Consulting Services Agreement

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CONSULTING SERVICES AGREEMENT

State of Arizona

THIS CONSULTING SERVICES AGREEMENT (this "Agreement") is made and entered into as of the [____] day of [________________], 20[____] (the "Effective Date"), by and between:

CLIENT:
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Entity Type: ☐ Individual ☐ Sole Proprietorship ☐ LLC ☐ Corporation ☐ Partnership ☐ Other: [________________]
State of Organization: [________________________________]
Federal Tax ID/EIN: [________________________________]

(hereinafter referred to as "Client")

AND

CONSULTANT:
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Entity Type: ☐ Individual ☐ Sole Proprietorship ☐ LLC ☐ Corporation ☐ Partnership ☐ Other: [________________]
State of Organization (if applicable): [________________________________]
Federal Tax ID/EIN or SSN: [________________________________]
Arizona Transaction Privilege Tax License No. (if applicable): [________________________________]

(hereinafter referred to as "Consultant")

Client and Consultant are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Client desires to engage Consultant to provide certain consulting and professional services as more particularly described herein and in the Statement of Work attached hereto as Exhibit A; and

WHEREAS, Consultant represents that it possesses the necessary qualifications, skills, experience, expertise, and professional licenses (if required) to perform such consulting services in compliance with all applicable laws and professional standards; and

WHEREAS, Consultant desires to provide such consulting services to Client upon the terms and conditions set forth in this Agreement; and

WHEREAS, the Parties intend to establish an independent contractor relationship and not an employment, partnership, joint venture, or agency relationship;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1: DEFINITIONS

1.1 "Affiliate" means, with respect to any Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party, where "control" means the ownership of more than fifty percent (50%) of the voting securities or equivalent ownership interest.

1.2 "Business Day" means any day other than a Saturday, Sunday, or a day on which banks in the State of Arizona are authorized or required to close.

1.3 "Change Order" means a written document signed by authorized representatives of both Parties that modifies the scope, schedule, fees, or other terms of a Statement of Work.

1.4 "Confidential Information" means any and all non-public information, in any form or medium, disclosed by either Party to the other Party, whether orally, in writing, electronically, or by inspection, that relates to the disclosing Party's business, products, services, research, development, trade secrets, know-how, personnel, customers, suppliers, vendors, finances, pricing, business strategies, marketing plans, technical data, inventions, processes, or other proprietary matters. Confidential Information includes, without limitation, information that qualifies as a "trade secret" under the Arizona Uniform Trade Secrets Act (AUTSA), A.R.S. § 44-401 et seq.

1.5 "Deliverables" means any and all work product, reports, analyses, recommendations, assessments, documents, data, software, code, designs, specifications, presentations, inventions, discoveries, improvements, or other materials created, developed, prepared, or produced by Consultant in connection with the performance of the Services, as specified in the applicable Statement of Work.

1.6 "Effective Date" means the date first written above.

1.7 "Intellectual Property" or "Intellectual Property Rights" means all patents, patent applications, copyrights, copyright registrations, trademarks, trademark registrations, service marks, trade names, trade dress, trade secrets, know-how, inventions, discoveries, improvements, ideas, designs, processes, techniques, methodologies, formulae, algorithms, software, databases, and other intellectual property rights, whether registered or unregistered, and all applications for and rights to apply for any of the foregoing, anywhere in the world.

1.8 "Pre-Existing Materials" means any materials, methodologies, tools, templates, frameworks, software, libraries, know-how, techniques, or other intellectual property owned by Consultant prior to the Effective Date or developed by Consultant outside the scope of this Agreement and independently of the Services.

1.9 "Services" means the consulting and professional services to be provided by Consultant as described in Article 2 hereof and in the Statement of Work attached hereto as Exhibit A, including any subsequent Statements of Work executed by the Parties.

1.10 "Statement of Work" or "SOW" means the document attached hereto as Exhibit A, and any subsequent statements of work executed by the Parties pursuant to this Agreement, which describe the specific Services, Deliverables, timelines, milestones, acceptance criteria, and fees applicable to each engagement.

1.11 "Work Product" means all Deliverables, inventions, discoveries, improvements, ideas, concepts, techniques, methods, processes, designs, works of authorship, documentation, and other work product conceived, created, developed, prepared, or reduced to practice by Consultant, solely or jointly with others, in connection with or arising out of the performance of the Services.

ARTICLE 2: SCOPE OF SERVICES

2.1 Engagement. Client hereby engages Consultant, and Consultant hereby accepts such engagement, to perform the Services described in the Statement of Work attached hereto as Exhibit A and incorporated herein by reference. The Parties may execute additional Statements of Work from time to time, each of which shall be subject to the terms and conditions of this Agreement.

2.2 Standard of Performance. Consultant shall perform the Services:

(a) In a professional, diligent, workmanlike, and timely manner;

(b) Consistent with the highest standards and practices in Consultant's industry or profession;

(d) Using personnel with the appropriate skills, training, qualifications, and experience;

(e) In compliance with all applicable federal, state, and local laws, rules, regulations, ordinances, and professional standards, including the laws of the State of Arizona; and

(f) Free from material defects and errors.

2.3 Service Deliverables. Consultant shall provide the Deliverables specified in each Statement of Work in accordance with the delivery schedule, format requirements, and acceptance criteria set forth therein. Unless otherwise specified, all Deliverables shall be provided in electronic format compatible with Client's systems.

2.4 Additional Services. Any services not specifically described in an executed Statement of Work that Client requests and Consultant agrees to perform shall be documented in either:

(a) A written amendment to the existing Statement of Work; or

(b) A new Statement of Work.

No additional services shall be performed, and no fees shall be due therefor, unless documented in writing and signed by authorized representatives of both Parties.

2.5 Consultant Personnel.

(a) Consultant shall assign qualified personnel to perform the Services. Key personnel, if designated in the Statement of Work, shall not be removed or replaced without Client's prior written consent.

(b) Client may request replacement of any Consultant personnel who, in Client's reasonable judgment, do not perform satisfactorily. Consultant shall promptly replace such personnel at no additional cost to Client.

(c) Consultant may, with prior written consent of Client (which shall not be unreasonably withheld), engage subcontractors to perform portions of the Services, provided that:

Consultant shall remain fully responsible for the performance and conduct of such subcontractors;
Subcontractors shall be bound by confidentiality and intellectual property provisions at least as restrictive as those in this Agreement;
Consultant shall ensure subcontractors comply with all terms of this Agreement.

2.6 Client Cooperation and Responsibilities. Client shall:

(a) Provide Consultant with reasonable and timely access to Client's personnel, facilities, systems, information, data, and resources as reasonably necessary for Consultant to perform the Services;

(b) Designate a representative to serve as the primary point of contact for communications with Consultant regarding the Services;

(d) Ensure that all information and materials provided to Consultant are accurate and complete;

(e) Perform Client responsibilities identified in the Statement of Work in a timely manner.

2.7 Change Orders. Either Party may request changes to the scope, schedule, or other aspects of the Services by submitting a written change order request to the other Party. No change to the Services shall be effective unless documented in a written Change Order signed by authorized representatives of both Parties.

