Consulting Services Agreement

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CONSULTING SERVICES AGREEMENT

State of Minnesota

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."

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 Minnesota 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 Minnesota Uniform Trade Secrets Act, Minn. Stat. § 325C.01.

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 Minnesota; 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.

2.4 Additional Services. Any services not specifically described in an executed Statement of Work shall be documented in a written amendment or new Statement of Work. No additional services shall be performed unless documented in writing and signed by both Parties.

2.5 Consultant Personnel.

(a) Consultant shall assign qualified personnel to perform the Services. Key personnel shall not be removed without Client's prior written consent.

(b) Client may request replacement of unsatisfactory personnel. Consultant shall promptly replace at no additional cost.

(c) Consultant may engage subcontractors with Client's prior written consent, remaining fully responsible for subcontractor performance, requiring subcontractors to be bound by equivalent confidentiality and IP provisions.

2.6 Client Cooperation and Responsibilities. Client shall provide reasonable access to personnel, facilities, systems, and information; designate a primary contact; provide timely decisions and approvals; ensure accuracy of information provided; and perform Client responsibilities in the SOW.

2.7 Change Orders. Either Party may request changes. No change shall be effective unless documented in a written Change Order signed by both Parties.

2.8 Project Management. Consultant shall provide regular status reports, promptly notify Client of issues, and participate in project meetings as reasonably requested.

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

3.2 Statement of Work Term. Each SOW shall have its own term. Expiration or termination of one SOW shall not affect the validity of this Agreement or other SOWs.

3.3 Termination for Convenience.

(a) Either Party may terminate this Agreement or any SOW upon [____] days' prior written notice.

(b) Upon termination for convenience by Client, Client shall pay for all Services satisfactorily performed, non-cancelable expenses properly incurred, and pro-rata prepaid fixed fees.

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

(a) The other Party commits a material breach and fails to cure within [____] days after written notice;

(b) The other Party commits an incurable material breach;

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

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

3.6 Effect of Termination. Upon termination:

(a) Consultant shall cease Services unless otherwise directed;

(b) Within [____] days, Consultant shall deliver all completed and partial Deliverables, Work Product, Client materials, and a final accounting;

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

(e) Licenses for completed, paid-for Deliverables shall survive;

(f) Articles 1, 5, 6, 8, 9, 10, and 13 shall survive termination.

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

ARTICLE 4: COMPENSATION AND PAYMENT TERMS

4.1 Fee Structure. Client shall pay Consultant as set forth in the applicable SOW (check all that apply):

☐ Fixed Fee: $[________________] payable as follows: [________________________________].

☐ Hourly Rate:

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

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

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

☐ Milestone-Based: Per SOW.

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

☐ Blended Rate: $[________] per hour.

4.2 Rate Adjustments. Rates shall remain fixed for the Initial Term. For Renewal Terms, increases of up to [____]% may apply with [____] days' notice. Other adjustments require mutual agreement.

4.3 Expenses and Reimbursement.

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

(b) Thresholds: Up to $[________] without approval; over $[________] requires approval; monthly cap $[________].

(d) Receipts required for expenses exceeding $[____].

4.4 Invoicing.

(a) Invoices submitted:
☐ Monthly, by the [____] day
☐ Bi-weekly
☐ Per milestone
☐ Upon completion
☐ Other: [________________________________]

(b) Invoices shall include standard details (number, date, SOW reference, period, description, hours, rates, milestones, expenses, total, payment instructions).

(c) Submit to:
Contact: [________________________________]
Email: [________________________________]
Address: [________________________________]

4.5 Payment Terms.

(a) Payment within [____] days of receipt of proper invoice.

