Written for independent consultants trading through their own companies, interim and fractional executives, and boutique consultancies that work with associates.
The short version
- Promise reasonable care and skill, not results.In England, Wales and Northern Ireland the law implies that duty. Promising results or fitness for purpose creates a stricter, often uninsured duty.
- Cap your liability at your PI limit.PI is your professional indemnity insurance. Or use a multiple of fees. Either way, cap per claim and in total, and cap indemnities too.
- Keep your toolkit, assign only named deliverables.License your templates and methods for the client's agreed internal use. Assign named deliverables in signed writing, and only once paid.
When a client is unhappy with your advice, whether that becomes your loss depends on what the contract promised, how far your liability is capped and whether your insurance answers. Client paper often quietly changes all three, so read the liability, indemnity and IP clauses before you read the fee.
The duty the law already implies
A business-to-business service contract implies a duty of reasonable care and skill in England, Wales and Northern Ireland. Promises of a result, fitness for purpose or best industry practice create a stricter and often uninsured duty, so strike them.
Supply of Goods and Services Act 1982 s.13
Negligence caps and standard terms must be reasonable, and the wording matters
Liability for death or personal injury caused by negligence cannot be excluded. Other negligence exclusions and standard terms must be reasonable, and your resources and insurance count when a court judges a money cap. Excluding loss of profit, revenue or savings does not necessarily exclude wasted expenditure, so list the excluded losses precisely.
Unfair Contract Terms Act 1977 ss.2, 3 and 11; Soteria Insurance v IBM United Kingdom [2022] EWCA Civ 440
What to negotiate on client paper
- A cap at your PI limit or a multiple of fees, per claim and in aggregate, with indemnities capped too.
- Consequential loss excluded, with the excluded losses listed precisely.
- Reasonable care and skill in place of guaranteed results.
- No pay-when-paid terms, no undefined acceptance, and no unilateral set-off of disputed or unrelated sums.
- No indemnity for the client's own off-payroll failures, and no control terms that contradict independent delivery.
- Insurance demands matched to cover you already hold, or the extra limit priced before you sign.
Who owns the work
You keep legal ownership unless you assign it in signed writing
The author is the first owner of copyright, except that an employee's work belongs to the employer, so a consultant owns its work unless it assigns it. An assignment of copyright is void unless it is in writing signed by or for the assignor. Without one, the client may have only a purpose-limited implied licence, although the facts of a commission can sometimes support an implied term that beneficial ownership passes.
CDPA 1988 ss.11 and 90(3); R Griggs Group Ltd v Evans [2005] EWCA Civ 11
So keep your reusable methods, templates and code as background IP, and license the client's agreed internal use of them. Assign named client deliverables, and only on payment. Take assignments from your associates first, or you will have nothing to pass on to the client, and a signed moral-rights waiver where the client will edit the work (CDPA 1988 s.87).
Unlimited liability can run past your insurance, and a broad assignment hands over the toolkit you sell to every other client.
Non-competes in client paper
A restrictive covenant must protect a legitimate interest and go no wider than necessary. A court may delete a severable part, but it will not rewrite it for you (Tillman v Egon Zehnder [2019] UKSC 32). Narrow a sector-wide non-compete or a broad non-solicit to the relevant people or clients and the shortest supportable duration.
Record the status facts in each SOW as well: the deliverables, acceptance, dependencies, change control, and how substitution and control really work. Control terms in client paper that contradict independent delivery weaken your IR35 position as well as your contract, because status looks at the client's right of control under the contract, not only day-to-day supervision.
Asked in Greymill
1. Liability: ask for a cap at your £1 million PI limit, or a multiple of the fee, per claim and in total. Unlimited liability can run past your insurance.
2. Guaranteed results: strike it. In England, Wales and Northern Ireland the law already implies a duty of reasonable care and skill. Promising results is a stricter duty, and often uninsured.
3. Ownership: keep your templates and methods as background IP (the toolkit you bring to every job), and license the client's agreed internal use of them. Assign only the named deliverables, once paid.
Why it matters: you keep legal ownership of your work unless you assign it in signed writing. 'All materials used' would hand over the toolkit you sell to every other client.
Shall I mark up their terms, with my wording and a reason for each change?
Ask it about your own business
Paste this into Greymill with your own figures, and Contracts & Disputes works it through for your business.
I run a consulting business in the UK. A client has sent its contract for [type of engagement] worth [fee]. It is governed by the law of [England and Wales / Scotland / Northern Ireland]. My PI cover is [limit, and whether per claim or aggregate]. Here are the liability, indemnity, IP, payment and non-compete clauses: [paste]. Mark up what to change, with the wording to propose and the reason for each change.
More for consulting and advisory in the UK
- My day rate looks healthy, so why does the year not add up?A consultant is paid for the days they bill, not the days they are available, and fixed fees and retainers can quietly turn a good rate into a poor one.Read the lesson
- How much of the money in my consulting company is actually mine to take?In a one-person consulting company part of every invoice belongs to HMRC, and drawing the rest the wrong way can lock cash away for at least a year.Read the lesson
- Is this contract inside IR35, who decides, and what does it do to my take-home?On every engagement through your own company, the client's size, sector and UK connection decide who makes the IR35 call, and a client's SDS can be formally challenged.Read the lesson
- Can I take a success fee for finding investors, or help with a client's visa application?Introducing investors, recommending investments, dealing with HMRC for clients and advising on visas each sit behind a regulatory line, and crossing some of them without permission is an offence.Read the lesson
- Placing associates with clients without their IR35 bill coming out of my marginWhen a boutique places associates who work through their own companies, it becomes a link in the off-payroll chain and can end up paying employer NI on their fees.Read the lesson
- How do I win public sector work, and stop depending on one big client?Consultancies win through referrals, a narrow niche and frameworks, and public sector work comes with its own rules on registration, conflicts, payment and IR35.Read the lesson
- Closing my consulting company: strike-off or liquidation, and the claim that arrives afterwardsClosing a consulting company the cheap way can turn retained profit into income, and stopping your PI on the same day can leave a later claim with nothing to answer it.Read the lesson
Open the interactive lesson · Every consulting and advisory lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- SGSA 1982 s.13 (Engagement terms, care and liability caps)
- CRA 2015 ss.49, 50, 57 (Engagement terms, care and liability caps)
- regs 29, 31, 36 (Engagement terms, care and liability caps)
- ss.2(1), 2(2), 3, 11(4) (Engagement terms, care and liability caps)
- [55] (Engagement terms, care and liability caps)
- www.bailii.org (Engagement terms, care and liability caps)
- s.11(1) and (2) (Intellectual property, confidentiality and restrictive covenants)
- s.90(3); s.87 (Intellectual property, confidentiality and restrictive covenants)
- [19] to [21], commissioning facts supported the implied term and no retained right to charge for wider use arose on the facts (Intellectual property, confidentiality and restrictive covenants)
- [2019] UKSC 32 (Intellectual property, confidentiality and restrictive covenants)
- Publication date, response deadline, para.1 options, and statement that it was not a formal consultation (Intellectual property, confidentiality and restrictive covenants)
- s.61T(3) to (5) (Deliverables in house style)
- 515C to 516A, personal service, control and other provisions consistent with a contract of service (Status tests and the cases that decide them)
- Nolan LJ at 216, approving the qualitative appreciation of the whole rather than a mechanical checklist (Status tests and the cases that decide them)
- [2024] UKSC 29 (Status tests and the cases that decide them)
- [2022] EWCA Civ 501 (Status tests and the cases that decide them)