2.8 Project Management. Unless otherwise specified in the Statement of Work, Consultant shall:

(a) Provide regular status reports to Client at intervals specified in the Statement of Work;

(b) Promptly notify Client of any issues, delays, or circumstances that may affect the timely or successful completion of the Services;

ARTICLE 3: TERM AND TERMINATION

3.1 Term. This Agreement shall commence on the Effective Date and shall continue for an initial term of [________________] (the "Initial Term"), unless earlier terminated in accordance with this Article 3.

☐ No Automatic Renewal: This Agreement shall expire at the end of the Initial Term unless the Parties execute a written extension.

☐ Automatic Renewal: Following the Initial Term, this Agreement shall automatically renew for successive [________________] periods (each, a "Renewal Term"), unless either Party provides written notice of non-renewal to the other Party at least [____] days prior to the expiration of the then-current term.

3.2 Statement of Work Term. Each Statement of Work shall have its own term as specified therein. Expiration or termination of a Statement of Work shall not affect the validity of this Agreement or any other Statement of Work.

3.3 Termination for Convenience.

(a) Either Party may terminate this Agreement or any Statement of Work for any reason or no reason upon [____] days' prior written notice to the other Party.

(b) Upon termination for convenience by Client, Client shall pay Consultant for:

All Services satisfactorily performed through the effective date of termination;
All non-cancelable expenses properly incurred prior to receipt of termination notice;
Pro-rata portion of any prepaid fixed fees for work completed.

3.4 Termination for Cause. Either Party may terminate this Agreement or any Statement of Work immediately upon written notice to the other Party if:

(a) The other Party commits a material breach of any provision of this Agreement or the applicable Statement of Work and fails to cure such breach within [____] days after receipt of written notice specifying the nature of the breach in reasonable detail;

(b) The other Party commits a material breach that by its nature cannot be cured;

(c) The other Party becomes insolvent, makes a general assignment for the benefit of creditors, files or has filed against it a petition in bankruptcy, has a receiver or trustee appointed for a substantial portion of its assets, or ceases to conduct business in the normal course;

(d) The other Party engages in fraud, gross negligence, or willful misconduct in connection with this Agreement.

3.5 Termination for Non-Payment. Consultant may terminate this Agreement or any Statement of Work upon [____] days' written notice if Client fails to pay any undisputed amount when due and such failure continues for [____] days after written notice thereof.

3.6 Effect of Termination. Upon termination or expiration of this Agreement for any reason:

(a) Consultant shall immediately cease performing the Services unless otherwise directed by Client;

(b) Consultant shall deliver to Client within [____] days:

All completed Deliverables and Work Product;
All partially completed Deliverables and Work Product in their then-current state;
All Client materials, data, and Confidential Information in Consultant's possession or control;
A final accounting of all time spent and expenses incurred;

(c) Client shall pay Consultant for all Services satisfactorily performed and expenses properly incurred through the effective date of termination, less any amounts previously paid;

(d) Each Party shall return or destroy, at the disclosing Party's election, all Confidential Information of the other Party, except as required to be retained by law or professional standards;

(e) All licenses granted by Consultant to Client for completed and paid-for Deliverables and Work Product shall survive termination;

(f) The provisions of Articles 1, 5, 6, 7, 8, 9, 10, and 14 shall survive termination or expiration of this Agreement.

3.7 Transition Assistance. Upon request by Client and at Client's expense, Consultant shall provide reasonable transition assistance for a period of up to [____] days following termination to facilitate the orderly transfer of the Services to Client or a successor consultant.

ARTICLE 4: COMPENSATION AND PAYMENT TERMS

4.1 Fee Structure. In consideration of the Services to be performed by Consultant hereunder, Client shall pay Consultant the fees set forth in the applicable Statement of Work. Unless otherwise specified in the Statement of Work, fees shall be calculated as follows (check all that apply):

☐ Fixed Fee: Total fixed fee of $[________________] for the complete scope of Services described in the Statement of Work, payable as follows: [________________________________].

☐ Hourly Rate:

Senior Consultant/Principal: $[________] per hour
Consultant: $[________] per hour
Associate/Analyst: $[________] per hour
Administrative/Support: $[________] per hour
Not-to-Exceed Amount (if applicable): $[________________]

☐ Daily Rate: $[________] per day (minimum [____] hours per day) for services rendered by Consultant.

☐ Monthly Retainer: $[________] per month for up to [____] hours of Services. Additional hours beyond the retainer shall be billed at $[________] per hour. Unused retainer hours ☐ shall ☐ shall not roll over to subsequent months.

☐ Milestone-Based: Payment upon completion and acceptance of milestones as specified in the Statement of Work.

☐ Value-Based/Success Fee: [________________________________] (describe the fee arrangement and any conditions or performance metrics).

4.2 Rate Adjustments. Unless otherwise specified:

(a) Fee rates shall remain fixed for the Initial Term of this Agreement.

(b) For Renewal Terms, Consultant may increase fee rates by up to [____]% upon [____] days' written notice prior to the start of the Renewal Term.

4.3 Expenses and Reimbursement.

(a) Pre-Approved Expenses: Client shall reimburse Consultant for all reasonable and pre-approved out-of-pocket expenses incurred by Consultant in connection with the performance of the Services. Reimbursable expenses may include:

Travel (airfare, rail, car rental, mileage at the then-current IRS standard rate)
Lodging
Meals (reasonable and customary amounts)
Parking and ground transportation
Materials, supplies, and equipment specifically required for the Services
Third-party fees and licenses required for the Services
Other: [________________________________]

(b) Expense Approval Thresholds:

Expenses up to $[________] individually: No pre-approval required
Expenses exceeding $[________] individually: Prior written approval required
Monthly expense cap: $[________] (unless otherwise approved in writing)

(c) Expense Documentation: Consultant shall provide itemized receipts and supporting documentation for all expense reimbursement requests exceeding $[____].

4.4 Invoicing.

(a) Consultant shall submit invoices to Client:
☐ Monthly, by the [____] day of the following month
☐ Bi-weekly
☐ Upon completion of each milestone
☐ Upon completion of the Services
☐ Other: [________________________________]

(b) Each invoice shall include:

Invoice number and date
Statement of Work reference number
Billing period covered
Detailed description of Services performed
Hours worked by personnel (if hourly billing)
Hourly rates and calculations
Milestones completed (if milestone billing)
Itemized expenses with receipts attached
Total amount due
Payment instructions

(c) Invoices shall be submitted to:
Contact: [________________________________]
Email: [________________________________]
Address: [________________________________]

4.5 Payment Terms.

(a) Client shall pay all undisputed amounts within [____] days of receipt of a proper invoice.

(b) Payments shall be made by:
☐ Check payable to [________________________________]
☐ ACH/Electronic Transfer to:
Bank Name: [________________________________]
Routing Number: [________________________________]
Account Number: [________________________________]
☐ Wire Transfer to: [________________________________]
☐ Credit Card (subject to [____]% processing fee)
☐ Other: [________________________________]

4.6 Late Payment Interest. Pursuant to A.R.S. § 44-1201, any amounts not paid when due shall bear interest at the rate of:

☐ Ten percent (10%) per annum (Arizona statutory default rate under A.R.S. § 44-1201); or

☐ [____]% per annum (not to exceed the maximum rate permitted by Arizona law); or

☐ One and one-half percent (1.5%) per month (18% per annum), as agreed by the Parties;

from the due date until paid in full. Interest charges shall be in addition to all other remedies available to Consultant.

Arizona Law Note: For a non-medical loan, indebtedness, or obligation, A.R.S. § 44-1201(A)(2) provides a 10% annual rate unless the parties contract in writing for a different rate; the statute permits any written rate for such a non-medical obligation.