(b) Payment by:
☐ Check to [________________________________]
☐ ACH/Electronic Transfer
☐ Wire Transfer
☐ Credit Card (subject to [____]% fee)
☐ Other: [________________________________]

4.6 Late Payment Interest. Pursuant to Minnesota law, any amounts not paid when due shall bear interest at the rate of:

☐ Six percent (6%) per annum (Minnesota statutory default rate per Minn. Stat. § 334.01); or

☐ Ten percent (10%) per annum as permitted by Minn. Stat. § 549.09 for judgment interest on amounts over $50,000; or

☐ [____]% per annum as agreed by the Parties (subject to Minnesota usury limitations — generally up to 8% per annum absent a written agreement, or higher rates for commercial transactions per Minn. Stat. § 334.01); or

☐ One and one-half percent (1.5%) per month (18% per annum) as permitted by written agreement for commercial accounts

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

4.7 Disputed Invoices. Client shall notify Consultant of disputes within [____] days, pay undisputed amounts, and the Parties shall resolve disputes within thirty (30) days.

4.8 Taxes.

(a) Consultant is solely responsible for all taxes on compensation received.

(b) Client shall not withhold taxes.

(d) Minnesota imposes state income tax; Consultant is responsible for reporting and paying applicable Minnesota income taxes. Minnesota sales tax of 6.875% (plus local rates) applies to certain services; the Parties shall determine applicability and Client shall pay if applicable.

4.9 Records and Audit. Consultant shall maintain records for [____] years. Client may audit upon [____] Business Days' notice. Overcharges exceeding [____]% require reimbursement plus audit costs.

ARTICLE 5: CONFIDENTIALITY AND TRADE SECRETS

5.1 Confidentiality Obligations. Each Party (as "Receiving Party") agrees to hold in strict confidence all Confidential Information of the other Party, not disclose it, not use it for purposes other than this Agreement, and take reasonable precautions to prevent unauthorized disclosure.

5.2 Protective Measures. The Receiving Party shall use the same degree of care as its own confidential information (but not less than reasonable care), limit access to persons with need to know, and ensure such persons are bound by written confidentiality obligations.

5.3 Exclusions. Obligations do not apply to information that is publicly available, was already known, obtained 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, cooperate in seeking protective orders, disclose only what is required, and seek confidential treatment.

5.5 Trade Secrets Under Minnesota Law. The Parties acknowledge that certain Confidential Information may constitute "trade secrets" as defined under the Minnesota Uniform Trade Secrets Act (MUTSA), Minn. Stat. § 325C.01. With respect to such trade secrets:

(a) Confidentiality obligations shall continue for as long as the information remains a trade secret;

(b) Each Party shall maintain reasonable measures to preserve trade secret status;

(d) Under Minn. Stat. § 325C.03, damages may include actual loss and unjust enrichment, and exemplary damages not exceeding twice any compensatory award for willful and malicious misappropriation;

(e) Under Minn. Stat. § 325C.04, attorneys' fees may be awarded for bad faith claims or willful misappropriation;

(f) Under Minn. Stat. § 325C.07, the statute of limitations for misappropriation claims is three (3) years;

(g) MUTSA remedies are in addition to remedies available under this Agreement.

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

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

5.8 Duration. Except for trade secrets, confidentiality obligations survive for [____] years.

ARTICLE 6: INTELLECTUAL PROPERTY AND WORK PRODUCT

6.1 Ownership of Work Product. All Work Product shall be the sole and exclusive property of Client. Consultant irrevocably assigns all right, title, and interest, including all Intellectual Property Rights.

6.2 Work Made for Hire. To the extent Work Product qualifies as "work made for hire" under 17 U.S.C. § 101, Client is the author and owner. Otherwise, Consultant assigns all copyrights to Client.

6.3 Assignment of Inventions. Consultant assigns all inventions, discoveries, and innovations conceived in connection with the Services to Client.

6.4 Further Assurances. Consultant shall execute documents, cooperate in IP prosecution, provide legal assistance, and grant Client irrevocable power of attorney for these purposes.

6.5 Consultant's Pre-Existing Materials.

(a) Consultant retains all rights in Pre-Existing Materials.

(b) Consultant grants Client a non-exclusive, perpetual, irrevocable, royalty-free, worldwide license (with sublicense rights) to use Pre-Existing Materials incorporated into Deliverables.

6.6 Third-Party Materials. No incorporation without prior written consent. If approved, Consultant identifies, obtains licenses, ensures compatibility, and indemnifies Client.

