Drafting a consultancy agreement: what belongs in it

Drafting a consultancy agreement begins with two questions that together determine the structure of the rest of the contract: exactly what the consultant has been hired for, and who will be allowed to use the result. The legal basis is the contract for services (Article 7:400 of the Dutch Civil Code), which already provides you with a large part of the ground rules. What you need to arrange yourself are the scope, remuneration, intellectual property, liability, and termination. Additionally, the structure must be such that it does not result in an employment contract. Below are the standard building blocks, with the provisions that make the difference in practice.

The short answer

1. Scope: describe the assignment in terms of results or phases, not attendance.
2. Remuneration: hourly rate, daily rate or fixed price per phase, with a payment term within the limits of Art. 6:119a BW.
3. Duration and termination: end date or indefinite period with notice period, with the understanding that Art. 7:408 paragraph 1 of the Dutch Civil Code always grants the client the right to terminate.
4. Intellectual property: transfer by deed or a defined license, plus an arrangement for the consultant's background knowledge.
5. Liability: limited to a reasonable amount, with the exception of intent and willful recklessness.
6. Independence: no hierarchical relationship, no embedding in the organization, but own resources and multiple clients.

Drafting a consultancy agreement: the assignment description

The assignment description does two things at once. It determines what the consultant is paid for, and it is the most important piece of evidence that there is no employment relationship. Therefore, describe in terms of the work to be delivered: a baseline assessment, an implementation plan, three work sessions, and a final report. Avoid formulations such as “available for three days a week” or “supports the team with incidental tasks,” as this is a description of availability and is consistent with an employment contract.

Additionally, include what falls outside the scope of the assignment, how additional work is determined, and what information or cooperation from the client the consultant requires. If that cooperation is lacking, the deadlines will be extended. Without this provision, the delay will easily fall on the consultant.

Compensation, additional work and payment

• Pricing structure. Hourly rate for open investigations, fixed price per phase for a defined trajectory. A fixed price without scope definition is the most common source of conflict.
• Expenses. The contractor is entitled to reimbursement of expenses not included in the wages (Art. 7:406 BW). Explicitly specify which costs are and are not included in the rate.
• Additional work. Only after written confirmation of agreement, at a pre-known rate.
• Payment term. Between enterprises, a maximum of sixty days applies, and thirty days when a large enterprise purchases from an SME (Art. 6:119a BW). A longer term is void, after which the statutory term of thirty days applies.
• Late payment. Statutory commercial interest by operation of law (Art. 6:119a BW) and extrajudicial collection costs (Art. 6:96 paragraph 2 BW).
• Indexation. For trajectories longer than a year, an annual adjustment, for example based on the CBS index for business services.

Intellectual property and confidentiality

Unless otherwise agreed, the copyright to everything the consultant creates remains with the consultant. This is because the employer's copyright under Article 7 of the Copyright Act applies only within an employment relationship, not in the case of an assignment. If the client wishes to be able to freely use, adapt, and further develop the report, model, or tool, a transfer is required, which must be recorded in a deed (Article 2, paragraph 3 of the Copyright Act). A provision in the signed agreement satisfies this requirement.

In doing so, divide into two categories. The consultant's background knowledge, methodology, templates, and standard models remain his property; the client acquires a right of use for them. The documents specifically created for this assignment are transferred to the client. This division is workable for both sides and prevents a dispute in which the consultant is no longer allowed to use his own working method with a subsequent client.

The same principle applies to confidentiality as under the Trade Secrets Protection Act: information is only protected if you take reasonable measures yourself. Describe what is confidential, how long the confidentiality continues after completion, and what happens to copies at the end of the assignment. Attach a penalty clause (Art. 6:91 BW), because otherwise you will have to prove damages, which are virtually impossible to calculate in the event of information leaks.

Liability and insurance

Advice that turns out wrong can lead to substantial damage, while compensation is limited. A limitation of liability is therefore customary and valid, with limits. An exoneration for intent or conscious recklessness does not hold up: invoking it is unacceptable according to standards of reasonableness and fairness (Article 6:248, paragraph 2, of the Dutch Civil Code). If you include that exception yourself, the rest of the provision remains valid.

A workable structure contains four elements: a ceiling (for example, the invoice amount over the last twelve months or the payout under the professional liability insurance), exclusion of indirect damages such as lost profits and missed savings, a time limit within which a complaint must be lodged, and the obligation for the consultant to be insured stating the insured amount. A ceiling that exceeds the insurance coverage creates a false sense of security.

Also note the duty to complain under Article 6:89 of the Dutch Civil Code: the client must protest within a reasonable time after discovering or having reason to discover a defect in the performance. A contractual period clarifies what reasonable time means in this context.

Demonstrate independence

Since January 1, 2025, the Tax and Customs Administration has once again fully enforced the classification of employment relationships. In the event of an incorrect classification, an additional assessment of payroll taxes will be levied on the client, potentially accompanied by a fine. The assessment is based on the criteria identified by the Supreme Court in the 2023 Deliveroo ruling, including the integration of the work within the organization, freedom in execution, commercial risk, and whether the worker acts as an entrepreneur.

In the contract, you support this with provisions regarding substitution, own company assets, own working hours, liability for own errors, repairs at own expense, and the freedom to work for others. More important than the text is the execution: a consultant who is on the personnel list, reports to a team leader, and requests leave cannot be made independent by any clause.

A brief real-life example: a wholesaler hires an interim purchasing manager for four days a week, on a structural basis, with their own desk and a seat on management meetings. The contract is called a consultancy agreement, but the actual structure suggests an employment relationship. By restructuring the assignment into two distinct projects with their own milestones, and allowing the consultant to keep their own laptop and work schedule, the picture changes.

Honest recommendation

You do not need a lawyer for this for a one-off assignment of limited scope, with an advisor who demonstrably has multiple clients and uses their own resources. Define the scope, rate, duration, confidentiality, and usage rights of the delivered documents, refer to your general terms and conditions, and sign. Even with a recurring advisor with whom you have worked well for years, a compact agreement with a good assignment description is often sufficient.

Do engage a professional if the involvement is long-term and virtually full-time, if the consultant manages employees, if software, trademarks, or other valuable rights are being created, if the advisor gains access to personal data or trade secrets, or if the damages resulting from faulty advice could far exceed the compensation. These are the cases in which the cost of a sound contract pales in comparison to a payroll tax reassessment or a dispute regarding ownership of the delivered software.

Read more: what is a consultancy agreement and having a consultancy agreement drafted. You can arrange this directly via the consultancy agreement.

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