Consulting Services Agreement

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CONSULTING SERVICES AGREEMENT

State of North Carolina

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 North Carolina 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 North Carolina Trade Secrets Protection Act, N.C.G.S. § 66-152.

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.

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 North Carolina; and

(f) Free from material defects and errors.

2.3 Service Deliverables. Consultant shall provide Deliverables per the SOW schedule, format, and acceptance criteria.

2.4 Additional Services. 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. Key personnel shall not be replaced without Client's consent.

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

(c) Consultant may engage subcontractors with Client's consent, remaining responsible for performance and requiring equivalent confidentiality and IP protections.

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

2.7 Change Orders. No change is effective unless documented in a written Change Order signed by both Parties.

2.8 Project Management. Consultant shall provide status reports, notify Client of issues, and participate in meetings.

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").

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

☐ Automatic Renewal: Renews for successive [________________] periods unless either Party provides [____] days' written notice of non-renewal.

3.2 Statement of Work Term. Each SOW has its own term. Termination of one does not affect this Agreement or other SOWs.

3.3 Termination for Convenience. Either Party may terminate upon [____] days' written notice. Client shall pay for Services performed, non-cancelable expenses, and pro-rata prepaid fees.

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

(a) Material breach not cured within [____] days after notice;

(b) Incurable material breach;

(d) Fraud, gross negligence, or willful misconduct.

3.5 Termination for Non-Payment. Consultant may terminate upon [____] days' notice if payment remains [____] days overdue after notice.

3.6 Effect of Termination.

(a) Consultant ceases Services unless otherwise directed;

(b) Consultant delivers all Work Product, Client materials, and final accounting within [____] days;

(d) Parties return or destroy Confidential Information;

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

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

3.7 Transition Assistance. Up to [____] days at Client's expense.

ARTICLE 4: COMPENSATION AND PAYMENT TERMS

4.1 Fee Structure. (Check all that apply):

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

☐ 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 fixed for the Initial Term. Increases up to [____]% for Renewal Terms 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 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 North Carolina interest rate limitations under N.C.G.S. § 24-1 et seq.:

☐ Eight percent (8%) per annum (North Carolina statutory legal rate per N.C.G.S. § 24-1); or

☐ [____]% per annum as agreed by the Parties, not to exceed the maximum rate permitted by North Carolina law (note: for amounts of $25,000 or more, parties may agree in writing to a rate up to 18% per annum under N.C.G.S. § 24-1.1(a); for amounts under $25,000, the maximum contractual rate is 16% per annum); or

☐ One and one-half percent (1.5%) per month (18% per annum) for amounts of $25,000 or more as permitted by N.C.G.S. § 24-1.1(a)

from the due date until paid in full. Interest charges are in addition to all other remedies.

4.7 Disputed Invoices. Client shall notify within [____] days, pay undisputed amounts, and Parties shall resolve 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) North Carolina imposes a state income tax (currently a flat rate). Consultant is responsible for all NC income tax obligations. North Carolina sales tax of 4.75% (plus applicable local rates) applies to certain services; the Parties shall determine applicability.

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.

5.2 Protective Measures. Same degree of care as own confidential information, not less than reasonable care. Access limited to persons with need to know 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, provide prompt notice, cooperate in protective orders, disclose only what is required, and seek confidential treatment.

5.5 Trade Secrets Under North Carolina Law. The Parties acknowledge that certain Confidential Information may constitute "trade secrets" as defined under the North Carolina Trade Secrets Protection Act (NCTPA), N.C.G.S. § 66-152:

(a) Under N.C.G.S. § 66-152(3), a "trade secret" means business or technical information, including formula, pattern, program, device, compilation of information, method, technique, or process that derives independent actual or potential commercial value from not being generally known or readily ascertainable and is the subject of reasonable efforts to maintain its secrecy;

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

(d) Under N.C.G.S. § 66-154, damages may include actual loss, unjust enrichment, and in certain cases, a reasonable royalty. For willful and malicious misappropriation, exemplary damages not to exceed three times the compensatory award may be awarded under N.C.G.S. § 66-154(c);

