Consulting Services Agreement

CONSULTING SERVICES AGREEMENT

State of Illinois

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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: [________________________________]

(hereinafter referred to as "Consultant")

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

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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:

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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 "Biometric Data" means biometric identifiers and biometric information as defined under the Illinois Biometric Information Privacy Act (BIPA), 740 ILCS 14/10, including retina or iris scans, fingerprints, voiceprints, scans of hand or face geometry, and any information derived therefrom.

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

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

1.5 "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 Illinois Trade Secrets Act, 765 ILCS 1065/2.

1.6 "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.

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

1.8 "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, anywhere in the world.

1.9 "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 outside the scope of this Agreement.

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

1.11 "Statement of Work" or "SOW" means the document attached hereto as Exhibit A, and any subsequent statements of work, describing the specific Services, Deliverables, timelines, milestones, acceptance criteria, and fees.

1.12 "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, or reduced to practice by Consultant in connection with the Services.

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ARTICLE 2: SCOPE OF SERVICES

2.1 Engagement. Client hereby engages Consultant to perform the Services described in the Statement of Work. The Parties may execute additional Statements of Work, each subject to 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 in Consultant's industry or profession;

(c) In accordance with the specifications and timelines in the applicable SOW;

(d) Using qualified personnel with appropriate skills and experience;

(e) In compliance with all applicable federal, state, and local laws, including Illinois law; and

(f) Free from material defects and errors.

2.3 Service Deliverables. Consultant shall provide Deliverables as specified in each SOW in accordance with the delivery schedule and acceptance criteria therein.

2.4 Additional Services. No additional services shall be performed unless documented in a written amendment or new SOW signed by both Parties.

2.5 Consultant Personnel.

(a) Consultant shall assign qualified personnel. Key personnel shall not be replaced without Client's prior written consent.

(b) Client may request replacement of unsatisfactory personnel at no additional cost.

(c) Consultant may engage subcontractors with Client's prior written consent, provided subcontractors are bound by equivalent confidentiality, IP, and BIPA provisions.

2.6 Client Cooperation. Client shall provide reasonable access to personnel, facilities, systems, information, and resources as necessary.

2.7 Change Orders. No change shall be effective unless documented in a signed Change Order.

2.8 Project Management. Consultant shall provide regular status reports and promptly notify Client of any issues.

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ARTICLE 3: TERM AND TERMINATION

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

☐ No Automatic Renewal: Expires at end of Initial Term unless extended in writing.

☐ Automatic Renewal: Automatically renews for successive [________________] periods, unless either Party provides [____] days' written notice.

3.2 SOW Term. Each SOW has its own term. Expiration of a SOW does not affect this Agreement.

3.3 Termination for Convenience. Either Party may terminate upon [____] days' prior written notice. Client shall pay for Services performed and non-cancelable expenses incurred.

3.4 Termination for Cause. Either Party may terminate immediately if:

(a) The other Party materially breaches and fails to cure within [____] days of notice;

(b) The breach cannot be cured;

(c) The other Party becomes insolvent or files for bankruptcy; or

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

3.5 Termination for Non-Payment. Consultant may terminate upon [____] days' notice if Client fails to pay undisputed amounts for [____] days after notice.

3.6 Effect of Termination. Upon termination:

(a) Consultant shall cease and deliver all Work Product within [____] days;

(b) Client shall pay for Services performed;

(c) Each Party shall return or destroy Confidential Information;

(d) Surviving provisions: Articles 1, 5, 6, 8, 9, 10, and 13.

3.7 Transition Assistance. Upon request and at Client's expense, Consultant shall provide transition assistance for up to [____] days.

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ARTICLE 4: COMPENSATION AND PAYMENT TERMS

4.1 Fee Structure. (Check all that apply):

☐ Fixed Fee: $[________________], payable: [________________________________].

☐ Hourly Rate:

• Senior Consultant/Principal: $[________] per hour
• Consultant: $[________] per hour
• Associate/Analyst: $[________] per hour
• Not-to-Exceed: $[________________]

☐ Daily Rate: $[________] per day (minimum [____] hours).

☐ Monthly Retainer: $[________] per month for up to [____] hours. Additional: $[________] per hour. Unused hours ☐ shall ☐ shall not roll over.

☐ Milestone-Based: Per SOW milestones.

☐ Value-Based/Success Fee: [________________________________].

☐ Blended Rate: $[________] per hour.

4.2 Rate Adjustments.

(a) Rates fixed during the Initial Term.

(b) For Renewal Terms, Consultant may increase by up to [____]% upon [____] days' notice.

4.3 Expenses and Reimbursement.

(a) Client shall reimburse pre-approved expenses including travel, lodging, meals, and materials.

(b) Approval Thresholds: Under $[________]: no pre-approval; over $[________]: prior approval; monthly cap: $[________].

