Consulting Services Agreement

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CONSULTING SERVICES AGREEMENT

State of North Dakota

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: [________________________________]
North Dakota Business License No. (if applicable): [________________________________]

(hereinafter referred to as "Consultant")

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

RECITALS

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

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

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

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

WHEREAS, the Parties acknowledge that North Dakota law, specifically N.D.C.C. § 9-08-06, renders non-compete covenants void as a restraint of trade, and the Parties' restrictive covenant obligations under this Agreement are limited accordingly;

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 Dakota 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 Dakota Uniform Trade Secrets Act, N.D.C.C. § 47-25.1-01 et seq.

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

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

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

1.8 "Personal Information" means information as defined in N.D.C.C. § 51-30-01(3), including an individual's first name or first initial and last name in combination with certain data elements such as Social Security number, driver's license number, financial account numbers, date of birth, or other identifying information as set forth under North Dakota's data breach notification statute.

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

1.10 "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.

1.11 "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.

1.12 "Work Product" means all Deliverables, inventions, discoveries, improvements, ideas, concepts, techniques, methods, processes, designs, works of authorship, documentation, and other work product conceived, created, developed, 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 North Dakota; and

(f) Free from material defects and errors.

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

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

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

(b) A new Statement of Work.

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

2.5 Consultant Personnel.

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

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

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

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

2.6 Client Cooperation and Responsibilities. Client shall:

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

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

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

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

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

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

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

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

ARTICLE 3: TERM AND TERMINATION

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

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

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

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

3.3 Termination for Convenience.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(d) All provisions of this Agreement that by their nature should survive termination shall survive, including Articles 5, 6, 7, 8, 9, 10, 11, and 15.

3.7 Survival. The following provisions shall survive any termination or expiration of this Agreement: Article 1 (Definitions), Article 5 (Confidentiality), Article 6 (Intellectual Property), Article 7 (Representations and Warranties), Article 8 (Indemnification), Article 9 (Limitation of Liability), Article 10 (Non-Compete and Restrictive Covenants — North Dakota Provisions), Article 11 (Insurance), Article 14 (Dispute Resolution), and Article 15 (General Provisions).

ARTICLE 4: COMPENSATION AND PAYMENT

4.1 Fees. Client shall pay Consultant for the Services in accordance with the fee structure set forth in the applicable Statement of Work. The fee structure shall be one or more of the following, as specified in the SOW:

☐ Fixed Fee: A total fixed fee of $[________________] for the Services described in the SOW.

☐ Time and Materials: Based on Consultant's actual hours at the following rates:

[Role/Title]: $[____] per hour
[Role/Title]: $[____] per hour
[Role/Title]: $[____] per hour
Not-to-exceed amount: $[________________] (if applicable)

☐ Retainer: A monthly retainer of $[________________] for up to [____] hours per month.

Additional hours beyond retainer: $[____] per hour
Unused hours: ☐ Roll over ☐ Do not roll over

☐ Milestone-Based: Payments tied to the completion and acceptance of milestones as set forth in the SOW.

☐ Other: [________________________________]

4.2 Invoicing. Consultant shall submit invoices to Client:

☐ Monthly, within [____] days after the end of each calendar month
☐ Upon completion of milestones as set forth in the SOW
☐ Other: [________________________________]

Each invoice shall include: (a) a description of Services performed during the billing period; (b) hours worked (if time-based); (c) applicable rates; (d) itemized expenses with receipts; (e) the total amount due; and (f) the SOW to which the invoice relates.

4.3 Payment Terms. Client shall pay each undisputed invoice within [____] days of receipt (the "Payment Period"). Payment shall be made by:

☐ Check ☐ ACH/Wire Transfer ☐ Credit Card ☐ Other: [________________]

4.4 Late Payment Interest — North Dakota Statutory Rate. Any undisputed amounts not paid within the Payment Period shall bear interest at the rate of six percent (6%) per annum, which is the legal rate of interest under N.D.C.C. § 47-14-05. The Parties may agree to a higher contractual rate not to exceed the maximum allowable rate under N.D.C.C. § 47-14-09, which is five and one-half percent (5.5%) above the average rate on six-month U.S. Treasury bills, but in no event less than seven percent (7%) per annum.

