The Perils of Using Form Agreements

Set forth here is a form of consulting agreement available from the collection of OneCle.com Business Contracts from SEC filings. OneCle provides a useful reservoir of publicly available contracts.

The problem, however, with using these or any other contracts as a model for your agreement is that your situation may differ in significant ways from the circumstances surrounding the publicly available contract (the "PAC"). For instance, the PAC may or may not have been subject to negotiation. Thus, the PAC may be stronger or weaker from your point of view than your agreement could be.

For example, the below agreement, although not completely unfair to the Consultant, could be substantially improved from the Consultant's perspective. For instance, the indemnity provision is overly broad. At the very least, a mutual indemnity obligation on the part of the Company could be negotiated.

Also, it is commercially reasonable for the Consultant to make more limited Warranties and Representations than are present below. In addition, standard UCC disclaimer language is usually appropriate in such an agreement. So too would be provisions limiting the Company's remedies for breach of contract, limiting the Consultant's liability for incidental and consequential damages and limiting the total dollar amount of the Consultant's exposure to liability.