(c) Itemized receipts required for expenses exceeding $[____].

4.4 Invoicing. Invoices submitted:
☐ Monthly, by the [____] day of the following month
☐ Bi-weekly
☐ Upon milestone completion
☐ Other: [________________________________]

Illinois Freelance Worker Protection Act Compliance (820 ILCS 192/). If this Agreement constitutes a "freelance contract" under 820 ILCS 192/ (services valued at $500 or more), Client shall pay Consultant no later than thirty (30) days after the completion of the Services under each SOW, or by any earlier date specified in this Agreement.

Invoices submitted to:
Contact: [________________________________]
Email: [________________________________]
Address: [________________________________]

4.5 Payment Terms. Client shall pay undisputed amounts within [____] days of invoice receipt.

Payments by:
☐ Check
☐ ACH/Electronic Transfer
☐ Wire Transfer
☐ Other: [________________________________]

4.6 Late Payment Interest. Pursuant to the Illinois Interest Act, 815 ILCS 205/2, any amounts not paid when due shall bear interest at the rate of:

☐ Five percent (5%) per annum (Illinois statutory default rate under 815 ILCS 205/2); or

☐ [____]% per annum as agreed in writing (Illinois permits parties to agree in writing to a rate not exceeding 9% per annum for commercial obligations under 815 ILCS 205/4, unless a higher rate is permitted under specific exceptions); or

☐ The applicable judgment interest rate as provided by 735 ILCS 5/2-1303

from the due date until paid in full.

4.7 Disputed Invoices. Client shall notify Consultant within [____] days and pay undisputed amounts. Disputes resolved within thirty (30) days.

4.8 Taxes.

(a) Consultant shall be solely responsible for all federal, state, and local taxes.

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

(c) Consultant shall provide a completed IRS Form W-9.

(d) Client shall issue IRS Form 1099 as required.

(e) Illinois Replacement Tax. If Consultant is organized as a corporation, S corporation, or partnership conducting business in Illinois, Consultant acknowledges its obligation to pay the Illinois Personal Property Replacement Tax under 35 ILCS 5/201(c) and (d) (currently 2.5% for corporations and 1.5% for partnerships, S corporations, and trusts — verify current rates).

(f) Illinois does not impose sales tax on most professional consulting services; however, if the Services involve the transfer of tangible personal property or certain specified services, sales tax may apply.

4.9 Records and Audit. Consultant shall maintain records for [____] years. Client may audit upon [____] Business Days' notice.

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ARTICLE 5: CONFIDENTIALITY AND TRADE SECRETS

5.1 Confidentiality Obligations. Each Receiving Party agrees to hold in strict confidence, not disclose, and not use for unauthorized purposes all Confidential Information.

5.2 Protective Measures. The Receiving Party shall use at least the same degree of care as for its own confidential information, but not less than reasonable care.

5.3 Exclusions. Obligations do not apply to information that is publicly available, previously known, received from a third party without restriction, independently developed, or approved for release.

5.4 Required Disclosure. If compelled by law, the Receiving Party shall provide prompt notice and disclose only the minimum required.

5.5 Trade Secrets Under Illinois Law (ITSA). The Parties acknowledge that certain Confidential Information may constitute "trade secrets" under the Illinois Trade Secrets Act, 765 ILCS 1065/2:

(a) A "trade secret" means information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers, that: (i) is sufficiently secret to derive economic value, actual or potential, from not being generally known to 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 (765 ILCS 1065/2(d));

(b) The ITSA provides for injunctive relief (765 ILCS 1065/3), damages including actual loss and unjust enrichment (765 ILCS 1065/4), and exemplary damages up to twice the compensatory award for willful and malicious misappropriation;

(c) Attorney's fees may be awarded where misappropriation was willful and malicious or where a claim was brought in bad faith (765 ILCS 1065/5);

(d) The statute of limitations is five (5) years from the date of discovery (765 ILCS 1065/7);

(e) The ITSA supersedes conflicting tort, restitutionary, and other state law remedies for trade secret misappropriation (765 ILCS 1065/8);

(f) The confidentiality obligations for trade secrets shall continue for as long as such information retains trade secret status.

5.6 Return or Destruction. Upon termination, the Receiving Party shall return or destroy Confidential Information and certify compliance.

5.7 Injunctive Relief. Breach may cause irreparable harm; the non-breaching Party may seek injunctive relief without proving actual damages.

5.8 Duration. Confidentiality obligations survive for [____] years; trade secrets remain protected indefinitely.

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ARTICLE 6: INTELLECTUAL PROPERTY AND WORK PRODUCT

6.1 Ownership. All Work Product shall be Client's sole property. Consultant irrevocably assigns all rights to Client.

6.2 Work Made for Hire. Work Product constituting a "work made for hire" under 17 U.S.C. § 101 is owned by Client. All other Work Product is assigned.

