- Commercial Contract Drafting, Review & Negotiation
- Master Service & Service Agreements
- Vendor, Supplier & Procurement Agreements
- Consultancy & Independent Contractor Agreements
- Agency, Distribution & Franchise Agreements
- Non-Disclosure & Confidentiality Agreements
- MoUs, Term Sheets & Letters of Intent
- Corporate Structuring & Governance
- Shareholders' Agreements
- Share Purchase Agreements
- Share Subscription & Investment Agreements
- Joint Venture & Strategic Collaboration Agreements
- Partnership & LLP Agreements
- Founders' Agreements
Consultancy & Independent Contractor Agreements
A consultancy or independent contractor agreement engages a person or firm to provide services without making them an employee. It sets the scope, the fee, who owns the work, confidentiality and how the engagement ends, and it should reflect a relationship that is independent in practice as well as on paper.
Whether someone is a contractor or an employee is decided by how the relationship actually works: who controls the work, whose tools are used and whether the person is part of the organisation. A contractor who is in substance an employee can claim employee benefits whatever the document says.
When you need it
When engaging freelancers or consultants
Designers, developers, writers, advisers and part-time specialists are usually engaged this way.
When the work produces intellectual property
Without a written assignment, the consultant owns the code, designs or content they create.
When a consultant will see confidential information
Customer lists, pricing, source code and plans need protection before access is given.
When working as a consultant yourself
A consultant needs clear terms on scope, payment, liability and the right to work for others.
When long-term contractors look like employees
Full-time, exclusive, supervised contractors create a risk of claims for employee benefits.
How the process works
Four stages. Timings are typical, not promised.
- 1
Understand the engagement
A call or emailEstablish what the consultant will do, for how long, how they will be paid, how much direction they will be under and what they will have access to.
Documents
- The proposal or scope of work
- Any existing agreement or offer letter
- 2
Check the classification
Part of the first draftConsider whether the arrangement is truly independent. Fixed hours, exclusivity, supervision, company equipment and a long unbroken term all point towards employment, and the terms or the arrangement may need to change.
- 3
Draft the agreement
Commonly within a weekCover the services and deliverables, fees and expenses, tax, ownership and assignment of intellectual property, confidentiality, conflicts of interest, liability, term and termination, and the consultant’s status as an independent contractor.
- 4
Sign before work starts
At signingStamp and sign the agreement before the consultant begins. An assignment signed after the work has been created is harder to obtain and leaves a gap in ownership.
Common questions
A consultant runs their own business and agrees to deliver a result; an employee works under the employer’s direction as part of its organisation. Courts look at control, integration, who bears the financial risk and who provides the tools.
If the relationship is in substance employment, the person may be entitled to provident fund contributions, gratuity, leave, notice and other statutory benefits, and the business may face back payments, interest and penalties.
The consultant, unless the agreement assigns it. Under the Copyright Act, the author of a work is its first owner, and an assignment has to be in writing and signed. The agreement should assign all rights, worldwide and for the full term of copyright.
During the engagement, a reasonable restriction is generally enforceable. A restriction after it ends is void under section 27 of the Indian Contract Act as a restraint of trade. Confidentiality obligations continue to apply.
Fees for professional or technical services are subject to tax deducted at source under the Income-tax Act at a rate different from salary, and a consultant above the registration threshold charges GST. The consultant is responsible for their own tax filings.
That depends on its terms. Most allow either side to end it on short notice, with payment for work done, and immediately for breach. A fixed-term agreement without a notice clause may run to the end of its term.
Related
To discuss a consultancy agreement, write to info@ireniclegal.com or call +91 96547 47331. Written by Adv. Kanika Marwaha Bindal; last updated 7 October 2026.