(e) Under N.C.G.S. § 66-154(d), attorneys' fees may be awarded if willful and malicious misappropriation exists, or if a claim of misappropriation is made in bad faith;

(f) Under N.C.G.S. § 66-157, the statute of limitations for trade secret misappropriation is three (3) years;

(g) North Carolina Distinction: Unlike many states that adopted the Uniform Trade Secrets Act, North Carolina enacted its own Trade Secrets Protection Act, which has some notable differences. For example, N.C.G.S. § 66-152 defines trade secrets more broadly to include "compilation of information," and the treble damages provision (N.C.G.S. § 66-154(c)) is more generous than the UTSA's exemplary damages cap;

(h) NCTPA remedies are in addition to remedies under this Agreement.

5.6 Return or Destruction. Return or destroy upon termination or request; certify compliance.

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

5.8 Duration. Except for trade secrets (protected as long as they qualify), confidentiality obligations survive for [____] years.

ARTICLE 6: INTELLECTUAL PROPERTY AND WORK PRODUCT

6.1 Ownership of Work Product. All Work Product is Client's sole and exclusive property. Consultant irrevocably assigns all right, title, and interest.

6.2 Work Made for Hire. To the extent qualifying under 17 U.S.C. § 101, Client is author and owner. Otherwise, Consultant assigns all copyrights.

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, provide legal assistance, and grant irrevocable power of attorney.

6.5 Consultant's Pre-Existing Materials.

(a) Consultant retains all rights.

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

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

6.7 Moral Rights. To the extent permitted, Consultant waives moral rights.

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

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

ARTICLE 7: INDEPENDENT CONTRACTOR STATUS

7.1 Independent Contractor Relationship. The relationship 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 North Carolina Independent Contractor Classification. The Parties intend Consultant to be an independent contractor under North Carolina law, including the Employment Security Law (N.C.G.S. § 96-1 et seq.) and common law. North Carolina applies a common law "right of control" test, examining:

(a) Control Factors:

☐ Consultant controls how work is performed;
☐ Consultant sets its own work schedule;
☐ Consultant provides its own tools, equipment, and workspace;
☐ Consultant is not required to work exclusively for Client;
☐ Consultant can profit or lose based on managerial skill;
☐ Consultant is responsible for its own business expenses;
☐ Consultant maintains its own business location;
☐ Consultant provides services to multiple clients;
☐ Consultant has its own business licenses and registrations;
☐ Client does not provide training to Consultant;
☐ The relationship is of limited duration;
☐ The Services are not integral to Client's regular business;

(b) N.C.G.S. § 96-1 et seq. Factors: Under North Carolina's Employment Security Law, services are deemed "employment" unless the individual meets all three prongs of the ABC test:

A: Free from Control. The individual is free from control or direction over the performance of the services, both under contract and in fact;
B: Outside Usual Course. The services are either performed outside the usual course of the business for which the services are performed, or performed outside all the places of business of the enterprise for which the services are performed;
C: Independent Business. The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the services performed;

(c) The Parties have structured this Agreement to satisfy both the common law right of control test and the statutory ABC test.

7.4 No Employee Benefits. Consultant is not entitled to any employee benefits from Client.

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

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. Each Party represents: duly organized and in good standing; full authority; valid and binding obligation; no violations of law or agreements; no pending litigation affecting performance.

8.2 Consultant's Representations. Consultant represents:

(a) Necessary qualifications, skills, and licenses;

(b) Services will comply with all laws and be performed professionally;

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

(e) Holds all required North Carolina licenses and registrations;

(f) No conflicts with third-party obligations;

(g) All personnel are legally authorized to work in the U.S.;

(h) Software free of malicious code;

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

8.3 Client's Representations. Authority to grant access; accurate information; rights to Client Materials.

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

ARTICLE 9: INDEMNIFICATION

9.1 Indemnification by Consultant. Consultant shall indemnify, defend, and hold harmless Client Indemnitees from Losses arising from: (a) Consultant's breach; (b) negligence or wrongful acts; (c) IP infringement (except 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; (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 North Carolina Contributory Negligence. THE PARTIES ACKNOWLEDGE THAT NORTH CAROLINA IS ONE OF VERY FEW STATES THAT FOLLOWS THE DOCTRINE OF CONTRIBUTORY NEGLIGENCE. Under this doctrine:

(a) A plaintiff who is contributorily negligent — that is, who fails to exercise due care and whose negligence is a proximate cause of the plaintiff's injury — is completely barred from recovery, regardless of the degree of the defendant's fault;

(b) This is a harsher standard than the comparative negligence or comparative fault systems used in most other states;

(c) The Parties should be aware that any contributory negligence by the Party seeking indemnification could completely bar recovery in tort claims, even if the other Party bears the majority of fault;

(d) The last clear chance doctrine may provide a limited exception, allowing a contributorily negligent plaintiff to recover if the defendant had the last clear chance to avoid the harm;

(e) The indemnification provisions in this Article 9 are contractual obligations and are not subject to the contributory negligence defense unless the indemnification obligation is conditioned on the absence of the Indemnified Party's negligence.

9.5 North Carolina Construction Contract Indemnification. If the Services involve design, engineering, construction, or similar activities, the Parties acknowledge that N.C.G.S. § 22B-1 voids indemnification provisions that purport to indemnify a party against its own negligence in construction or design contracts. This limitation may affect the scope of indemnification under this Agreement.

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

ARTICLE 10: LIMITATION OF LIABILITY

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

10.2 Cap on Liability. EXCEPT FOR CARVE-OUTS:

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

10.3 Minimum Liability Floor. $[________________].

10.4 Application. Regardless of legal theory. Does not limit liability for death or personal injury, intentional misconduct, fraud, or amounts owed for accepted Services.

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

ARTICLE 11: INSURANCE REQUIREMENTS

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

(a) Commercial General Liability:

Per Occurrence: $[________________]
General Aggregate: $[________________]
Products/Completed Operations: $[________________]
Personal and Advertising Injury: $[________________]

(b) Professional Liability (E&O):

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

As required by North Carolina law (N.C.G.S. § 97-1 et seq.) if Consultant has employees
Employers' Liability: $[________________] per accident, $[________________] per employee for disease, $[________________] policy limit for disease
North Carolina Note: Under N.C.G.S. § 97-2, employers with three or more employees are generally required to carry workers' compensation insurance. Independent contractors are exempt, but misclassification can result in penalties.

(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 named as additional insured on CGL and auto policies.

11.3 Waiver of Subrogation. Consultant shall obtain waiver.

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

11.5 Certificates. Certificates upon request; [____] days' notice of cancellation or change.

11.6 No Limitation. Insurance does not limit Consultant's liability.

11.7 Failure to Maintain. Material breach.

ARTICLE 12: RESTRICTIVE COVENANTS

12.1 Applicability. This Article 12 applies only if checked:

☐ Restrictive Covenants Apply

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

12.3 Non-Solicitation of Clients and Customers. During the term and for [________________] following termination, Consultant shall not solicit Client's customers or business partners 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 competitive business as follows: [________________________________].

12.5 North Carolina Non-Compete Enforceability. The Parties acknowledge that:

(a) Non-compete agreements are enforceable in North Carolina if they meet certain requirements. North Carolina courts analyze non-competes using a strict reasonableness standard;

(b) Requirements for Enforceability: A non-compete must be: (i) in writing; (ii) supported by valuable consideration; (iii) reasonable as to time; (iv) reasonable as to territory; and (v) designed to protect a legitimate business interest rather than merely to prevent competition;

(c) Consideration: For new engagements, the engagement itself provides consideration. For existing relationships, additional consideration (such as additional compensation, promotion, or continued engagement) may be required;

(d) Time Limitations: North Carolina courts have generally found restrictions of one (1) to two (2) years to be reasonable. Restrictions of three (3) to five (5) years have been upheld in some circumstances. Restrictions exceeding five (5) years are presumed unreasonable;

(e) Geographic Limitations: The geographic scope must be reasonable in relation to the business interest being protected. North Carolina courts have upheld restrictions ranging from specific counties to multi-state areas, depending on the scope of the business;