6.3 Assignment of Inventions. Consultant assigns all inventions conceived in connection with the Services or using Client's Confidential Information.

6.4 Further Assurances. Consultant shall execute documents, cooperate in IP prosecution, and grants Client an irrevocable power of attorney for such purposes.

6.5 Pre-Existing Materials. Consultant retains rights; grants Client a non-exclusive, perpetual, royalty-free license for Pre-Existing Materials incorporated into Deliverables.

6.6 Third-Party Materials. No incorporation without Client's prior written consent.

6.7 Moral Rights. Waived to the extent permitted by law.

6.8 Client Materials. Client retains all rights. Consultant uses only for Services.

6.9 Residual Knowledge. Consultant may use general skills and knowledge retained in unaided memory, but not Confidential Information or trade secrets.

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ARTICLE 7: INDEPENDENT CONTRACTOR STATUS

7.1 Independent Contractor Relationship. The relationship is that of independent contractor. Nothing herein creates an employment, partnership, joint venture, or agency relationship.

7.2 Control and Discretion. Consultant controls the manner, means, and methods of performing the Services.

7.3 Illinois Independent Contractor Classification. The Parties intend Consultant to be classified as an independent contractor under Illinois law. Illinois uses different tests depending on the statutory context:

(a) ABC Test (Unemployment Insurance — 820 ILCS 405/212): Under the Illinois Unemployment Insurance Act, services are deemed employment unless the employer demonstrates:

• Factor A — Freedom from Control: The individual has been and will continue to be free from control or direction over the performance of the services, both under the contract and in fact;
• Factor B — Outside Usual Course or Place of Business: The service is either (i) outside the usual course of business for which such service is performed, or (ii) performed outside all the places of business of the enterprise;
• Factor C — Independent Business: The individual is engaged in an independently established trade, occupation, profession, or business;

(b) Illinois Employee Classification Act (820 ILCS 185/). This Act targets the construction industry primarily but reflects Illinois's strong public policy against misclassification. Under the Act:

• A contractor who knowingly misclassifies an employee as an independent contractor commits a violation;
• Penalties include fines up to $1,500 per violation for first offenses and up to $2,500 for subsequent violations;

(c) Common Law Control Test (Workers' Compensation — 820 ILCS 305/). For workers' compensation purposes, Illinois applies a multi-factor test examining:

• The right to control the manner and means of performance;
• The right to discharge;
• Whether the worker furnishes own tools;
• The method of payment;
• Whether the work is part of the employer's regular business;

(d) Additional Factors Supporting Independent Contractor Status:

• Consultant has the right to work for others;
• Consultant furnishes own tools and equipment;
• Consultant controls work schedule;
• Consultant is not provided training by Client;
• Consultant operates under its own business name;
• Consultant has significant investment in its business;
• Consultant bears risk of profit or loss.

7.4 No Employee Benefits. Consultant is not entitled to employee benefits, including health insurance, retirement plans, paid leave, workers' compensation, unemployment insurance, or any fringe benefits.

7.5 Taxes and Withholding.

(a) Client shall not withhold any taxes from payments.

(b) Consultant is solely responsible for all federal and Illinois state income taxes, self-employment taxes, and all other applicable taxes, including any Illinois Replacement Tax obligations.

(c) Consultant shall indemnify Client from any liability arising from a determination that Consultant is an employee.

7.6 No Authority to Bind. Consultant has no authority to bind Client without prior written consent.

7.7 Business Expenses. Consultant is responsible for all business expenses except those Client agrees to reimburse.

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ARTICLE 8: REPRESENTATIONS AND WARRANTIES

8.1 Mutual Representations. Each Party represents that it is duly organized, has full authority, and that performance will not violate any law or agreement.

8.2 Consultant's Representations. Consultant represents and warrants:

(a) Qualifications: Necessary qualifications, skills, and licenses;

(b) Performance: Professional performance in compliance with Illinois law;

(c) Originality: Work Product will be original and non-infringing;

(d) Compliance: All required Illinois licenses and registrations held;

(e) Non-Compete Compliance: Consultant is not subject to any non-compete or restrictive covenant that would prevent performance of the Services;

(f) No Conflicts: No conflict with third-party obligations;

(g) Personnel: All personnel legally authorized to work in the US;

(h) No Viruses: Software free from malicious code;

(i) BIPA Compliance: If Services involve biometric data, Consultant shall comply with BIPA;

(j) Warranty Period: Deliverables will conform for [____] days after acceptance.

8.3 Client's Representations. Client has authority to provide access and materials; Client Materials are non-infringing.

8.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY WARRANTY, EXPRESS, IMPLIED, OR STATUTORY.