4.7 Disputed Invoices.

(a) If Client disputes any portion of an invoice in good faith, Client shall:

Notify Consultant in writing within [____] days of receipt of such invoice;
Specify in reasonable detail the nature of the dispute and the amount disputed;
Pay all undisputed amounts in accordance with Section 4.5.

(b) The Parties shall work diligently and in good faith to resolve any disputed amounts within thirty (30) days of Client's dispute notice.

(c) If the Parties cannot resolve the dispute within thirty (30) days, either Party may pursue the dispute resolution procedures set forth in Article 14.

4.8 Taxes.

(a) Consultant shall be solely responsible for all federal, state, and local taxes arising from the compensation paid to Consultant under this Agreement, including without limitation income taxes, self-employment taxes, employment taxes, Arizona Transaction Privilege Tax (if applicable), and any other taxes or contributions required by law.

(b) Client shall not withhold any taxes from payments to Consultant.

(d) Client shall issue IRS Form 1099 to Consultant as required by law.

(e) Unless otherwise specified, all fees are exclusive of sales, use, or transaction privilege taxes. If any such taxes are applicable to the Services, Client shall pay such taxes or provide Consultant with a valid exemption certificate.

Arizona Tax Note: Arizona imposes a Transaction Privilege Tax (TPT) on certain services. The applicability of TPT to consulting services depends on the nature of the services. Consult the Arizona Department of Revenue for current TPT classifications.

4.9 Records and Audit.

(a) Consultant shall maintain accurate and complete records of all time spent, expenses incurred, and work performed in connection with the Services for a period of [____] years following the termination or expiration of this Agreement.

(b) Upon reasonable notice (not less than [____] Business Days), Client may audit Consultant's records related to invoices submitted under this Agreement. Such audits shall be conducted during normal business hours at Consultant's place of business.

(c) If an audit reveals an overcharge of more than [____]%, Consultant shall reimburse Client for the overcharged amount plus Client's reasonable audit costs.

ARTICLE 5: CONFIDENTIALITY AND TRADE SECRETS

5.1 Confidentiality Obligations. Each Party (as "Receiving Party") agrees to:

(a) Hold in strict confidence all Confidential Information of the other Party (as "Disclosing Party");

(b) Not disclose, publish, or otherwise disseminate any Confidential Information to any third party without the Disclosing Party's prior written consent;

(c) Not use any Confidential Information for any purpose other than the performance of its obligations or exercise of its rights under this Agreement;

(d) Not copy or reproduce any Confidential Information except as reasonably necessary for the purposes of this Agreement;

(e) Take all reasonable precautions to prevent unauthorized disclosure or use of Confidential Information.

5.2 Protective Measures. The Receiving Party shall protect the Disclosing Party's Confidential Information using the same degree of care that it uses to protect its own confidential information of a similar nature, but in no event less than reasonable care. The Receiving Party shall:

(a) Limit access to Confidential Information to those of its employees, agents, contractors, and professional advisors who have a legitimate need to know such information for purposes of this Agreement;

(b) Ensure that all persons with access to Confidential Information are bound by written confidentiality obligations at least as restrictive as those contained herein;

(c) Implement appropriate physical, electronic, and administrative safeguards to protect Confidential Information from unauthorized access, use, or disclosure.

5.3 Exclusions. The obligations set forth in this Article 5 shall not apply to information that the Receiving Party can demonstrate:

(a) Is or becomes publicly available through no fault, breach, or wrongful act of the Receiving Party;

(b) Was rightfully in the Receiving Party's possession prior to receipt from the Disclosing Party, as evidenced by written records, without any obligation of confidentiality;

(c) Is rightfully obtained by the Receiving Party from a third party without restriction on disclosure and without breach of any obligation to the Disclosing Party;

(d) Is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information, as evidenced by written records; or

(e) Is approved for release by prior written authorization of the Disclosing Party.

5.4 Required Disclosure. If the Receiving Party is compelled by law, regulation, legal process, or governmental authority to disclose any Confidential Information, the Receiving Party shall:

(a) Provide the Disclosing Party with prompt written notice of such requirement (to the extent legally permitted) to allow the Disclosing Party opportunity to seek a protective order or other appropriate remedy;

(b) Cooperate with the Disclosing Party's reasonable efforts to obtain a protective order or other confidential treatment;

(d) Use reasonable efforts to ensure that any Confidential Information so disclosed is accorded confidential treatment.

5.5 Trade Secrets Under Arizona Law. The Parties acknowledge that certain Confidential Information may constitute "trade secrets" as defined under the Arizona Uniform Trade Secrets Act (AUTSA), A.R.S. § 44-401 et seq. With respect to such trade secrets:

(a) A "trade secret" under AUTSA means information, including a formula, pattern, compilation, program, device, method, technique, or process, that both: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy (A.R.S. § 44-401(4));

(b) The confidentiality obligations set forth in this Article 5 shall continue for as long as such information remains a trade secret under applicable law;

(c) Each Party shall implement and maintain reasonable measures to preserve the trade secret status of such information, including without limitation confidentiality agreements, access controls, and security protocols;

(d) The remedies available under AUTSA, including injunctive relief (A.R.S. § 44-402), actual-loss and unjust-enrichment damages or a reasonable royalty (A.R.S. § 44-403(A)), and exemplary damages up to twice the award made under § 44-403(A) for willful and malicious misappropriation (A.R.S. § 44-403(B)), shall be in addition to any remedies available under this Agreement;

(e) The Arizona Supreme Court has held that AUTSA does not displace common-law claims based on alleged misappropriation of confidential information that is not a trade secret. Orca Communications Unlimited, LLC v. Noder, 236 Ariz. 180 (2014). Accordingly, the Parties' contractual obligations regarding non-trade-secret Confidential Information remain independently enforceable.

5.6 Return or Destruction of Confidential Information. Upon termination or expiration of this Agreement, or upon the Disclosing Party's written request at any time:

(a) The Receiving Party shall promptly return or, at the Disclosing Party's election, destroy all Confidential Information of the Disclosing Party, including all copies, extracts, and summaries thereof;

(b) The Receiving Party shall certify in writing, signed by an authorized officer, that it has complied with this Section 5.6;

Copies of Confidential Information in accordance with its standard backup and archival procedures, provided such copies remain subject to the confidentiality obligations herein;
Copies required to be retained by law, regulation, or professional standards;
Work product and records that incorporate Confidential Information solely to the extent necessary to evidence the Receiving Party's rights and obligations under this Agreement.

5.7 Injunctive Relief. The Parties acknowledge that a breach of this Article 5 may cause irreparable harm for which monetary damages would be an inadequate remedy. Accordingly, in the event of any breach or threatened breach, the non-breaching Party shall be entitled to seek injunctive relief, specific performance, or other equitable remedies from any court of competent jurisdiction, without the necessity of proving actual damages, in addition to any other remedies available at law or in equity.

5.8 Duration of Confidentiality Obligations. Except for trade secrets (which shall be protected for as long as they remain trade secrets under AUTSA), the confidentiality obligations under this Article 5 shall survive termination or expiration of this Agreement for a period of [____] years.

