Template Tuesday: The Five-Page Shield Every Small Business Needs

Good Morning!

1. Feature: The Five-Page Shield Every Small Business Needs (3 min)

2. From the Archive:

   • What Businesses Should Consider Using a C Corp Instead of an LLC?

   • Protecting Your Intellectual Property 101

-TCoL

Missed our last feature article? Who Really Owns Your LLC When You’re Gone

Every small business eventually faces the same moment. The inbox pings with an offer that sounds promising. A consultant says they can help with marketing, IT, HR, or compliance. They are talented, available, and ready to start tomorrow.

That is exactly when you need to slow down and not sign their agreement.

A well-drafted short form Consulting Agreement is not red tape. It is protection. It keeps expectations clear, ownership secure, and disputes from taking root.

The version available to TCL Premium subscribers is only a few pages long, but every section earns its place. 

Let’s walk through what makes a great agreement work for small businesses and why it matters.

1. Start with Scope and Control

A strong agreement begins by defining the work and who decides what.

It opens with this language:

“The Company may, from time to time, request that Consultant perform specific services (the ‘Services’) as described in a written Work Order issued by the Company and accepted by the Consultant.”

That line makes control clear. The company defines the assignment. The consultant agrees before starting. Most disputes come from vague expectations, not bad intentions.

A Work Order system, or a simple Exhibit A for one-time projects, ensures the scope, fees, and timeline are written down. That is the first rule of small business contracting. Put every commitment in writing.

2. Protect Your Right to End the Relationship

Flexibility keeps a small business alive. The Termination clause protects that right.

“Either Party may terminate this Agreement or any Work Order for any reason upon ten (10) days’ written notice.”

Ten days gives you breathing room to make a change without being trapped. It also says that if the consultant breaches confidentiality or intellectual property duties, the company owes no further payments. That one line can save real money.

Another practical detail requires cooperation. The consultant must help transition active projects for up to ten hours after termination. That gives you continuity when it matters most.

3. Tie Payment to Performance

The payment section looks short, but it carries weight. It keeps leverage with the business.

“Company may withhold payment of disputed or nonconforming amounts until Consultant cures the deficiency to Company’s reasonable satisfaction.”

This means no payment until the work is right. The clause also sets thirty days for payment or forty-five if the company is waiting for a client payment. It allows enough time to verify the invoice before releasing funds.

Consultants are paid for results, not effort. A good agreement says so.

4. Require Proof of Insurance

Even remote consultants can cause real losses through data errors or software issues. That is why the template includes this:

“Consultant shall maintain, at its own expense, insurance… including Commercial General Liability… and Professional Liability or Errors and Omissions insurance with limits not less than $1,000,000 per claim.”

It also requires certificates before work starts. That one step filters out consultants who are not operating professionally.

5. Make the Consultant Stand Behind Their Work

The indemnification clause is the backbone of accountability.

“Consultant shall defend, indemnify, and hold harmless the Company, its affiliates, officers, directors, employees, agents, and clients from and against any and all claims… arising out of or related to any act or omission of Consultant.”

In plain terms, if the consultant causes harm, they must fix it and pay the cost. It keeps the company from being dragged into claims it did not create. Strong, simple, and fair.

6. Own What You Pay For

If you pay for a deliverable, it must belong to you. Without clear ownership language, a consultant may retain rights to the very work you purchased. This agreement removes that risk.

“Consultant hereby assigns to Company all right, title, and interest in and to all deliverables, inventions, discoveries, improvements, or works of authorship created in connection with the Services.”

That sentence closes a major loophole. The company owns what it pays for. Consultants keep their own preexisting tools and grant a permanent license for any material embedded in the final product. The result is clean ownership and no confusion.

7. Guard Confidential Information

Consultants often see business data, internal processes, and client lists. The confidentiality clause protects what matters.

“Consultant agrees to hold all nonpublic information disclosed by Company or its clients (‘Confidential Information’) in strict confidence and to use it solely to perform the Services.”

It also requires that information be returned or destroyed at the end of the project. That small requirement prevents long term data exposure and shows the company takes privacy seriously.

8. Cover the Basics That Keep You Out of Court

The remaining clauses look routine but carry practical weight. The arbitration clause keeps disputes out of public courtrooms. The non solicitation clause prevents a consultant from hiring your staff or poaching your clients. The force majeure clause protects both sides if events beyond control disrupt performance.

Each piece may look minor, but together they create structure. Clear procedures save time, money, and focus when things go wrong.

9. Keep It Simple and Signed

The last page makes execution easy. It allows electronic signatures and counterparts so deals can close quickly. There is no reason to skip formalities. A signed short form agreement provides full legal protection and peace of mind.

A Compact Contract with Real Value

A great consulting agreement does not need to be long. It needs to be clear, balanced, and enforceable. Every sentence in a well-drafted short form agreement protects your business without bogging you down.

Small businesses get approached for consulting work constantly. Most consultants are honest and capable, but good intentions do not replace good documentation. A short, strong agreement turns trust into structure.

The right contract is not a barrier to doing business. It is the reason business runs smoothly.

Need this Consulting Agreement template right away, plus twenty other templates in our ever-expanding Template Library? Upgrade from your free subscription to Premium for $7.95/mo. or $85.86/yr.

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