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ARTICLE 9: INDEMNIFICATION

9.1 By Consultant. Consultant shall indemnify Client Indemnitees from all Losses arising from: (a) breach of representations or obligations; (b) negligence or wrongful acts; (c) IP infringement; (d) legal non-compliance; (e) misclassification claims; (f) personal injury or property damage; (g) breach of confidentiality; (h) BIPA violations attributable to Consultant.

9.2 By Client. Client shall indemnify Consultant Indemnitees from all Losses arising from: (a) breach of representations; (b) negligent or wrongful acts; (c) Client Materials infringement; (d) unauthorized use of Work Product.

9.3 Procedures. Prompt notice; Indemnifying Party controls defense; reasonable cooperation required.

9.4 IP Remedies. If Deliverables face infringement claims, Consultant shall at its expense: (a) procure continued use; (b) replace; or (c) modify.

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ARTICLE 10: LIMITATION OF LIABILITY

10.1 Consequential Damages. EXCEPT FOR BREACHES OF ARTICLES 5 OR 6, INDEMNIFICATION, IP INFRINGEMENT, BIPA VIOLATIONS, FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES.

10.2 Cap on Liability. EXCEPT FOR THE EXCLUSIONS IN SECTION 10.1, TOTAL LIABILITY SHALL NOT EXCEED:

☐ Option A: Fees paid in the twelve (12) months preceding the claim; or
☐ Option B: Fees under the applicable SOW; or
☐ Option C: $[________________]; or
☐ Option D: [____] times the applicable SOW fees.

10.3 BIPA Liability. THE PARTIES ACKNOWLEDGE THAT BIPA (740 ILCS 14/) PROVIDES FOR LIQUIDATED DAMAGES OF $1,000 PER NEGLIGENT VIOLATION AND $5,000 PER INTENTIONAL OR RECKLESS VIOLATION (AS AMENDED). BIPA LIABILITY SHALL NOT BE SUBJECT TO THE CAP IN SECTION 10.2.

10.4 Essential Basis. THE LIMITATIONS REFLECT A FAIR ALLOCATION OF RISK AND AN ESSENTIAL BASIS OF THE BARGAIN.

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ARTICLE 11: INSURANCE REQUIREMENTS

11.1 Insurance Coverage. Consultant shall maintain at its expense:

(a) Commercial General Liability: Per Occurrence: $[________________]; Aggregate: $[________________]

(b) Professional Liability (E&O): Per Claim: $[________________]; Aggregate: $[________________]

(c) Workers' Compensation: As required by 820 ILCS 305/1 et seq. if Consultant has employees; Employers' Liability: $[________________] per accident

(d) Business Auto Liability (if applicable): $[________________] combined single limit

(e) Cyber Liability (if applicable): Per Claim: $[________________] — coverage should include BIPA claims if Services involve biometric data

11.2 Additional Insured. Client shall be named as additional insured on CGL policies.

11.3 Certificates. Consultant shall provide certificates upon request.

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ARTICLE 12: RESTRICTIVE COVENANTS

12.1 Applicability.

☐ Restrictive Covenants Apply

IMPORTANT — ILLINOIS FREEDOM TO WORK ACT NOTICE (820 ILCS 90/): Before agreeing to any restrictive covenant, Consultant should carefully review Article 16 of this Agreement, which describes the restrictions Illinois imposes on non-compete and non-solicitation agreements. The Illinois Freedom to Work Act imposes minimum earnings thresholds, notice requirements, and other conditions that must be satisfied for such covenants to be enforceable.

12.2 Non-Solicitation of Employees. During the term and for [________________] following termination, Consultant shall not directly or indirectly solicit, recruit, or hire any employee of Client with whom Consultant had material contact.

12.3 Non-Solicitation of Clients. During the term and for [________________] following termination, Consultant shall not solicit any customer or client of Client with whom Consultant had material contact for competitive purposes.

12.4 Non-Competition. During the term and for [________________] following termination, within [________________________________], Consultant shall not engage in business competitive with Client in: [________________________________].

12.5 Illinois Freedom to Work Act Compliance (820 ILCS 90/).

(a) Non-Compete Earnings Threshold. Under 820 ILCS 90/10, a non-compete covenant is enforceable only if the individual's actual or expected annualized rate of compensation exceeds:

• $75,000 per year (effective January 1, 2022);
• $80,000 per year (effective January 1, 2027);
• $85,000 per year (effective January 1, 2032);
• $90,000 per year (effective January 1, 2037);

(b) Non-Solicitation Earnings Threshold. Under 820 ILCS 90/10, a non-solicitation covenant is enforceable only if the individual's actual or expected annualized rate of compensation exceeds:

• $45,000 per year (effective January 1, 2022);
• $47,500 per year (effective January 1, 2027);
• $50,000 per year (effective January 1, 2032);
• $52,500 per year (effective January 1, 2037);

(c) Applicability to Independent Contractors. The Illinois Freedom to Work Act by its terms applies to "employees" and "employers." Whether and how these provisions apply to independent contractors is an evolving area of law. Courts may consider these thresholds by analogy when evaluating the reasonableness of restrictive covenants with independent contractors;

(d) Adequate Consideration. Under 820 ILCS 90/15, the covenant is enforceable only if the individual received "adequate consideration," which means either: (i) the individual worked for the employer for at least two (2) years after signing the covenant; or (ii) the employer provided other adequate consideration;

(e) Advise to Consult Attorney. Under 820 ILCS 90/25, the employer must advise the individual in writing to consult with an attorney before entering into the covenant and must provide at least fourteen (14) calendar days to review the covenant before signing. The covenant must include this advisement;

(f) Attorney Advisement. CONSULTANT IS HEREBY ADVISED TO CONSULT WITH AN ATTORNEY BEFORE ENTERING INTO ANY RESTRICTIVE COVENANT CONTAINED IN THIS AGREEMENT. CONSULTANT HAS AT LEAST FOURTEEN (14) CALENDAR DAYS FROM RECEIPT OF THIS AGREEMENT TO REVIEW THE RESTRICTIVE COVENANTS CONTAINED HEREIN BEFORE SIGNING;

(g) Blue Pencil. Illinois courts may reform overbroad restrictive covenants to the extent necessary to make them enforceable;

(h) Prohibited for Certain Workers. Non-competes and non-solicitation agreements are unenforceable against individuals who were terminated, furloughed, or laid off as a result of the COVID-19 pandemic or similar circumstances, unless the covenant includes adequate consideration as described above.

12.6 Reasonableness Acknowledgment. Consultant acknowledges the covenants are reasonable, necessary, and supported by adequate consideration.

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ARTICLE 13: GENERAL PROVISIONS

13.1 Governing Law. This Agreement shall be governed by Illinois law, without regard to conflict of laws principles.

13.2 Jurisdiction and Venue. Actions shall be brought exclusively in the state courts of [________________] County, Illinois, or the United States District Court for the [________________] District of Illinois.

13.3 Waiver of Jury Trial. EACH PARTY WAIVES THE RIGHT TO JURY TRIAL IN ANY ACTION ARISING OUT OF THIS AGREEMENT. (Note: Illinois courts have upheld jury trial waivers in commercial agreements where both parties are sophisticated entities. However, enforceability may depend on the circumstances.)

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ARTICLE 14: DISPUTE RESOLUTION

14.1 Informal Resolution. The Parties shall first attempt good-faith negotiation within ten (10) Business Days.

14.2 Formal Dispute Resolution. (Select one)

☐ Option A: Litigation.
☐ Option B: Mediation Then Litigation. Mediation by [________________________________] in [________________], Illinois.
☐ Option C: Binding Arbitration. By [________________________________] in [________________], Illinois. Note: Under 820 ILCS 90/20, an employer may not compel arbitration of a claim arising under the Illinois Freedom to Work Act if the arbitration agreement was a condition of employment.
☐ Option D: Mediation Then Arbitration.

14.3 Injunctive Relief. Either Party may seek injunctive relief without first engaging in other dispute resolution procedures.

14.4 Attorneys' Fees. The prevailing Party shall be entitled to reasonable attorneys' fees and costs.

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ARTICLE 15: DATA PROTECTION AND PRIVACY

15.1 Data Protection Obligations. If Consultant receives or processes personal information of Illinois residents, Consultant shall implement reasonable security measures and comply with all applicable laws, including 815 ILCS 530/1 et seq. and 740 ILCS 14/1 et seq.

15.2 Data Breach Notification (815 ILCS 530/).

(a) Consultant shall notify Client within forty-eight (48) hours of discovering a breach of computerized personal information of Illinois residents;

(b) Under 815 ILCS 530/10, any data collector that owns or licenses personal information concerning an Illinois resident shall notify the resident in the most expedient time possible and without unreasonable delay following discovery of a breach of the security of the data;

(c) "Personal information" under 815 ILCS 530/5 includes an individual's first name or first initial and last name in combination with: Social Security number, driver's license number, state identification card number, financial account number with access codes, medical information, health insurance information, or unique biometric data;

(d) If the breach affects more than five hundred (500) Illinois residents, notice must be provided to the Illinois Attorney General;

(e) The Illinois Attorney General may bring an action for violation of the Act, and violations constitute an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/);

(f) Consultant shall cooperate with Client and bear costs attributable to Consultant's acts or omissions.