6.7 Moral Rights. To the extent permitted by law, Consultant waives moral rights in Work Product.

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

6.9 Residual Knowledge. Consultant may use general skills and knowledge retained in unaided memory, provided this does not constitute use of Confidential Information or trade secrets.

6.10 Minnesota Invention Assignment Notice. Pursuant to Minn. Stat. § 181.78, this Agreement does not require assignment of any invention for which no equipment, supplies, facility, or trade secret information of Client was used and which was developed entirely on Consultant's own time, and which does not relate to Client's business or research, and which does not result from any work performed by Consultant for Client. Consultant is hereby notified that the assignment provisions do not apply to such inventions.

ARTICLE 7: INDEPENDENT CONTRACTOR STATUS

7.1 Independent Contractor Relationship. The relationship between Client and Consultant is that of independent contractor. Nothing herein creates a partnership, joint venture, agency, or employer-employee relationship.

7.2 Control and Discretion. Consultant has sole control over manner, means, and methods of performance, subject only to SOW deadlines and specifications.

7.3 Minnesota Independent Contractor Classification. The Parties intend that Consultant shall be classified as an independent contractor under Minnesota law, including the Minnesota Unemployment Insurance Law (Minn. Stat. § 268.035) and the Workers' Compensation Act (Minn. Stat. § 176.011). In furtherance:

(a) Common Law Factors: The following factors support independent contractor classification:

☐ Consultant controls how the work is performed;
☐ Consultant may hire helpers or subcontract at its own expense;
☐ Consultant provides its own tools, equipment, and supplies;
☐ Consultant is not required to work exclusively for Client;
☐ Consultant can profit or lose based on its management;
☐ Consultant is responsible for its own business expenses;
☐ Consultant maintains its own business location;
☐ Consultant advertises and provides services to the public;
☐ The relationship is of limited duration rather than indefinite;

(b) Unemployment Insurance (Minn. Stat. § 268.035, Subd. 9a): An individual is not an employee if the individual: (i) maintains a separate business with its own office, equipment, and investment; (ii) operates under contract to perform specific work for specific consideration; (iii) controls the means and methods of performance; (iv) incurs the main expenses related to the service; (v) is responsible for satisfactory completion of the work; (vi) receives compensation for work on a commission or per-job basis rather than on a time basis; (vii) may realize a profit or loss; (viii) has continuing or recurring business liabilities; (ix) the success or failure of the business depends on receipts vs. expenditures;

(c) Construction Industry (Minn. Stat. § 181.723): If the Services involve building construction or improvement, Consultant must satisfy the 14-factor test under Minn. Stat. § 181.723, subd. 4, which includes requirements regarding separate business facilities, serving multiple customers, insurance, and written contracts. Penalties for misclassification in construction can be significant under Minn. Stat. § 181.723, subd. 7.

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

7.5 Taxes and Withholding. Client shall not withhold taxes. Consultant is responsible for all taxes. Consultant shall indemnify Client for misclassification claims.

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 its own business expenses except those Client has agreed to reimburse.

ARTICLE 8: REPRESENTATIONS AND WARRANTIES

8.1 Mutual Representations and Warranties. Each Party represents that it is duly organized and in good standing, has full authority to enter into this Agreement, this Agreement is validly authorized, performance will not violate any law or agreement, and there is no pending litigation affecting performance.

8.2 Consultant's Representations and Warranties. Consultant represents:

(a) Consultant possesses necessary qualifications, skills, and licenses;

(b) Services will be performed in compliance with laws and in a professional manner;

(d) No conflicting rights have been or will be granted;

(e) Consultant holds all required Minnesota licenses and registrations;

(f) No conflicts with third-party obligations;

(g) All personnel are legally authorized to work in the United States;

(h) Software will be free of malicious code;

(i) Warranty Period: For [____] days after acceptance, Deliverables shall conform to specifications and be defect-free. Consultant shall promptly correct defects at no additional cost.

8.3 Client's Representations. Client represents authority to grant access, will provide accurate information, and owns or has rights to Client Materials.