(f) No Blue Pencil Doctrine: North Carolina follows the "strict construction" or "red pencil" approach. If a non-compete is overbroad, the court will generally strike the entire provision rather than reform it to make it reasonable (Hartman v. W.H. Odell and Associates, Inc., 117 N.C. App. 307 (1994)). The Parties should draft restrictive covenants narrowly to avoid this risk;

(g) Independent Contractor Non-Competes: Non-compete agreements can be enforced against independent contractors in North Carolina (Superior Performers, Inc. v. Phelps, 248 N.C. App. 294 (2016)). The "contract for employment" required need not provide employment for a definite term;

(h) The Parties intend all restrictive covenants to be reasonable and enforceable under North Carolina law.

12.6 Reasonableness Acknowledgment. Consultant acknowledges the covenants are reasonable and necessary, adequate consideration has been received, and enforcement will not impose undue hardship.

12.7 Tolling. If Consultant violates a covenant, the duration shall be 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 North Carolina Data Breach Notification. In the event of a security breach involving personal information (as defined in N.C.G.S. § 75-61(10)) of North Carolina residents:

(a) Notification shall be provided without unreasonable delay, consistent with law enforcement needs and measures to determine scope, as required by N.C.G.S. § 75-65;

(b) Notification must be provided to the affected individual and must include: (i) a description of the incident in general terms; (ii) a description of the type of personal information involved; (iii) a description of measures taken to prevent further breaches; (iv) a telephone number for further information; and (v) advice to remain vigilant;

(c) If more than 1,000 persons are notified, the entity must also notify the North Carolina Attorney General's office and all consumer reporting agencies (N.C.G.S. § 75-65(c));

(d) Any person who waives any of the notification provisions of N.C.G.S. § 75-65 is engaging in an unfair trade practice under N.C.G.S. § 75-1.1;

(e) The responsible Party shall promptly notify the other Party if a breach involves information received from or on behalf of that Party.

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 North Carolina Identity Theft Protection Act. The Parties shall comply with the Identity Theft Protection Act (N.C.G.S. § 75-60 et seq.), including the proper disposal of personal information (N.C.G.S. § 75-64) and the security freeze requirements.

ARTICLE 14: DISPUTE RESOLUTION

14.1 Informal Resolution. Parties shall first attempt good faith negotiation. Representatives with settlement authority 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 [________________], North Carolina. If unresolved within [____] days, proceed to litigation.

☐ Option C: Binding Arbitration. By [________________________________] in [________________], North Carolina, under Commercial Arbitration Rules. Note: N.C.G.S. § 22B-10 prohibits contractual jury waivers but does NOT prohibit arbitration clauses. Arbitration is a valid alternative for parties who wish to avoid jury trials.

☐ 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. The prevailing Party shall recover reasonable attorneys' fees and costs. North Carolina Note: North Carolina follows the "American Rule" under which each party generally pays its own attorneys' fees unless a statute, contract, or recognized exception provides otherwise. This contractual provision for attorneys' fees is enforceable.

ARTICLE 15: GENERAL PROVISIONS

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

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

15.3 NO JURY TRIAL WAIVER — NORTH CAROLINA PROHIBITION.

IMPORTANT: NORTH CAROLINA LAW (N.C.G.S. § 22B-10) PROVIDES THAT ANY PROVISION IN A CONTRACT OR AGREEMENT WAIVING THE RIGHT OF ANY PARTY TO A TRIAL BY JURY IS UNCONSCIONABLE AS A MATTER OF LAW AND IS UNENFORCEABLE. ACCORDINGLY, THIS AGREEMENT DOES NOT CONTAIN A JURY TRIAL WAIVER.

The Parties acknowledge that:

(a) Under N.C.G.S. § 22B-10, contractual jury trial waivers are per se unenforceable in North Carolina;

(b) This prohibition applies to all contracts, including commercial agreements between sophisticated parties;

(c) N.C.G.S. § 22B-10 does NOT prohibit parties from entering into agreements to arbitrate or engage in other forms of alternative dispute resolution;

(d) If the Parties wish to avoid a jury trial, they should select the arbitration option in Article 14;

(e) Any attempt to include a jury trial waiver in this Agreement or any amendment hereto would be void and unenforceable under North Carolina law.