ARTICLE 6: INTELLECTUAL PROPERTY AND WORK PRODUCT

6.1 Ownership of Work Product. All Work Product created by Consultant in the performance of the Services shall be the sole and exclusive property of Client. Consultant hereby irrevocably assigns and agrees to assign to Client all right, title, and interest in and to all Work Product worldwide, including all Intellectual Property Rights therein, free and clear of all liens, claims, and encumbrances.

6.2 Work Made for Hire. To the extent any Work Product constitutes a "work made for hire" under 17 U.S.C. § 101, Client shall be considered the author and copyright owner under 17 U.S.C. § 201(b), unless the Parties expressly agree otherwise in a signed writing. To the extent any Work Product does not qualify as a work made for hire, Consultant hereby irrevocably assigns to Client all copyrights and related rights therein.

6.3 Assignment of Inventions. Consultant hereby assigns to Client all inventions, discoveries, improvements, and innovations, whether or not patentable, that are conceived, created, developed, or reduced to practice by Consultant, solely or jointly with others, in connection with the Services or using Client's Confidential Information ("Assigned Inventions").

6.4 Further Assurances. Consultant agrees to:

(a) Execute any documents and take any actions reasonably requested by Client to evidence, perfect, register, or enforce Client's ownership of the Work Product and Assigned Inventions in any jurisdiction;

(b) Cooperate with Client in the preparation and prosecution of any patent, trademark, or copyright applications related to the Work Product;

(c) Grant Client an irrevocable power of attorney, coupled with an interest, to execute documents on Consultant's behalf for the foregoing purposes if Consultant fails or refuses to do so within ten (10) days of Client's request.

6.5 Consultant's Pre-Existing Materials.

(a) Consultant retains all right, title, and interest in and to Pre-Existing Materials. A list of Pre-Existing Materials that may be incorporated into the Deliverables is attached hereto as Exhibit B (if applicable).

(b) To the extent any Pre-Existing Materials are incorporated into or necessary for the use of the Deliverables, Consultant hereby grants to Client a non-exclusive, perpetual, irrevocable, royalty-free, fully paid-up, worldwide license, with the right to sublicense, to use, reproduce, modify, create derivative works from, distribute, publicly display, and publicly perform such Pre-Existing Materials solely as part of or in connection with the Deliverables.

(c) Consultant represents and warrants that it has the right to grant the license in Section 6.5(b) and that such license does not conflict with any agreement with any third party.

6.6 Third-Party Materials. Consultant shall not incorporate any third-party materials, including open source software, into the Deliverables without the prior written consent of Client. If Client consents, Consultant shall identify all such materials and applicable licenses and ensure that the license terms do not conflict with Client's ownership or use of the Deliverables.

6.7 Moral Rights. To the extent permitted by applicable law, Consultant hereby irrevocably waives and agrees not to assert any "moral rights" or equivalent rights that Consultant may have in the Work Product.

6.8 Client Materials. Client retains all right, title, and interest in and to any materials, data, information, trademarks, or other property provided by Client to Consultant for use in connection with the Services. Consultant shall use Client Materials only for the purpose of performing the Services.

6.9 Residual Knowledge. Notwithstanding any other provision of this Agreement, Consultant shall be free to use Residual Knowledge in the conduct of its business. "Residual Knowledge" means general skills, knowledge, experience, ideas, concepts, know-how, and techniques retained in the unaided memory of Consultant's personnel, provided that this Section shall not be construed as a license to use, disclose, or infringe upon any of Client's Confidential Information, trade secrets, or Intellectual Property Rights.

ARTICLE 7: INDEPENDENT CONTRACTOR STATUS

7.1 Independent Contractor Relationship. The relationship between Client and Consultant is that of independent contractor. Nothing in this Agreement shall be construed to create a partnership, joint venture, agency, franchise, or employer-employee relationship between the Parties. Consultant is not an employee, agent, partner, or legal representative of Client for any purpose whatsoever.

7.2 Control and Discretion. Consultant shall have sole control over the manner, means, and methods of performing the Services, including:

(a) The time, place, and method of performance, subject only to the deadlines and specifications set forth in the Statement of Work;

(b) The sequence of tasks and the order of priorities;

(d) The personnel assigned to perform the Services (subject to Client's approval rights in Section 2.5).

Client shall have no right to control or direct the details, manner, or means of Consultant's work, and shall only specify the desired results and outcomes.

7.3 Arizona Independent Contractor Classification. The Parties intend that Consultant qualify as an independent contractor under applicable Arizona law. A.R.S. § 23-902 contains distinct workers' compensation rules that must not be conflated:

(a) Statutory-Employer Rule (§ 23-902(B)): A contractor and the contractor's workers are employees of the original employer for workers' compensation purposes when the original employer retains supervision or control over the contractor's work and that work is a regular, ordinary, or routine part or process of the employer's business.

(b) Independent-Contractor Definition (§ 23-902(C)): A person is an independent contractor when the person is independent in executing the work, is not subject to the business's rule or control, performs a definite job or piece of work, and is subordinate only in achieving the result required by the business's design.

(c) Separate Written-Agreement Presumption (§ 23-902(D)): A dated agreement signed by both Parties may create a rebuttable presumption for workers' compensation purposes if it includes the required no-workers'-compensation disclosure and each of the eight statutory statements concerning exclusivity, licenses, payment method, termination, tools, time of performance, payment name, and separate business operations.

(d) Optional DIBS (§ 23-1601): A Declaration of Independent Business Status is not mandatory. If used, it must be signed and dated by Consultant, contain the four core acknowledgments, include Consultant's acknowledgment of at least six of the ten listed business-independence factors, and acknowledge that its terms apply to Consultant and Consultant's employees and independent contractors. Client must act in a substantially consistent manner. The Parties ☐ have ☐ have not executed a separate DIBS. No filing with the Industrial Commission is required by § 23-1601.

(e) Contract Facts Supporting Independent Status:

Consultant has the right to work for others during the term of this Agreement;
Consultant can realize profit or loss from the engagement;
Consultant furnishes its own tools, equipment, and materials;
Consultant controls its own work schedule and working hours;
Client does not provide training to Consultant on how to perform the Services;
Consultant operates under its own business name and identity;
Consultant maintains its own business location separate from Client;
Consultant provides services to multiple clients;
Consultant is free from Client's control and direction in performing the Services;
The relationship is not permanent but is for a defined project or time period.

The Parties acknowledge that contractual labels do not override the actual relationship or the governing statutory standards.

7.4 No Employee Benefits. Consultant acknowledges and agrees that:

(a) Consultant shall not be entitled to any employee benefits from Client, including but not limited to health, dental, vision, or life insurance; retirement benefits or 401(k) plans; paid vacation, sick leave, or personal time; workers' compensation coverage; unemployment insurance benefits; stock options or equity compensation; or any other fringe benefits provided to Client's employees.

(b) Consultant shall be solely responsible for obtaining and paying for any insurance, benefits, or retirement savings Consultant deems necessary or appropriate.

7.5 Taxes and Withholding.

(a) Client shall not withhold any federal, state, or local income taxes, Social Security taxes (FICA), Medicare taxes, or any other taxes from payments to Consultant.

(b) Consultant shall be solely responsible for the payment of all taxes arising from compensation received under this Agreement, including federal and state income taxes, self-employment taxes, and all other required taxes and contributions.

(c) Consultant shall file all required tax returns and pay all taxes when due, including Arizona income tax returns with the Arizona Department of Revenue.