8.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO WARRANTIES ARE MADE, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

ARTICLE 9: INDEMNIFICATION

9.1 Indemnification by Consultant. Consultant shall indemnify, defend, and hold harmless Client Indemnitees from Losses arising out of: (a) breach by Consultant; (b) Consultant's negligence or misconduct; (c) IP infringement (except from Client Materials); (d) non-compliance with laws; (e) misclassification claims; (f) personal injury or property damage; and (g) confidentiality breaches.

9.2 Indemnification by Client. Client shall indemnify Consultant Indemnitees from Losses arising from: (a) Client's breach; (b) Client's negligence or misconduct; (c) Client Materials infringement; and (d) unauthorized use of Deliverables.

9.3 Indemnification Procedures. Prompt notice, Indemnifying Party controls defense, cooperation required, no unauthorized settlement.

9.4 Minnesota Comparative Fault. Minnesota follows a modified comparative fault system under Minn. Stat. § 604.01. A claimant's damages are reduced by the percentage of fault attributable to the claimant. If the claimant's fault is greater than the combined fault of all defendants, the claimant may not recover. The Parties acknowledge this may affect indemnification obligations.

9.5 IP Infringement Remedies. If a Deliverable is subject to an infringement claim, Consultant shall procure continuing rights, replace, or modify the Deliverable. If none is commercially reasonable, Client may terminate for a refund.

ARTICLE 10: LIMITATION OF LIABILITY

10.1 Limitation on Consequential Damages. EXCEPT FOR BREACHES OF CONFIDENTIALITY, IP BREACHES, INDEMNIFICATION CLAIMS, THIRD-PARTY IP INFRINGEMENT, AND FRAUD/GROSS NEGLIGENCE/WILLFUL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES.

10.2 Cap on Liability. EXCEPT FOR THE CARVE-OUTS IN SECTION 10.1:

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

10.3 Minimum Liability Floor. $[________________].

10.4 Application. These limitations apply regardless of legal theory and do not limit liability for death or personal injury, intentional misconduct, fraud, or amounts owed for accepted Services.

10.5 Essential Basis of Bargain. THE LIMITATIONS REFLECT A FAIR ALLOCATION OF RISK AND ARE AN ESSENTIAL PART OF THE BARGAIN.

ARTICLE 11: INSURANCE REQUIREMENTS

11.1 Insurance Coverage. Consultant shall maintain from insurers licensed in Minnesota with A.M. Best rating A- or better:

(a) Commercial General Liability:

Per Occurrence: $[________________]
General Aggregate: $[________________]
Products/Completed Operations: $[________________]

(b) Professional Liability (E&O):

Per Claim: $[________________]
Aggregate: $[________________]
If claims-made, maintain for [____] years post-completion or purchase tail coverage.

As required by Minnesota law (Minn. Stat. § 176.011 et seq.) if Consultant has employees
Employers' Liability: $[________________] per accident
Minnesota Note: Under Minn. Stat. § 176.181, all Minnesota employers must provide workers' compensation coverage. Independent contractors who do not have employees are generally exempt.

(d) Business Auto Liability (if applicable):

Combined Single Limit: $[________________] per accident

(e) Cyber Liability (if applicable):

Per Claim: $[________________]

(f) Umbrella/Excess (optional):

Per Occurrence: $[________________]

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

11.3 Waiver of Subrogation. Consultant shall obtain waiver of subrogation against Client.

11.4 Primary Coverage. Consultant's insurance is primary and non-contributory.

11.5 Certificates. Consultant shall provide certificates and [____] days' notice of cancellation or material change.

11.6 No Limitation. Insurance requirements do not limit Consultant's liability.

11.7 Failure to Maintain. Failure constitutes a material breach.

ARTICLE 12: RESTRICTIVE COVENANTS

CRITICAL MINNESOTA NON-COMPETE BAN NOTICE

The Parties must carefully review this Article 12 in light of Minnesota's significant restrictions on restrictive covenants:

12.1 Minnesota Non-Compete Ban (Minn. Stat. § 181.988). Effective July 1, 2023, Minnesota law provides:

(a) General Prohibition: A covenant not to compete is void and unenforceable with respect to any "employee" who resides or works in Minnesota. The term "employee" is broadly defined under Minn. Stat. § 181.988, subd. 1(b), to include both employees and independent contractors;

(b) Exceptions: Non-competes remain valid only: (i) in connection with the sale or dissolution of a business or in anticipation of the dissolution of a business; or (ii) when an individual purchases an ownership interest in a business;

(c) No Non-Compete Provisions: Accordingly, this Agreement does NOT contain a non-compete provision applicable to Consultant or Consultant's personnel who work or reside in Minnesota, unless the engagement involves the sale or dissolution of a business, in which case the following exception applies:

☐ Sale/Dissolution Exception Applies: This engagement involves the sale or anticipated dissolution of a business, and the non-compete provisions in Section 12.5 apply.

