Here are 7 documents an experienced business contracts attorney will frequently use to protect clients for business asset acquisitions.

1. Letter of Intent (LOI) – The LOI is a broad overview or outline of the proposed transaction. If there’s agreement on the LOI’s terms and conditions, an asset purchase agreement will flesh out the details after due diligence is performed.

2. Bill of Sale – A bill of sale is commonly used for transfer of business assets that aren’t real estate.

3. Intellectual Property (IP) Assignments – This type of legal document is used to assign ownership of patents, trademarks, and copyrights from seller to buyer. In some instances, a license may be used instead where the seller retains IP ownership. Or, the seller as an IP licensee may transfer its license to the buyer.

4. Memorandum of Asset Purchase – A memo is a great way to identify that an asset purchase has occurred without going into detail. The memo can be used with third parties while maintaining confidentiality for important terms and conditions (e.g. price) found within the asset purchase agreement.

Related Article: Asset Purchase vs Stock Purchase – How To Buy A Company

5. Escrow Agreement – This agreement covers escrow services that protect both parties to the transaction, reducing the risk buyer won’t receive the assets or that seller gets stiffed on payment when transferring the assets. For the sale of Internet businesses, is a popular escrow service.

6. Business Broker Agreement – Although it’s more common for the seller to have a business broker (who lists and promotes the sale of the company), you’ll also find brokers who represent a buyer in these transactions. Regardless of which party is being represented, the broker’s agreement will describe the terms of representation, including when and how the broker gets paid when the business is sold (either as an asset or equity transaction).

7. Seller Consulting or Employment Agreement – Frequently, the seller will stay on for a period of time after closing occurs. If it’s an active role for more than a month, the seller will often sign a contract that describes the seller’s post-closing rights and responsibilities either as an employee or independent contractor consultant for the business.

Related Article: Sell An Internet Business – 5 Expensive Mistakes to Avoid

Of course, there are other legal documents that are used when business assets are purchased because each deal has unique characteristics. For example, if there’s seller financing, there may be a promissory note reflecting the buyer’s debt and the payments to be made.

Where to get an asset purchase agreement and related legal documents

Whether you’re buying a company’s equity or its assets, Business Lawyer Mike Young may be able to help you get the deal done right.

Salesforce Consulting Contract: What To Include In Your Services Agreement

By Business Contracts, Business Lawyer

Salesforce Consulting Contract: What To Include In Your Services AgreementWhen you’re a Salesforce® Customer Relationship Management (CRM) Consultant working as an independent contractor, it’s important to protect your legal rights with a professional written Salesforce consulting contract.

Popular Salesforce Consulting Services

Common Salesforce consultant responsibilities include one or more of the following tracks:

  • Administrator
  • Platform App Builder
  • Architect (App, System, Technical, etc.)
  • Consultant (Cloud, Marketing, Pardot, etc.)
  • Developer (Commerce Cloud, Platform, etc.)
  • Specialist (CPQ, Marketing Cloud Email and Social, Pardot, etc.)

Experienced consultants typically are certified for the type of work they do for clients. Note that it’s common for consulting to cover more than one of these areas in a single contract.

Is There A Standard Salesforce Consultant Agreement?

No. Although an experienced business contracts lawyer who understands technology can prepare a template agreement that meets your needs based on the services you provide, you will want to customize your contracts with each client to reflect your responsibilities.

Master Services Agreement Versus Per-Project Contract?

Multiple Salesforce Consulting Projects For Same Client

If you’re going to provide Salesforce consulting on an ongoing basis for a client that covers multiple projects (e.g. a one-year consulting gig), it may make sense to set up your consulting contract with a Master Services Agreement (MSA) that contains key terms and conditions that apply to all projects you’ll do. Written work orders and change orders can be used to customize terms for each project done under the MSA.

Single Project Consulting

If you’re only doing one project for the client (e.g. simple app development), an MSA isn’t needed. Instead, you’ll want a written Salesforce consulting contract that covers all of the important terms and conditions for that specific project. If there’s a good fit, at some point the client may want to have a longer term relationship that covers Salesforce consulting on multiple projects over a longer period of time. That’s when an MSA is something you’ll want to consider.

7 Important Issues To Cover In Each Salesforce Consulting Services Contract

Although there will be additional terms and conditions in a professional Salesforce consulting contract (confidentiality, dispute resolution, etc.), here are seven essential issues to address in your agreements whether they’re set up on a per-project basis or as an MSA with project work orders and change orders.

1. Parties. This includes the names of your consulting business and the client’s name.

2. Scope of Work (SOW). Your consulting agreement should be limited by a detailed SOW that both describes the work you’ll be doing and specifically excludes work that is beyond the scope of your agreement. For example, if the client wants you to do only app development, you should specifically exclude doing other Salesforce work (e.g. technical architect) to avoid misunderstandings as to what the client is actually paying you to do.

3. Compensation. What will you be paid, when will you get paid, and what’s the method of payment?

4. Independent Contractor Status. You’ll want to make it clear that you’re an independent consultant instead of the client’s employee.

5. Contract Beginning And End Dates. When will the consulting commence and when will it terminate? If there’s an MSA in place, can it be renewed for additional terms? If so, when and how does renewal take place?

6. Warranties. What type of warranties are you giving the client for your work and what warranties are you specifically excluding?

7. Intellectual Property (IP) Ownership. If you’re creating intellectual property (e.g. an app), you’ll want to make it clear who owns the IP. In some cases, this means retaining ownership but licensing it to the client (via a written software license). In other instances, you won’t be able to transfer ownership or license IP to the client because you don’t own the IP rights to begin with (e.g. the work is done using open source code or IP licensed from a third party).

How To Get A Salesforce Consulting Contract Prepared For Your Business

Whether you have an existing contract that needs to be revised or need a new one prepared, Business Contracts Lawyer Mike Young has experience with Salesforce consulting services agreements. To get started, set up a phone consultation with him today using our firm’s online booking system.


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