15.3 Biometric Information Privacy Act (BIPA — 740 ILCS 14/).

(a) Applicability. If the Services involve the collection, capture, receipt, storage, or use of Biometric Data (as defined in 740 ILCS 14/10), this Section 15.3 applies;

(b) Written Policy. Client and Consultant shall develop and maintain a written policy, available to the public, establishing a retention schedule and guidelines for permanently destroying Biometric Data when the initial purpose has been satisfied or within three (3) years of the individual's last interaction with the collecting entity, whichever occurs first (740 ILCS 14/15(a));

(c) Informed Written Consent. Before collecting or storing Biometric Data, the entity must: (i) inform the subject in writing of the specific purpose and length of time for which the data will be collected, stored, and used; and (ii) receive a written release from the subject (740 ILCS 14/15(b)). Electronic signatures are valid for this purpose (as amended by SB2979, effective August 2024);

(d) Prohibition on Sale/Profit. No entity may sell, lease, trade, or otherwise profit from a person's Biometric Data (740 ILCS 14/15(c));

(e) Security. Biometric Data must be stored, transmitted, and protected using a reasonable standard of care, and at least the same standard applied to other confidential and sensitive information (740 ILCS 14/15(e));

(f) Damages (as amended). Under the 2024 amendments, BIPA provides for a single recovery per individual (not per scan or transaction): $1,000 per negligent violation and $5,000 per intentional or reckless violation, plus reasonable attorneys' fees and costs, and injunctive relief;

(g) Consultant Obligations. If Consultant collects, stores, or uses Biometric Data on behalf of Client:

• Consultant shall process Biometric Data only as instructed by Client and for the purposes specified in this Agreement;
• Consultant shall not sell, lease, trade, or profit from Biometric Data;
• Consultant shall implement reasonable security measures;
• Consultant shall promptly return or destroy all Biometric Data upon termination;
• Consultant shall indemnify Client for any BIPA claims arising from Consultant's acts or omissions.

15.4 Data Return and Destruction. Upon termination, Consultant shall return or securely destroy all personal information and Biometric Data and certify compliance.

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ARTICLE 16: ILLINOIS-SPECIFIC PROVISIONS

16.1 Illinois Independent Contractor Classification — Summary.

(a) Unemployment Insurance (820 ILCS 405/212): Illinois applies the ABC test. The burden is on the employer to demonstrate all three factors;

(b) Workers' Compensation (820 ILCS 305/): Illinois applies the common law multi-factor control test;

(c) Employee Classification Act (820 ILCS 185/): Primarily targets construction industry but reflects Illinois's strong anti-misclassification policy. Knowing misclassification triggers penalties;

(d) Illinois Freelance Worker Protection Act (820 ILCS 192/). Effective July 1, 2024, this Act requires written contracts for freelance services valued at $500 or more, mandates timely payment (within 30 days of completion unless otherwise agreed), and prohibits retaliation against freelance workers who exercise their rights. If this Agreement qualifies, the Parties acknowledge compliance with its requirements;

(e) Substance Over Form: Illinois courts examine the actual relationship rather than contractual labels.

16.2 Illinois Interest Rate Limitations.

(a) Default Rate: Under 815 ILCS 205/2, the default rate of interest when no contract rate is specified is five percent (5%) per annum;

(b) Contract Rate: Under 815 ILCS 205/4, the maximum contract rate for most commercial obligations is nine percent (9%) per annum. Higher rates may be available under specific exceptions (e.g., business loans over $5,000);

(c) Judgment Interest: Under 735 ILCS 5/2-1303, post-judgment interest accrues at the rate of 9% per annum (or as otherwise specified by statute);

(d) Usury: Contracts exceeding the maximum lawful rate may be voidable and may result in penalties.

16.3 Illinois Non-Compete Enforceability (820 ILCS 90/).

(a) The Illinois Freedom to Work Act (effective January 1, 2022) significantly restricts non-compete and non-solicitation agreements;

(b) Non-competes are unenforceable against workers earning less than $75,000 per year (increasing to $80,000 on January 1, 2027);

(c) Non-solicitation agreements are unenforceable against workers earning less than $45,000 per year (increasing to $47,500 on January 1, 2027);

(d) The Act requires: (i) adequate consideration (2 years of employment or other consideration); (ii) written advisement to consult an attorney; and (iii) at least 14 days to review before signing;

(e) Illinois courts apply a three-factor test for reasonableness: whether the restriction is (i) no greater than required to protect a legitimate business interest; (ii) does not impose undue hardship on the individual; and (iii) does not injure the public;

(f) Courts may blue pencil overbroad covenants;

(g) The Act prohibits employers from requiring arbitration of Freedom to Work Act claims if arbitration was a condition of employment.