(d) Remedies for Violation: A court may award attorneys' fees and costs to the employee or independent contractor if the employer or hiring party attempts to enforce a void non-compete. An employer that violates this section may face attorney fee liability under Minn. Stat. § 181.988, subd. 3;

(e) Forum Selection: An employer may not require a Minnesota employee to agree to adjudicate claims outside Minnesota as a condition of employment. Such provisions are voidable under Minn. Stat. § 181.988, subd. 4.

12.2 Service Contract Restrictive Covenant Ban (Minn. Stat. § 181.9881). Effective July 1, 2024, Minnesota law also provides:

(a) General Prohibition: A service provider (including a consulting firm) may not include in a service contract with a customer any provision that restricts or prohibits the customer from soliciting or hiring the service provider's employees or independent contractors;

(b) Exception for Computer Professionals: This prohibition does not apply to nonsolicitation restrictions involving an employee or independent contractor who qualifies as a "computer professional" under Minn. Stat. § 177.25, subd. 7;

(c) Effect on This Agreement: Client shall not be restricted from soliciting or hiring Consultant's employees or independent contractors upon termination of this Agreement, except as permitted under the computer professional exception if applicable;

(d) ☐ Computer Professional Exception Applies: Consultant's personnel performing the Services qualify as "computer professionals" under Minn. Stat. § 177.25, subd. 7, and the following limited non-solicitation provisions of Section 12.4 apply.

12.3 Permitted Protective Provisions. Notwithstanding the non-compete ban, the following protective provisions REMAIN ENFORCEABLE under Minnesota law:

(a) Non-Disclosure/Confidentiality Agreements: The confidentiality provisions in Article 5 are fully enforceable and are not affected by the non-compete ban;

(b) Trade Secret Protection: Obligations to protect trade secrets under Article 5 and the Minnesota Uniform Trade Secrets Act are fully enforceable;

(c) Non-Solicitation of Customers by Consultant: During the term and for [________________] following termination, Consultant shall not directly or indirectly solicit Client's customers or business partners with whom Consultant had material contact during the Services, for the purpose of providing competitive services. Note: Non-solicitation provisions imposed on independent contractors remain subject to reasonableness analysis under Minnesota law;

(d) Non-Solicitation of Employees by Consultant: During the term and for [________________] following termination, Consultant shall not solicit, recruit, or hire Client's employees with whom Consultant had material contact. Note: This provision is permitted under Minn. Stat. § 181.988 as it is not a covenant not to compete.

12.4 Computer Professional Non-Solicitation (If Applicable). If the box in Section 12.2(d) is checked:

During the term and for [________________] following termination, Client shall not directly or indirectly solicit or hire Consultant's computer professional personnel who performed Services under this Agreement.

12.5 Sale/Dissolution Non-Compete (If Applicable). If the box in Section 12.1(c) is checked:

During the term and for [________________] following termination, Consultant shall not within [________________________________] engage in competitive activities as follows: [________________________________].

12.6 Reasonableness. Consultant acknowledges that the permitted restrictive covenants are reasonable and necessary to protect Client's legitimate business interests.