(d) Consultant shall indemnify and hold harmless Client from any liability for taxes, penalties, or interest arising from Consultant's failure to pay taxes or from any determination that Consultant is an employee of Client.

7.6 No Authority to Bind. Consultant shall have no authority to bind Client to any contract, agreement, commitment, or obligation; make any representation or warranty on behalf of Client; incur any expense or liability on behalf of Client; or act as an agent of Client, without the prior written consent of Client.

7.7 Consultant's Business Expenses. Consultant shall be responsible for all of its own business expenses, including but not limited to office space, utilities, supplies, equipment, software, professional dues, continuing education, business insurance, and similar expenses, except for those expenses that Client has agreed in writing to reimburse.

ARTICLE 8: REPRESENTATIONS AND WARRANTIES

8.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party that:

(a) It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization;

(b) It has the full power, authority, and legal capacity to enter into this Agreement and to perform its obligations hereunder;

(c) The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate, company, or other action;

(d) This Agreement constitutes a valid and binding obligation enforceable in accordance with its terms;

(e) The performance of its obligations under this Agreement will not violate any applicable law, regulation, order, or judgment, or any agreement to which it is a party;

(f) There is no pending or threatened litigation that would materially affect its ability to perform its obligations under this Agreement.

8.2 Consultant's Representations and Warranties. Consultant represents and warrants to Client that:

(a) Qualifications: Consultant and its personnel possess the necessary qualifications, skills, training, experience, expertise, and professional licenses to perform the Services in a professional and competent manner;

(b) Performance Standards: The Services will be performed in compliance with all applicable laws, including the laws of the State of Arizona, and in a timely, professional, and workmanlike manner;

(c) Originality and Non-Infringement: The Work Product and Deliverables will be original works of Consultant, will not infringe any Intellectual Property Rights of any third party, and will be free from any liens or encumbrances;

(d) No Conflicts: The performance of Services does not conflict with any obligation Consultant owes to any third party;

(e) Compliance: Consultant holds all licenses, permits, and registrations required to conduct its business and perform the Services in the State of Arizona;

(f) Personnel: All personnel assigned to perform the Services are legally authorized to work in the United States and possess the qualifications identified in the Statement of Work.

8.3 Warranty Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT.

8.4 Warranty Remedies. If any Services or Deliverables fail to conform to the warranties set forth in this Article 8, Consultant shall, at its own expense and at Client's election: (a) re-perform the non-conforming Services; (b) repair or correct the non-conforming Deliverables; or (c) refund the fees paid for the non-conforming Services or Deliverables. Client must notify Consultant in writing of any warranty claim within [____] days of discovering the non-conformity.

ARTICLE 9: INDEMNIFICATION

9.1 Indemnification by Consultant. Consultant shall indemnify, defend, and hold harmless Client and its officers, directors, employees, agents, Affiliates, successors, and assigns (collectively, "Client Indemnitees") from and against any and all claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and court costs) arising out of or relating to:

(a) Consultant's breach of any representation, warranty, covenant, or obligation under this Agreement;

(b) Consultant's negligence, gross negligence, or willful misconduct in performing the Services;

(d) Any claim arising from Consultant's misclassification as an employee rather than an independent contractor, including any taxes, penalties, interest, and related costs;

(e) Any personal injury or property damage caused by Consultant or its personnel in connection with the Services;

(f) Consultant's violation of any applicable law, regulation, or professional standard.

9.2 Indemnification by Client. Client shall indemnify, defend, and hold harmless Consultant and its officers, directors, employees, agents, Affiliates, successors, and assigns (collectively, "Consultant Indemnitees") from and against any and all claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and court costs) arising out of or relating to:

(a) Client's breach of any representation, warranty, covenant, or obligation under this Agreement;

(b) Client's negligence, gross negligence, or willful misconduct;

(d) Any claims by third parties arising from Client Materials provided to Consultant.

9.3 Indemnification Procedures. The indemnified Party shall: (a) provide prompt written notice of any claim; (b) grant the indemnifying Party sole control of the defense and settlement of such claim; and (c) provide reasonable cooperation and assistance.

9.4 Attorneys' Fees. Pursuant to A.R.S. § 12-341.01, in any contested action arising out of a contract, including this Agreement, the court may award the successful Party reasonable attorneys' fees.

ARTICLE 10: LIMITATION OF LIABILITY

10.1 Limitation on Consequential Damages. EXCEPT FOR BREACHES OF ARTICLE 5 (CONFIDENTIALITY), ARTICLE 6 (INTELLECTUAL PROPERTY), ARTICLE 9 (INDEMNIFICATION), AND CLAIMS ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST PROFITS, LOST REVENUES, LOST BUSINESS OPPORTUNITIES, LOSS OF DATA, LOSS OF GOODWILL, OR COST OF PROCUREMENT OF SUBSTITUTE SERVICES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

10.2 Cap on Liability. EXCEPT FOR BREACHES OF ARTICLE 5 (CONFIDENTIALITY), ARTICLE 6 (INTELLECTUAL PROPERTY), ARTICLE 9 (INDEMNIFICATION), AND CLAIMS ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, THE TOTAL AGGREGATE LIABILITY OF EITHER PARTY TO THE OTHER PARTY UNDER THIS AGREEMENT SHALL NOT EXCEED:

☐ The total fees paid or payable to Consultant under this Agreement during the [____]-month period preceding the claim; or

☐ $[________________]; or

☐ [____] times the total fees paid or payable under the applicable Statement of Work.

10.3 Essential Basis. THE PARTIES ACKNOWLEDGE THAT THE LIMITATIONS SET FORTH IN THIS ARTICLE 10 ARE AN ESSENTIAL BASIS OF THE BARGAIN AND THAT THE PARTIES WOULD NOT HAVE ENTERED INTO THIS AGREEMENT WITHOUT SUCH LIMITATIONS.

ARTICLE 11: INSURANCE

11.1 Required Insurance. Consultant shall, at its own expense, maintain the following insurance coverage throughout the term of this Agreement and for [____] years thereafter:

(a) Commercial General Liability Insurance: With minimum limits of $[________________] per occurrence and $[________________] in the aggregate, covering bodily injury, property damage, personal injury, and advertising injury;

(b) Professional Liability (Errors and Omissions) Insurance: With minimum limits of $[________________] per claim and $[________________] in the aggregate;

(c) Workers' Compensation Insurance: As required by A.R.S. § 23-961 for all Consultant employees performing Services. If Consultant has no employees, Consultant shall provide a written statement to that effect;

(d) Commercial Automobile Liability Insurance: With minimum limits of $[________________] per accident, if Consultant uses automobiles in connection with the Services;

(e) Cyber Liability/Data Breach Insurance: With minimum limits of $[________________] per occurrence (if applicable to the nature of the Services);

(f) Umbrella/Excess Liability Insurance: With minimum limits of $[________________] per occurrence (if required).

11.2 Insurance Requirements. All required insurance policies shall:

(a) Be issued by insurance companies licensed to do business in the State of Arizona with an A.M. Best rating of A- VII or better;

(b) Name Client as an additional insured on the Commercial General Liability and Umbrella policies;

(d) Provide at least thirty (30) days' advance written notice to Client prior to cancellation or material change.

11.3 Certificates of Insurance. Consultant shall provide Client with certificates of insurance evidencing the required coverage upon execution of this Agreement and upon each renewal date thereafter. Consultant shall provide copies of policy endorsements upon request.