16.4 Illinois Workers' Compensation (820 ILCS 305/).

(a) If Consultant has employees in Illinois, workers' compensation insurance is mandatory;

(b) All employers with one or more employees must carry coverage;

(c) Independent contractors are excluded if properly classified;

(d) Failure to carry required coverage is a criminal offense.

16.5 Biometric Information Privacy Act (BIPA) Summary.

(a) Illinois is among the most protective states regarding biometric data;

(b) BIPA applies to "private entities" that collect, capture, or store biometric identifiers or information;

(c) Compliance requires a public retention policy, informed written consent, prohibition on sale of data, and reasonable security;

(d) Under the 2024 amendments, a single recovery per individual applies (not per scan);

(e) Consultant and Client should assess whether the Services involve any collection or use of biometric data and ensure BIPA compliance before commencement.

16.6 Illinois Replacement Tax (35 ILCS 5/201).

(a) Illinois imposes a Personal Property Replacement Tax on corporations (currently 2.5%) and partnerships, S corporations, and trusts (currently 1.5%) in addition to the standard Illinois income tax;

(b) If Consultant is a pass-through entity or corporation, Consultant is responsible for its own Replacement Tax obligations;

(c) Consultant shall not seek reimbursement from Client for Replacement Tax obligations.

16.7 Illinois Freelance Worker Protection Act (820 ILCS 192/).

(a) Effective July 1, 2024, this Act requires a written contract for freelance services valued at $500 or more;

(b) Required contract terms include: name and address of parties, itemization of services, value of services, rate and method of compensation, payment date (no later than 30 days after completion), and date by which services must be completed;

(c) This Agreement and the attached SOW are intended to satisfy these requirements;

(d) Client shall not retaliate against Consultant for exercising rights under this Act.

16.8 Electronic Signatures (5 ILCS 175/1-101 et seq.). This Agreement may be executed electronically in accordance with the Electronic Commerce Security Act. Electronic signatures have the same legal effect as original signatures.

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ARTICLE 17: ADDITIONAL GENERAL PROVISIONS

17.1 Entire Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements.

17.2 Amendment. No amendment unless in writing and signed by both Parties.

17.3 Waiver. No waiver unless in writing. No failure or delay operates as a waiver.

17.4 Severability. Invalid provisions modified or severed without affecting remaining provisions.

17.5 Assignment. Consultant may not assign without Client's consent. Client may assign to Affiliates or successors.

17.6 Notices. Written notices deemed given upon personal delivery, email confirmation, one Business Day after overnight courier, or three Business Days after certified mail.

If to Client:
Attention: [________________________________]
Email: [________________________________]
Address: [________________________________]

If to Consultant:
Attention: [________________________________]
Email: [________________________________]
Address: [________________________________]

17.7 Force Majeure. Neither Party liable for failure due to circumstances beyond reasonable control. If exceeding [____] days, either Party may terminate.

17.8 Counterparts. May be executed in counterparts. Electronic delivery is effective.

17.9 Headings. For convenience only.

17.10 Construction. No presumption against the drafter. "Including" means "including without limitation."

17.11 Publicity. No press releases without consent.

17.12 Third-Party Beneficiaries. For the Parties' sole benefit.

17.13 Order of Precedence. (a) Amendments; (b) this Agreement; (c) Change Orders; (d) SOWs; (e) Exhibits.

17.14 Export Compliance. Compliance with all export control laws.

17.15 Anti-Corruption. Compliance with FCPA and applicable anti-corruption laws.

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ARTICLE 18: SIGNATURES

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

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CLIENT:

[________________________________]
(Print Name of Entity)

By: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

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CONSULTANT:

[________________________________]
(Print Name of Entity or Individual)

By: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONSULTANT ACKNOWLEDGMENT REGARDING RESTRICTIVE COVENANTS (820 ILCS 90/25):
☐ Consultant acknowledges receipt of the advisement to consult with an attorney prior to agreeing to the restrictive covenants in Article 12.
☐ Consultant acknowledges having at least fourteen (14) calendar days to review the restrictive covenants before signing.

Consultant Initials: [____]
Date of Receipt: [__/__/____]

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OPTIONAL NOTARIZATION

STATE OF ILLINOIS
COUNTY OF [________________]

Before me, the undersigned notary public, on this [____] day of [________________], 20[____], personally appeared [________________________________], known to me to be the person whose name is subscribed to the within instrument and acknowledged that he/she executed the same.

WITNESS my hand and official seal.