12.7 Tolling. If Consultant violates a covenant, the duration is extended by the period of violation.

ARTICLE 13: DATA PROTECTION AND PRIVACY

13.1 Compliance. Each Party shall comply with all applicable data protection and privacy laws.

13.2 Minnesota Data Breach Notification. In the event of a breach of the security of data (as defined in Minn. Stat. § 325E.61) involving personal information of Minnesota residents:

(a) Notification shall be provided in the most expedient time possible and without unreasonable delay, as required by Minn. Stat. § 325E.61;

(b) Personal information includes: first name or first initial and last name in combination with Social Security number, driver's license number, or financial account number with access code;

(c) Notification is not required if there is no reasonable likelihood that personal information has been or will be misused;

(d) If more than 500 Minnesota residents are affected, the responsible Party shall also notify the Minnesota Attorney General within the notification timeframe;

(e) The responsible Party shall promptly notify the other Party to this Agreement if any breach involves information received from or on behalf of the other Party;

(f) Under Minn. Stat. § 325E.64, entities that suffer a breach affecting payment card information must also comply with notification requirements to financial institutions.

13.3 Personal Information Protection. Consultant shall implement reasonable security measures, use personal information only for the Services, and return or destroy upon termination.

13.4 Minnesota Government Data Practices Act. If any data under this Agreement is "government data" as defined in Minn. Stat. § 13.02, Consultant shall comply with the Minnesota Government Data Practices Act (Minn. Stat. Ch. 13) and maintain data in accordance with applicable classification requirements.

ARTICLE 14: DISPUTE RESOLUTION

14.1 Informal Resolution. Parties shall first attempt good faith negotiation. Representatives shall meet within ten (10) Business Days. If unresolved after thirty (30) days, formal resolution may proceed.

14.2 Formal Dispute Resolution. (Select one)

☐ Option A: Litigation. Courts specified in Section 15.2.

☐ Option B: Mediation Then Litigation. Mediation by [________________________________] in [________________], Minnesota. If unresolved within [____] days, proceed to litigation.

☐ Option C: Binding Arbitration. By [________________________________] in [________________], Minnesota, under Commercial Arbitration Rules.

☐ Option D: Mediation Then Arbitration.

14.3 Injunctive Relief. Either Party may seek injunctive relief without exhausting informal procedures.

14.4 Continued Performance. Parties shall continue to perform during disputes.

14.5 Attorneys' Fees. Prevailing Party may recover reasonable fees and costs.

14.6 Minnesota Forum Selection Note. Under Minn. Stat. § 181.988, subd. 4, an employer may not require a Minnesota employee to agree to adjudicate claims outside Minnesota as a condition of employment. If Consultant is deemed an "employee" for purposes of this statute, forum selection provisions requiring adjudication outside Minnesota may be voidable.

ARTICLE 15: GENERAL PROVISIONS

15.1 Governing Law. This Agreement shall be governed by the laws of the State of Minnesota, without regard to conflict of laws principles.

15.2 Jurisdiction and Venue. Actions shall be brought exclusively in [________________] County, Minnesota, or the United States District Court for the District of Minnesota. Each Party submits to exclusive jurisdiction.

15.3 Waiver of Jury Trial. EACH PARTY WAIVES THE RIGHT TO JURY TRIAL TO THE FULLEST EXTENT PERMITTED BY MINNESOTA LAW.

15.4 Entire Agreement. This Agreement, with all Exhibits and SOWs, constitutes the entire agreement.

15.5 Amendment. Amendments require written signature of both Parties.

15.6 Waiver. No waiver unless in writing and signed.

15.7 Severability. Invalid provisions shall be modified to the minimum extent necessary.

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

15.9 Notices. Written notices deemed given when delivered personally, one (1) Business Day after overnight courier, or three (3) Business Days after certified mail.

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

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

15.10 Force Majeure. No liability for failure or delay due to circumstances beyond reasonable control. If continuing more than [____] days, either Party may terminate.

15.11 Counterparts; Electronic Signatures. Executed in counterparts. Pursuant to the Minnesota Uniform Electronic Transactions Act (Minn. Stat. § 325L.01 et seq.) and the federal E-SIGN Act, electronic signatures shall have the same legal effect as ink signatures.

15.12 Headings; Construction. Headings for convenience only. No presumption against drafter. "Including" means "including without limitation."