ARTICLE 12: DATA PROTECTION AND PRIVACY

12.1 Data Protection Obligations. If Consultant will access, collect, process, store, or transmit any personal information of Client's customers, employees, or other individuals in connection with the Services, Consultant shall:

(a) Comply with all applicable federal, state, and local privacy and data protection laws, including but not limited to Arizona's data breach notification law (A.R.S. § 18-551 et seq.);

(b) Implement and maintain reasonable administrative, technical, and physical safeguards to protect personal information from unauthorized access, use, disclosure, alteration, or destruction;

(d) Not disclose personal information to any third party without Client's prior written consent, except as required by law;

(e) Promptly notify Client of any actual or suspected data security incident or breach.

12.2 Arizona Data Breach Notification (A.R.S. §§ 18-551–18-552). In the event of a security breach involving personal information:

(a) Consultant shall notify Client of the breach within [____] hours of discovery. This contractual deadline does not extend any statutory duty: a data maintainer must notify the owner or licensee as soon as practicable after discovering a breach, and an owner or licensee must make required notifications within forty-five (45) days after determining that a breach occurred;

(b) Under A.R.S. § 18-552, any person that conducts business in Arizona and that owns, maintains, or licenses unencrypted and unredacted computerized personal information must conduct a reasonable investigation promptly after becoming aware of a security incident;

(c) If the investigation determines that a breach has occurred, the owner or licensee must make the notifications required by § 18-552(B) within forty-five (45) days after that determination, subject to the statute's law-enforcement-delay provision;

(d) If notification is required for more than 1,000 individuals, notice must also be provided to the three largest nationwide consumer reporting agencies, the Arizona Attorney General, and the Director of the Arizona Department of Homeland Security;

(e) "Personal information" includes an individual's first name or first initial and last name combined with a specified data element, or online-account credentials consisting of a username or email address combined with a password or security question and answer. Specified data elements include a Social Security number; driver license or state identification number; private electronic-signature key; financial account, credit-card, or debit-card number with required access credentials; health-insurance identification number; medical or mental-health information; passport number; taxpayer or IRS identity-protection number; and unique biometric authentication data;

(f) A knowing and willful violation is an unlawful practice under A.R.S. § 44-1522. The Attorney General may impose a civil penalty not exceeding the lesser of $10,000 per affected individual or the total economic loss sustained by affected individuals, subject to a $500,000 maximum for a breach or series of related breaches, and may also recover restitution;

(g) Consultant shall cooperate fully with Client in investigating and responding to any data breach, including providing all information necessary for Client to comply with its own notification obligations.

12.3 Data Security Standards. Consultant shall maintain data security standards that meet or exceed industry best practices, including:

(a) Encryption of personal information in transit and at rest;

(b) Access controls limiting data access to authorized personnel;

(d) Employee training on data security and privacy practices;

(e) Incident response and disaster recovery plans.

12.4 Return or Destruction of Data. Upon termination or expiration of this Agreement, or upon Client's written request, Consultant shall securely return or destroy all personal information in its possession or control, and certify in writing that it has done so.

ARTICLE 13: NON-COMPETITION AND NON-SOLICITATION

13.1 Non-Competition. During the term of this Agreement and for a period of [____] months after its termination or expiration, Consultant shall not, directly or indirectly:

☐ Provide services substantially similar to the Services to any competitor of Client within a [____]-mile radius of Client's principal place of business or within the following geographic area: [________________________________]; or

☐ Engage in any business that directly competes with Client's business as described in Exhibit A.

Arizona Non-Compete Law Note: Arizona courts examine whether a restraint is broader than necessary to protect a legitimate interest and whether that interest is outweighed by hardship to the restrained party or likely injury to the public. Duration and geographic area must be tailored to the protectable interest, and the restricted activity must be no broader than necessary. No fixed duration or mileage radius is automatically valid. Valley Medical Specialists v. Farber, 194 Ariz. 363 (1999).

13.2 Non-Solicitation of Clients. During the term of this Agreement and for a period of [____] months after its termination or expiration, Consultant shall not, directly or indirectly, solicit, divert, or attempt to solicit or divert any client, customer, or account of Client with whom Consultant had contact or about whom Consultant received Confidential Information during the term of this Agreement.

13.3 Non-Solicitation of Personnel. During the term of this Agreement and for a period of [____] months after its termination or expiration, neither Party shall directly or indirectly solicit, recruit, or hire any employee, contractor, or agent of the other Party who was involved in the performance or management of the Services, without the prior written consent of the other Party.

13.4 Severability Under Arizona's Blue-Pencil Rule. If a court determines that a restriction in this Article 13 is unenforceable, the court may disregard a grammatically severable provision when the Agreement itself makes severability evident. The Parties do not authorize or request the court to add terms or rewrite a restriction; Arizona's blue-pencil rule does not permit judicial creation of a new covenant. Valley Medical Specialists v. Farber, 194 Ariz. 363 (1999).

13.5 Acknowledgments. Consultant acknowledges that:

(a) The restrictions in this Article 13 are reasonable and necessary to protect Client's legitimate business interests;

(b) Consultant has received adequate consideration for these restrictions;

(d) Client would suffer irreparable harm if Consultant violated these restrictions.

ARTICLE 14: DISPUTE RESOLUTION

14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Arizona, without regard to its conflict-of-laws principles.

14.2 Informal Resolution. Prior to initiating formal dispute resolution, the Parties shall attempt to resolve any dispute arising under this Agreement through good faith negotiation. Either Party may initiate the negotiation process by providing written notice to the other Party describing the dispute. The Parties shall meet (in person or by telephone) within [____] Business Days of such notice and engage in good faith negotiations for a period of at least [____] days.

14.3 Mediation. If the Parties are unable to resolve the dispute through negotiation, either Party may initiate mediation by providing written notice to the other Party. Mediation shall be conducted:

(a) In [________________], Arizona;

(b) Before a single mediator mutually agreed upon by the Parties, or if the Parties cannot agree, selected by the American Arbitration Association (AAA);

(d) Each Party shall bear its own costs of mediation, and the costs of the mediator shall be shared equally.

14.4 Arbitration / Litigation. If the dispute is not resolved through mediation within [____] days:

☐ Arbitration: The dispute shall be resolved by binding arbitration administered by the AAA in accordance with its Commercial Arbitration Rules, conducted in [________________], Arizona, before a single arbitrator. The arbitrator's decision shall be final and binding, and judgment upon the award may be entered in any court having jurisdiction thereof. The arbitrator shall have the authority to award any remedy available under Arizona law. Each Party shall bear its own attorneys' fees unless the arbitrator awards fees under applicable law, the arbitration rules, or this Agreement.

☐ Litigation: Either Party may bring suit in the state or federal courts located in Maricopa County, Arizona. Each Party hereby irrevocably consents to the exclusive jurisdiction and venue of such courts.

14.5 Injunctive and Equitable Relief. Notwithstanding the foregoing, either Party may seek injunctive relief, specific performance, or other equitable remedies from any court of competent jurisdiction at any time to prevent irreparable harm, without first complying with the negotiation or mediation procedures.

14.6 Successful Party Attorneys' Fees. Pursuant to A.R.S. § 12-341.01, in any contested action arising out of this Agreement, the court may award the successful Party reasonable attorneys' fees.