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

15.5 Amendment. Written signature of both Parties required.

15.6 Waiver. No waiver unless in writing and signed.

15.7 Severability. Invalid provisions shall be modified or severed. North Carolina Note: As noted in Section 12.5(f), North Carolina courts generally follow the "red pencil" approach and may strike entire provisions rather than reform them. The Parties should draft provisions narrowly.

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 beyond reasonable control. If continuing more than [____] days, either Party may terminate.

15.11 Counterparts; Electronic Signatures. Pursuant to the North Carolina Uniform Electronic Transactions Act (N.C.G.S. § 66-311 et seq.) and the federal E-SIGN Act, electronic signatures are valid.

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 for indemnification.

15.15 Order of Precedence. (a) Amendments; (b) 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: NORTH CAROLINA-SPECIFIC PROVISIONS

16.1 Jury Trial Waiver Prohibition (N.C.G.S. § 22B-10). This is one of the most distinctive features of North Carolina contract law. The Parties acknowledge:

(a) Any provision in a contract waiving the right to a trial by jury is unconscionable as a matter of law and is unenforceable under N.C.G.S. § 22B-10;

(b) This prohibition applies regardless of the sophistication of the parties or the commercial nature of the agreement;

(d) Parties who wish to avoid jury trials should utilize the arbitration provision in Article 14;

(e) If this Agreement is executed in connection with a transaction that also involves other jurisdictions where jury waivers are permissible, the jury waiver prohibition applies to claims governed by North Carolina law.

16.2 Contributory Negligence. North Carolina is one of only a few remaining U.S. jurisdictions that follows the contributory negligence doctrine (along with Alabama, the District of Columbia, Maryland, and Virginia). Under this doctrine:

(a) A party that is even 1% at fault may be completely barred from recovering damages in a negligence action;

(b) The last clear chance doctrine provides a narrow exception;

(d) This doctrine does NOT apply to breach of contract claims, only to tort claims, but may affect mixed claims involving both contract and tort theories;

(e) The Parties should structure their risk allocation and indemnification provisions with this doctrine in mind.

16.3 North Carolina Non-Compete — Red Pencil Doctrine. Unlike many states that allow courts to reform or "blue pencil" overbroad restrictive covenants, North Carolina follows the "red pencil" or "strict construction" approach:

(a) If a non-compete or other restrictive covenant is found to be overbroad in any respect (time, geography, or scope), the court will generally strike the entire covenant rather than modify it;

(b) This makes precise drafting critically important. Restrictive covenants should be narrowly tailored to the minimum scope necessary;

(c) The Parties have drafted any applicable restrictive covenants in Article 12 to be as narrow as reasonably necessary to protect Client's legitimate business interests.

16.4 North Carolina Interest Rate Limitations. The Parties acknowledge:

(a) The legal rate of interest in North Carolina is 8% per annum (N.C.G.S. § 24-1);

(b) For written contracts involving amounts of $25,000 or more, parties may agree to interest rates up to 18% per annum (N.C.G.S. § 24-1.1(a));

(d) Charging interest in excess of the maximum permitted rate may constitute usury and render the interest provision void;

(e) The late payment provisions in this Agreement comply with these limitations.

16.5 North Carolina Workers' Compensation. Under N.C.G.S. § 97-2, employers with three or more employees are required to carry workers' compensation insurance. The Parties note:

(a) Independent contractors are not employees and are not covered;

(b) Misclassification can result in the North Carolina Industrial Commission imposing penalties;

(c) If Consultant has employees performing Services in North Carolina, Consultant must maintain workers' compensation coverage.