15.13 Publicity. No public statements without consent.

15.14 Third-Party Beneficiaries. No third-party rights except as expressly provided for indemnification.

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

15.16 Export Compliance. Parties shall comply with export control laws.

15.17 Anti-Corruption. Parties represent compliance with anti-corruption laws.

ARTICLE 16: MINNESOTA-SPECIFIC PROVISIONS

16.1 Non-Compete Ban — Critical Compliance Notice. This Agreement has been drafted to comply with Minn. Stat. § 181.988 (effective July 1, 2023), which voids and makes unenforceable covenants not to compete against employees and independent contractors who work or reside in Minnesota. The Parties expressly acknowledge:

(a) No provision of this Agreement shall be construed as a covenant not to compete in violation of Minn. Stat. § 181.988;

(b) If any provision is deemed a prohibited non-compete, it shall be automatically severed and the remainder of this Agreement shall remain in full force and effect;

(c) Confidentiality, non-disclosure, non-solicitation (by Consultant of Client's customers), and trade secret protections are NOT affected by the non-compete ban and remain fully enforceable;

(d) The definition of "employee" under Minn. Stat. § 181.988 expressly includes independent contractors, making the ban applicable even to consulting relationships.

16.2 Service Contract Restrictive Covenant Ban. As of July 1, 2024 (Minn. Stat. § 181.9881), service providers may not restrict clients from soliciting or hiring the service provider's employees or independent contractors. This Agreement does not include such restrictions except as permitted for computer professionals.

16.3 Minnesota Interest Rates. The Parties acknowledge:

(a) Minnesota's legal rate of interest is 6% per annum (Minn. Stat. § 334.01);

(b) Contractual rates up to 8% per annum may be specified without being deemed usurious (Minn. Stat. § 334.01, subd. 1);

(d) Post-judgment interest accrues at 10% per annum for judgments over $50,000, and at 4% per annum plus the secondary market yield for judgments of $50,000 or less (Minn. Stat. § 549.09);

(e) The late payment provisions in this Agreement are intended to comply with Minnesota usury limitations.

16.4 Minnesota Workers' Compensation. Under Minn. Stat. § 176.181, Minnesota employers must provide workers' compensation coverage. Consultant represents that its independent contractor status is properly established. If Consultant has employees performing any Services in Minnesota, Consultant shall maintain workers' compensation insurance as required.

16.5 Minnesota Unemployment Insurance. The Parties acknowledge that Minn. Stat. § 268.035, subd. 9a, provides specific criteria for independent contractor status for unemployment insurance purposes. This Agreement is structured to satisfy those criteria.

16.6 Invention Assignment — Minnesota Statute § 181.78 Notice. Minnesota law requires the following notice: The provisions of this Agreement requiring assignment of inventions do not apply to any invention for which no equipment, supplies, facility, or trade secret information of Client was used and which was developed entirely on Consultant's own time, and which does not relate to Client's business or Client's actual or demonstrably anticipated research or development, and which does not result from any work performed by Consultant for Client.

16.7 Minnesota Sales Tax. Minnesota imposes a sales tax of 6.875% (plus applicable local rates) on certain services. The Parties shall determine whether the Services are subject to Minnesota sales tax. If taxable, Client shall pay applicable taxes. Consultant shall properly collect and remit sales tax if required by law.

16.8 Minnesota Data Practices. If Client is a government entity, the Minnesota Government Data Practices Act (Minn. Stat. Ch. 13) may apply to data created, maintained, or received under this Agreement. Consultant shall comply with all applicable data practices requirements.

16.9 Minnesota Prompt Payment Act. The Parties acknowledge that certain prompt payment requirements may apply to government contracts under Minn. Stat. § 16A.124. If Client is a Minnesota state agency, payments shall be made in compliance with the Prompt Payment Act.

ARTICLE 17: SIGNATURES

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

CLIENT:

[________________________________]
(Print Name of Entity)

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

CONSULTANT:

[________________________________]
(Print Name of Entity or Individual)

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

OPTIONAL NOTARIZATION

STATE OF MINNESOTA
COUNTY OF [________________]

Before me, the undersigned notary public, on this [____] day of [________________], 20[____], personally appeared [________________________________], known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

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

[NOTARY SEAL]

EXHIBIT A: STATEMENT OF WORK

STATEMENT OF WORK NO. [____]

Effective Date: [__/__/____]

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

Client: [________________________________]
Consultant: [________________________________]

Capitalized terms used but not defined herein have the meanings in the Agreement.