14.7 Jury Waiver. TO THE FULLEST EXTENT PERMITTED BY ARIZONA LAW, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

ARTICLE 15: GENERAL PROVISIONS

15.1 Entire Agreement. This Agreement, together with all Exhibits, Statements of Work, and Change Orders, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, representations, and warranties, whether oral or written.

15.2 Amendments. This Agreement may not be amended, modified, or supplemented except by a written instrument signed by authorized representatives of both Parties.

15.3 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party granting the waiver. No failure or delay by either Party in exercising any right or remedy shall constitute a waiver thereof.

15.4 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable, that provision shall be severed if it is capable of severance, and the remaining provisions shall continue in full force and effect. Nothing in this Section authorizes a court to add terms or rewrite a restrictive covenant contrary to Arizona law.

15.5 Assignment. Neither Party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign this Agreement to a successor in connection with a merger, acquisition, or sale of all or substantially all of its assets, upon written notice to the other Party.

15.6 Notices. All notices required or permitted under this Agreement shall be in writing and shall be deemed given when:

(a) Delivered personally;

(b) Sent by certified or registered mail, return receipt requested, postage prepaid;

(d) Sent by email with confirmation of receipt;

to the addresses set forth above or to such other address as a Party may designate by written notice.

15.7 Force Majeure. Neither Party shall be liable for any failure or delay in performing its obligations under this Agreement to the extent such failure or delay results from circumstances beyond the Party's reasonable control, including but not limited to acts of God, natural disasters, war, terrorism, riots, embargoes, acts of civil or military authorities, fire, floods, accidents, epidemics, pandemics, strikes, or shortages of transportation, facilities, fuel, energy, labor, or materials.

15.8 Independent Parties. This Agreement does not create any agency, partnership, joint venture, franchise, or employment relationship between the Parties.

15.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

15.10 Electronic Signatures. Pursuant to A.R.S. § 44-7007, a record, signature, or contract may not be denied legal effect solely because it is electronic, and an electronic signature satisfies a law requiring a signature. This Agreement may be executed and delivered by electronic means.

15.11 Headings. The headings in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

15.12 Construction. This Agreement shall be construed without regard to any presumption or rule requiring construction against the Party causing the Agreement to be drafted.

15.13 Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns. Nothing in this Agreement shall confer any rights upon any third party.

15.14 Cumulative Remedies. All remedies available under this Agreement are cumulative and in addition to every other remedy available at law or in equity.

ARTICLE 16: ARIZONA-SPECIFIC PROVISIONS

16.1 Arizona Independent Contractor Classification Standards.

(a) Statutory-Employer Rule (§ 23-902(B)): When an employer retains supervision or control over a contractor's work and the work is a regular, ordinary, or routine part or process of the employer's business, the contractor, the contractor's workers, and covered subcontractors are employees of the original employer for purposes of the workers' compensation chapter.

(b) Independent-Contractor Definition (§ 23-902(C)): A person is an independent contractor when independent in executing the work, not subject to the business's rule or control, engaged for a definite job or piece of work, and subordinate only in achieving the result required by the business's design.

(c) Workers' Compensation Agreement Presumption (§ 23-902(D)): This is a separate, optional written-agreement route. A qualifying agreement must be dated and signed by both Parties, state that Consultant is not entitled to workers' compensation benefits from Client, and contain all eight statutory statements. If properly executed, it creates a rebuttable presumption for workers' compensation purposes.

(d) Declaration of Independent Business Status (§ 23-1601): A DIBS is also optional and is distinct from the § 23-902(D) agreement. It must be signed and dated by Consultant, contain the four core acknowledgments, include at least six of the statute's ten listed factors, and acknowledge that its terms apply to Consultant and Consultant's employees and independent contractors. Client must act substantially consistently with the declaration for the rebuttable presumption to apply. The statute does not require filing with the Industrial Commission.

(e) Relevant State Agencies:

Industrial Commission of Arizona (ICA): 800 W. Washington St., Phoenix, AZ 85007; (602) 542-4661
Arizona Department of Economic Security (DES): (602) 542-3667
Arizona Department of Revenue: (602) 255-3381

16.2 Arizona Non-Compete Enforceability.

(a) Arizona applies a reasonableness analysis to restrictive covenants. The party seeking enforcement bears the burden of showing that the restraint is no greater than necessary to protect a legitimate interest and that the interest is not outweighed by hardship to the restrained party or likely injury to the public.

(b) Scope of the Restraint: Duration, geographic area, and restricted activity must be tailored to the interest actually requiring protection. Arizona law does not establish an automatic safe harbor based on a fixed number of months, years, or miles.

(c) Legitimate Business Interests: A restriction should identify and protect a concrete interest, such as qualifying confidential information, trade secrets, or customer relationships, without extending beyond what is necessary for that purpose.

(d) Blue-Pencil Doctrine: A court may eliminate grammatically severable, unreasonable language when severability is evident from the agreement. It may not add terms or rewrite a restriction to create a different covenant. Valley Medical Specialists v. Farber, 194 Ariz. 363 (1999).

16.3 Arizona Uniform Trade Secrets Act (AUTSA) (A.R.S. § 44-401 et seq.).

(a) AUTSA provides civil remedies for trade secret misappropriation, including injunctive relief (A.R.S. § 44-402), actual-loss and unjust-enrichment damages or a reasonable royalty (A.R.S. § 44-403(A)), and exemplary damages up to twice the award made under § 44-403(A) for willful and malicious misappropriation (A.R.S. § 44-403(B)).

(b) The statute of limitations for AUTSA claims is three (3) years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered; a continuing misappropriation is a single claim (A.R.S. § 44-406).

(c) AUTSA does not displace common-law claims based on alleged misappropriation of confidential information that does not qualify as a trade secret. Orca Communications Unlimited, LLC v. Noder, 236 Ariz. 180 (2014).

(d) A court may award reasonable attorney fees in the circumstances listed in A.R.S. § 44-404, including willful and malicious misappropriation and specified bad-faith conduct.

(e) The federal Defend Trade Secrets Act, 18 U.S.C. § 1836(b), provides a private civil action when the trade secret relates to a product or service used in, or intended for use in, interstate or foreign commerce.

16.4 Arizona Data Breach Notification Law (A.R.S. § 18-551 et seq.).

(a) Any person conducting business in Arizona that owns, maintains, or licenses unencrypted and unredacted computerized personal information must investigate promptly upon becoming aware of a security incident.

(b) After determining that a breach occurred, the owner or licensee must make the required notifications within forty-five (45) days, subject to the statutory law-enforcement-delay provision. A data maintainer must notify the owner or licensee as soon as practicable after discovering a breach.

(c) If notification is required for more than 1,000 individuals, the entity must also notify the three largest nationwide consumer reporting agencies, the Arizona Attorney General, and the Director of the Arizona Department of Homeland Security.

(d) Personal information includes name-plus-data-element combinations and online-account credentials. The specified data elements include Social Security, driver-license or state-ID, private-key, protected financial-account, health-insurance, medical or mental-health, passport, taxpayer/IRS identity-protection, and biometric-authentication information.

(e) A knowing and willful violation is an unlawful practice under A.R.S. § 44-1522. The Attorney General may impose a civil penalty up to the lesser of $10,000 per affected individual or total affected-individual economic loss, capped at $500,000 for a breach or series of related breaches, and may recover restitution.