[________________________________]
Notary Public, State of Illinois
My Commission Expires: [__/__/____]

[NOTARY SEAL]

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EXHIBIT A: STATEMENT OF WORK

STATEMENT OF WORK NO. [____]

Effective Date: [__/__/____]

This Statement of Work is entered into pursuant to the Consulting Services Agreement dated [__/__/____] between:

Client: [________________________________]
Consultant: [________________________________]

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1. PROJECT OVERVIEW

Project Name: [________________________________]

Description: [________________________________]

Objectives:
☐ [________________________________]
☐ [________________________________]
☐ [________________________________]

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2. SCOPE OF SERVICES

2.1 [Phase 1]: [________________________________]
☐ [________________________________]
☐ [________________________________]

2.2 [Phase 2]: [________________________________]
☐ [________________________________]
☐ [________________________________]

2.3 Out of Scope:
☐ [________________________________]

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3. DELIVERABLES

No.	Deliverable	Description	Format	Due Date
1	[________________________________]	[________________________________]	[____]	[__/__/____]
2	[________________________________]	[________________________________]	[____]	[__/__/____]
3	[________________________________]	[________________________________]	[____]	[__/__/____]

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4. TIMELINE

SOW Term: [__/__/____] through [__/__/____]

Milestone	Description	Target Date	Payment Trigger
M1: Kickoff	[________________________________]	[__/__/____]	☐ Yes ☐ No
M2: [________________]	[________________________________]	[__/__/____]	☐ Yes ☐ No
M3: Completion	[________________________________]	[__/__/____]	☐ Yes ☐ No

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5. COMPENSATION

☐ Fixed Fee: $[________________]
☐ Time and Materials:

Role	Rate	Est. Hours	Est. Total
[________________]	$[________]	[____]	$[________________]

Not-to-Exceed: $[________________]

☐ Monthly Retainer: $[________] for [____] hours

Expense Budget: $[________________]
Total SOW Value: $[________________]

Payment Date: No later than [__/__/____] or [____] days after completion (to comply with 820 ILCS 192/ if applicable)

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6. CLIENT RESPONSIBILITIES

☐ Personnel Access: [________________________________]
☐ Systems/Data Access: [________________________________]
☐ Timely Decisions: Response time: [____] Business Days

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7. KEY PERSONNEL

Role	Name	Email	Phone
Client PM	[________________________________]	[________________________________]	[________________________________]
Consultant Lead	[________________________________]	[________________________________]	[________________________________]

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8. ACCEPTANCE CRITERIA

☐ Conforms to SOW specifications
☐ Free from material defects
☐ [________________________________]

Review period: [____] Business Days.

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9. BIOMETRIC DATA (if applicable)

☐ This SOW involves collection, storage, or use of Biometric Data
☐ BIPA compliance measures are documented in Addendum [____]
☐ Informed written consent procedures are in place

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10. SOW SIGNATURES

CLIENT:
By: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CONSULTANT:
By: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

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EXHIBIT B: PRE-EXISTING MATERIALS

Item	Description	Ownership
[________________________________]	[________________________________]	Consultant
[________________________________]	[________________________________]	Consultant

☐ No Pre-Existing Materials anticipated.

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EXECUTION CHECKLIST

Agreement Setup:
☐ All bracketed fields completed
☐ Party information verified
☐ Effective Date inserted

Term and Termination (Article 3):
☐ Initial Term specified
☐ Renewal option selected
☐ Notice and cure periods specified

Compensation (Article 4):
☐ Fee structure selected
☐ Illinois Freelance Worker Protection Act compliance verified (if $500+ engagement)
☐ Payment terms and method selected
☐ Late payment interest rate within Illinois limits (max 9% for most commercial obligations)

Confidentiality (Article 5):
☐ Duration specified

Insurance (Article 11):
☐ Coverage amounts specified
☐ BIPA coverage assessed (if applicable)

Restrictive Covenants (Article 12):
☐ Applicability determined
☐ Illinois Freedom to Work Act compliance verified
☐ Earnings threshold confirmed (non-compete: $75,000+; non-solicitation: $45,000+)
☐ 14-day review period provided
☐ Written advisement to consult attorney included
☐ Adequate consideration confirmed

Dispute Resolution (Article 14):
☐ Option selected (note: cannot compel arbitration of Freedom to Work Act claims)
☐ Venue specified

Data Protection (Article 15):
☐ BIPA applicability assessed
☐ If biometric data involved: written policy, consent procedures, security measures documented

Illinois-Specific (Article 16):
☐ Independent contractor classification reviewed under ABC test
☐ Interest rate within statutory limits
☐ Replacement Tax obligations acknowledged
☐ Freelance Worker Protection Act requirements satisfied

Final Review:
☐ Agreement reviewed by Illinois-licensed legal counsel
☐ Fully executed copies distributed
☐ IRS Form W-9 provided
☐ Insurance certificates provided (if applicable)
☐ Freedom to Work Act advisement acknowledged by Consultant

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This template is intended for use under the laws of the State of Illinois. The statutory citations referenced herein were current as of the last updated date and should be verified before execution. This document does not constitute legal advice and should be reviewed by qualified legal counsel licensed in the State of Illinois before use.