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Document and article reviewed by Mark Costello on November 7, 2023 Written by Easy Legal Docs Editorial Team
In this article, we explore the fundamentals of Retainer Agreements and their importance in business relationships. You’ll also find a handy downloadable template to help you create your own effective agreement with ease.
A retainer agreement is a legal contract between a professional (like a lawyer, consultant, or freelancer) and a client. In essence, the client pays in advance for work to be specified later.
This agreement ensures the professional’s availability over a predefined period, while providing the client with a known cost for the services.
Retainer agreements offer numerous benefits. For professionals, they provide a predictable income stream, enabling better budgeting and financial planning.
For clients, they secure the professional’s time and expertise, often at a discounted rate compared to ad-hoc services.
There are generally three types of retainer agreements:
The Evergreen Retainer is a favorite among long-term client-professional relationships. As the retainer gets used, it’s replenished, creating a continuous cycle. This ensures that the professional is always on standby, offering peace of mind to clients who require frequent services.
The specifics of a retainer agreement can vary, but they generally involve the following steps:
To ensure that the agreement serves both parties effectively and efficiently, there are several key elements that it should contain.
Creating a Retainer Agreement doesn’t have to be a complicated process. With our Retainer Agreement template, you can easily draft a contract that protects both parties involved. Below is a step-by-step guide to help you navigate the key sections of the template.
In this section, clearly outline the services the consultant will provide. The more detailed you are, the less room there is for misunderstandings later on.
Specify the retainer fee and how it will be invoiced. Also, clarify which expenses are reimbursable and set a threshold for expenses requiring pre-approval.
This section establishes whether the consultant is an independent contractor or an employee. This is crucial for tax and legal liabilities.
Outline the conditions under which the agreement can be terminated. This could include a breach of contract or a specified notice period for voluntary termination.
Indicate the method for resolving any disputes—be it arbitration, mediation, or negotiation.
Specify that all work products created by the consultant will be the exclusive property of the company.
Include a clause that mandates the consultant to maintain the confidentiality of all information obtained during the term of the agreement.
By focusing on these key sections, you’ll be able to draft your own Retainer Agreement. Ready to get started? Create your free Retainer Agreement template today.
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