(f) Arizona Attorney General - Consumer Protection Division: 2005 N. Central Ave., Phoenix, AZ 85004; (602) 542-5025; www.azag.gov

16.5 Arizona Interest Rate and Late Payment Provisions.

(a) Default Rate for This Consulting Obligation: For a non-medical loan, indebtedness, or obligation, A.R.S. § 44-1201(A)(2) sets a 10% annual rate unless a different rate is contracted for in writing.

(b) Contractual Rates: For a non-medical loan, indebtedness, or obligation, the written contract may specify a different rate, and § 44-1201(A)(2) permits any agreed written rate.

(c) Contract-Based Judgment Interest: A judgment based on a written agreement bearing a lawful interest rate uses the agreement's rate, which must be stated in the judgment.

(d) Other Judgment Interest: Unless another statute or written contract supplies the rate, a non-medical-debt judgment bears the lesser of 10% or one percentage point above the published prime rate; the rate is fixed when judgment is entered.

16.6 Arizona Workers' Compensation (A.R.S. §§ 23-961 and 23-907).

(a) An employer subject to Arizona's workers' compensation chapter must secure compensation by authorized insurance or approved self-insurance under A.R.S. § 23-961.

(b) If Consultant employs any persons, Consultant must maintain workers' compensation insurance for those employees as required by Arizona law.

(c) An employer that fails to secure required coverage may lose statutory defenses, face claims or Special Fund liability, and incur the civil penalties and other consequences provided by A.R.S. § 23-907. This Agreement does not characterize every failure to insure as a felony; A.R.S. § 23-932 is a residual criminal provision that applies only when its elements are met and no other penalty or punishment is specifically provided.

16.7 Arizona Electronic Transactions Act (A.R.S. § 44-7007). A record, signature, or contract may not be denied legal effect and enforceability solely because it is electronic. An electronic record satisfies a writing requirement, and an electronic signature satisfies a signature requirement.

16.8 Contractual Payment Timelines. The Parties agree that the payment deadlines and remedies stated in Article 4 govern this private consulting engagement, subject to applicable law.

SOURCES AND REFERENCES

Official sources verified July 23, 2026:

EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Consulting Services Agreement as of the Effective Date.

CLIENT:

Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONSULTANT:

Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

EXHIBIT A: STATEMENT OF WORK (SOW)

SOW Number: [________]
SOW Effective Date: [__/__/____]
Reference Agreement: Consulting Services Agreement dated [__/__/____]

A.1 Project Description

[________________________________]
[________________________________]
[________________________________]

A.2 Scope of Services

The Consultant shall provide the following Services:

[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]

A.3 Deliverables

#	Deliverable	Description	Due Date	Acceptance Criteria
1	[____________]	[________________________________]	[__/__/____]	[________________________________]
2	[____________]	[________________________________]	[__/__/____]	[________________________________]
3	[____________]	[________________________________]	[__/__/____]	[________________________________]
4	[____________]	[________________________________]	[__/__/____]	[________________________________]
5	[____________]	[________________________________]	[__/__/____]	[________________________________]

A.4 Timeline and Milestones

Milestone	Description	Target Date
Project Kickoff	[________________________________]	[__/__/____]
Phase 1 Completion	[________________________________]	[__/__/____]
Phase 2 Completion	[________________________________]	[__/__/____]
Final Delivery	[________________________________]	[__/__/____]
Project Closeout	[________________________________]	[__/__/____]

A.5 Compensation

☐ Fixed Fee: $[________________]
☐ Hourly Rate: $[________] per hour (estimated [____] hours; NTE $[________________])
☐ Monthly Retainer: $[________] per month
☐ Milestone-Based: Per milestone payment schedule above

Payment Schedule:
| Payment # | Amount | Trigger/Due Date |
|-----------|--------|------------------|
| 1 | $[________] | [________________________________] |
| 2 | $[________] | [________________________________] |
| 3 | $[________] | [________________________________] |
| 4 | $[________] | [________________________________] |

A.6 Key Personnel

Role	Name	Hourly Rate (if applicable)
Lead Consultant	[________________________________]	$[________]
Supporting Consultant	[________________________________]	$[________]
Project Manager	[________________________________]	$[________]

A.7 Client Responsibilities

[________________________________]
[________________________________]
[________________________________]

A.8 Assumptions and Constraints

[________________________________]
[________________________________]
[________________________________]

A.9 Acceptance Procedures

Client shall review each Deliverable within [____] Business Days of receipt. Client shall either accept the Deliverable or provide written notice of rejection with specific reasons. Consultant shall correct rejected Deliverables within [____] Business Days.

A.10 SOW Term

This SOW shall commence on [__/__/____] and shall continue until [__/__/____], unless earlier terminated in accordance with the Agreement.

SOW ACCEPTED AND AGREED:

CLIENT:
Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONSULTANT:
Signature: ___________________________________
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

EXHIBIT B: PRE-EXISTING MATERIALS (IF APPLICABLE)

The following Pre-Existing Materials of Consultant may be incorporated into the Deliverables and are subject to the license grant in Section 6.5:

#	Description	Ownership	License Terms
1	[________________________________]	Consultant	Per Section 6.5
2	[________________________________]	Consultant	Per Section 6.5
3	[________________________________]	Consultant	Per Section 6.5

☐ No Pre-Existing Materials will be incorporated into the Deliverables.

AGREEMENT COMPLETION CHECKLIST

☐ All bracketed fields completed with specific information
☐ Appropriate checkboxes selected throughout the Agreement
☐ Statement of Work (Exhibit A) fully completed and attached
☐ Pre-Existing Materials (Exhibit B) listed or marked as not applicable
☐ IRS Form W-9 obtained from Consultant
☐ Declaration of Independent Business Status (DIBS) executed (if applicable)
☐ Certificates of insurance obtained from Consultant
☐ Both Parties have signed the Agreement and all Exhibits
☐ Arizona-licensed attorney has reviewed and approved the Agreement
☐ Copy of executed Agreement provided to both Parties
☐ Calendar reminders set for renewal/termination notice deadlines

DISCLAIMER: This template is provided for informational purposes only and does not constitute legal advice. It is designed as a starting point for a Consulting Services Agreement governed by Arizona law. This document must be reviewed, customized, and approved by a qualified attorney licensed in the State of Arizona before execution. Laws and regulations change frequently; all statutory citations should be verified for currency before use. Neither the author nor the distributor of this template assumes any liability for its use.

Last Updated: 2026-07-23
Jurisdiction: Arizona
Template Version: 2.0

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Hi! Want this done for you? Tell me your situation and I'll fill in every section and tailor it to your state.

You get the finished Word & PDF in about 5 minutes. $99 one time for this document, or $249/mo for access to every document and every Ezel app. Want me to start?

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About This Template

A contract is a written record of what two or more parties agreed to and what happens if someone does not follow through. Clear language, defined terms, and clean signature blocks keep disputes small and enforceable. The most common mistakes in contracts come from vague promises, missing details about timing or payment, and skipping standard protective clauses like governing law and dispute resolution.

Important Notice

This template is provided for informational purposes. It is not legal advice. We recommend having an attorney review any legal document before signing, especially for high-value or complex matters.

Last updated: July 2026

Get your Consulting Services Agreement, done and ready to use

Fill it in for your situation, adjust it for your state, and download the finished Word and PDF. Let the AI do it in about 5 minutes, or finish it yourself in the editor. $99 one time, or go Pro for access to every document and every Ezel app.

Consulting Services Agreement