1. PROJECT OVERVIEW

Project Name: [________________________________]

Project Description:
[________________________________]
[________________________________]

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

2. SCOPE OF SERVICES

2.1 [Service Category/Phase 1]: [________________________________]
☐ [________________________________]
☐ [________________________________]
☐ [________________________________]

2.2 [Service Category/Phase 2]: [________________________________]
☐ [________________________________]
☐ [________________________________]
☐ [________________________________]

2.3 Out of Scope:
☐ [________________________________]
☐ [________________________________]

3. DELIVERABLES

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

4. PROJECT TIMELINE AND MILESTONES

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

Milestone	Description	Target Date	Payment Trigger
M1: Kickoff	[________________________________]	[__/__/____]	☐ Yes ☐ No
M2: [________________]	[________________________________]	[__/__/____]	☐ Yes ☐ No
M3: [________________]	[________________________________]	[__/__/____]	☐ Yes ☐ No
M4: Completion	[________________________________]	[__/__/____]	☐ Yes ☐ No

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: $[________________]

6. CLIENT RESPONSIBILITIES

☐ Personnel Access: [________________________________]
☐ Systems/Data: [________________________________]
☐ Approval Response Time: [____] Business Days
☐ Other: [________________________________]

7. KEY PERSONNEL

Role	Name	Email	Phone
Client Project Manager	[________________________________]	[________________________________]	[________________________________]
Consultant Project Lead	[________________________________]	[________________________________]	[________________________________]

8. ACCEPTANCE CRITERIA

☐ Conformance to specifications
☐ Free from material defects
☐ [________________________________]

Review Period: [____] Business Days.

9. SOW SIGNATURES

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

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

EXHIBIT B: PRE-EXISTING MATERIALS

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

☐ No Pre-Existing Materials anticipated.

EXECUTION CHECKLIST

Agreement Setup:
☐ All bracketed fields completed
☐ Party information accurate
☐ 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
☐ Late payment rate selected (compliant with Minn. Stat. § 334.01)
☐ Minnesota sales tax applicability determined

Confidentiality (Article 5):
☐ Duration specified
☐ MUTSA protections reviewed (Minn. Stat. § 325C.01)

IP and Inventions (Article 6):
☐ Minn. Stat. § 181.78 invention assignment notice included

Independent Contractor (Article 7):
☐ Classification criteria verified under Minn. Stat. § 268.035
☐ If construction, 14-factor test under Minn. Stat. § 181.723 satisfied

Restrictive Covenants (Article 12):
☐ Non-compete ban (Minn. Stat. § 181.988) compliance confirmed — NO non-compete included unless sale/dissolution exception applies
☐ Service contract ban (Minn. Stat. § 181.9881) compliance confirmed
☐ Computer professional exception determined (if applicable)
☐ Non-solicitation provisions reviewed for reasonableness

Data Protection (Article 13):
☐ Data breach notification procedures reviewed (Minn. Stat. § 325E.61)
☐ Government data practices compliance determined (if applicable)

Dispute Resolution (Article 14):
☐ Option selected
☐ Forum selection reviewed for Minn. Stat. § 181.988 compliance

Minnesota-Specific (Article 16):
☐ Non-compete ban fully complied with
☐ Service contract restriction ban fully complied with
☐ Interest rates within permissible limits
☐ Invention assignment notice included
☐ Sales tax applicability determined

Final Review:
☐ Agreement reviewed by Minnesota-licensed legal counsel
☐ Both Parties have received copies
☐ W-9 provided; 1099 to be issued
☐ Insurance certificates provided

This template is intended for use under the laws of the State of Minnesota. CRITICAL: Minnesota enacted a near-total ban on non-compete agreements effective July 1, 2023 (Minn. Stat. § 181.988), and a ban on restrictive covenants in service contracts effective July 1, 2024 (Minn. Stat. § 181.9881). These laws must be carefully considered when finalizing this Agreement. 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 before use.

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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: March 2026

Consulting Services Agreement