16.6 North Carolina Unfair and Deceptive Trade Practices. Under N.C.G.S. § 75-1.1, unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce are declared unlawful. The Parties acknowledge:

(a) A breach of contract alone does not constitute an unfair or deceptive trade practice, but a breach coupled with aggravating or deceptive circumstances may give rise to a UDTP claim;

(b) If a UDTP violation is proven, the court shall award treble damages (N.C.G.S. § 75-16) and may award attorneys' fees (N.C.G.S. § 75-16.1);

16.7 North Carolina Statute of Limitations. Under N.C.G.S. § 1-52(1), the statute of limitations for breach of contract in North Carolina is three (3) years. For sealed instruments, the period is ten (10) years under N.C.G.S. § 1-47(2). The Parties should consider whether to execute this Agreement under seal.

16.8 North Carolina Business Registration. If Consultant is a foreign entity, Consultant shall obtain a certificate of authority from the North Carolina Secretary of State before transacting business in North Carolina (N.C.G.S. § 55-15-01 for corporations; N.C.G.S. § 57D-7-01 for LLCs).

16.9 Indemnification in Construction Contracts. If any portion of the Services relates to design, construction, or engineering, the indemnification provisions shall comply with N.C.G.S. § 22B-1, which voids provisions that require indemnification for the negligence of the indemnitee in connection with construction contracts.

16.10 North Carolina Electronic Commerce Act. The Parties acknowledge that the North Carolina Uniform Electronic Transactions Act (N.C.G.S. § 66-311 et seq.) provides that electronic signatures and records are valid and enforceable. The Parties consent to the use of electronic signatures for this Agreement and any amendments.

ARTICLE 17: SIGNATURES

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

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 NORTH CAROLINA
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.

WITNESS my hand and official seal.

[________________________________]
Notary Public, State of North Carolina
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 have the meanings in the Agreement.

1. PROJECT OVERVIEW

Project Name: [________________________________]

Project Description:
[________________________________]
[________________________________]

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

2. SCOPE OF SERVICES

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

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

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

3. DELIVERABLES

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

4. 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

☐ 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 N.C.G.S. § 24-1)
☐ Interest rate within limits ($25,000+ = up to 18%; under $25,000 = up to 16%)
☐ North Carolina sales tax applicability determined

Confidentiality (Article 5):
☐ Duration specified
☐ Trade secret protections reviewed under NCTPA (N.C.G.S. § 66-152 et seq.)
☐ Treble damages provision noted (N.C.G.S. § 66-154(c))

Independent Contractor (Article 7):
☐ Common law right of control test factors verified
☐ ABC test under N.C.G.S. § 96-1 satisfied

Restrictive Covenants (Article 12):
☐ Covenants narrowly drafted (red pencil doctrine — no reformation)
☐ Time, geography, and scope are reasonable
☐ Valuable consideration confirmed
☐ Independent contractor non-compete enforceability confirmed

Data Protection (Article 13):
☐ Breach notification procedures reviewed (N.C.G.S. § 75-65)
☐ Identity Theft Protection Act compliance reviewed (N.C.G.S. § 75-60 et seq.)

Dispute Resolution (Article 14):
☐ Option selected
☐ Consider arbitration if jury avoidance is desired (jury waivers unenforceable — N.C.G.S. § 22B-10)

Jury Trial:
☐ NO JURY WAIVER INCLUDED (N.C.G.S. § 22B-10 prohibition confirmed)
☐ If jury avoidance desired, arbitration clause selected in Article 14

North Carolina-Specific (Article 16):
☐ Jury waiver prohibition acknowledged
☐ Contributory negligence implications reviewed
☐ Red pencil doctrine considered for restrictive covenants
☐ Interest rates within statutory limits
☐ UDTP Act (N.C.G.S. § 75-1.1) implications noted
☐ Construction indemnification limitations reviewed (if applicable)
☐ Statute of limitations noted (3 years; 10 years under seal)
☐ Foreign entity registration confirmed (if applicable)

Final Review:
☐ Agreement reviewed by North Carolina-licensed legal counsel
☐ Both Parties 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 North Carolina. CRITICAL: North Carolina law prohibits contractual jury trial waivers (N.C.G.S. § 22B-10), follows the contributory negligence doctrine, and applies the "red pencil" doctrine to restrictive covenants (striking rather than reforming overbroad provisions). 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