Terms of Business Template for Consultancy Businesses (UK 2025)
Last updated: February 2025
Why Consultancy Businesses Need a Terms of Business
Consultancy terms of business establish the standard framework for all advisory engagements, covering the basis on which advice is provided, liability for professional recommendations, fee structures, and the important limitation that consultants provide recommendations rather than guaranteeing specific outcomes. These terms protect the consultancy from claims where clients fail to implement advice correctly or where external factors affect outcomes beyond the consultant's control.
Key Clauses for Consultancy
- Basis of advice and limitation to recommendations only
- Professional liability cap and exclusion of consequential losses
- Fee structure covering day rates, expenses, and disbursements
- Engagement duration, extension, and termination provisions
Common Mistakes
- Not clearly stating that the consultant provides professional advice and recommendations, not guaranteed business outcomes
- Setting the liability cap too low relative to potential exposure, which may be challenged as unreasonable under UCTA 1977
Template Sections
- Basis of professional advice and limitations
- Liability cap and exclusion schedule
- Fee structure and expense policy
FAQ
Can a consultancy exclude all liability for the advice it provides?
No. Under the Unfair Contract Terms Act 1977, you cannot exclude liability for negligence causing death or personal injury, and other liability exclusions must satisfy a test of reasonableness. The standard approach is to cap total liability at a reasonable multiple of fees, typically two to five times the engagement value, and exclude indirect and consequential losses.
Should consultancy terms of business address client implementation of advice?
Yes. Include a clause clarifying that the consultant's responsibility ends with the delivery of advice and recommendations, and that implementation decisions and their outcomes are the client's responsibility. Specify that the advice is based on information provided by the client and that the consultant is not liable if that information is incomplete, inaccurate, or misleading.
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Get Started FreeThis is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.
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