NORTH DAKOTA USURY NOTICE: Pursuant to N.D.C.C. § 47-14-09, the maximum contract rate of interest that may be charged is five and one-half percent per annum above the current cost of money as reflected by the average rate of interest payable on United States Treasury bills maturing in six months, but not less than seven percent (7%). Any interest charged in excess of this rate is usurious and may be void. The current maximum usury rate is published by the North Dakota Department of Financial Institutions.

Agreed Late Payment Rate: [____]% per annum (not to exceed the applicable usury ceiling)

4.5 Expenses. Client shall reimburse Consultant for reasonable, pre-approved, out-of-pocket expenses incurred in performing the Services, including:

☐ Travel expenses (airfare, mileage at IRS rate, lodging, meals)
☐ Materials and supplies
☐ Third-party vendor costs
☐ Other: [________________________________]

All expenses exceeding $[________________] individually, or $[________________] in the aggregate per month, require Client's prior written approval.

4.6 Taxes.

(a) Consultant shall be solely responsible for the payment of all federal, state, and local taxes arising from the compensation paid under this Agreement, including but not limited to income taxes, self-employment taxes, and estimated tax payments.

(b) North Dakota Tax Considerations: North Dakota has substantially eliminated its state individual income tax effective for tax years beginning in 2024 (House Bill 1158, 68th Legislative Assembly). Consultant is responsible for determining and complying with any remaining state tax obligations. There is no state sales tax on professional consulting services in North Dakota, but Consultant should verify current tax treatment of the specific services provided.

(c) Client shall not withhold any taxes from payments to Consultant, and Consultant shall indemnify Client against any tax liability arising from Consultant's failure to pay applicable taxes.

(d) Each Party shall provide the other with any tax forms or documentation reasonably requested, including but not limited to IRS Form W-9.

4.7 Disputed Invoices. If Client disputes any portion of an invoice, Client shall:

(a) Pay the undisputed portion in accordance with Section 4.3;

(b) Provide Consultant with a detailed written explanation of the disputed amount within [____] days of receipt of the invoice;

ARTICLE 5: CONFIDENTIALITY AND DATA PROTECTION

5.1 Confidentiality Obligations. During the term of this Agreement and for a period of [____] years following termination or expiration, each Party (the "Receiving Party") shall:

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

(b) Not disclose Confidential Information to any third party without the prior written consent of the Disclosing Party;

(d) Limit access to Confidential Information to those employees, agents, and subcontractors who have a need to know and who are bound by confidentiality obligations no less restrictive than those set forth herein;

(e) Protect Confidential Information using at least the same degree of care as the Receiving Party uses to protect its own confidential information of similar nature and importance, but in no event less than reasonable care.

5.2 Exclusions. Confidential Information shall not include information that:

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

(b) Was rightfully in the Receiving Party's possession prior to disclosure by the Disclosing Party;

(c) Is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information;

(d) Is rightfully received from a third party without restriction on disclosure;

(e) Is required to be disclosed by law, regulation, court order, or governmental authority, provided the Receiving Party gives prompt notice to the Disclosing Party and cooperates in any effort to obtain protective treatment.

5.3 Trade Secrets — North Dakota Uniform Trade Secrets Act. Both Parties acknowledge that certain Confidential Information may constitute "trade secrets" as defined in N.D.C.C. § 47-25.1-01(4). A trade secret under North Dakota law means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Misappropriation of trade secrets under the NDUTSA subjects the misappropriating party to injunctive relief (N.D.C.C. § 47-25.1-02), damages including actual loss and unjust enrichment (N.D.C.C. § 47-25.1-03), and attorney's fees in cases of willful and malicious misappropriation (N.D.C.C. § 47-25.1-04). The statute of limitations for trade secret misappropriation claims is three (3) years under N.D.C.C. § 47-25.1-06.

5.4 Return of Confidential Information. Upon termination or expiration of this Agreement, or upon request of the Disclosing Party, the Receiving Party shall promptly:

(a) Return or destroy all Confidential Information of the Disclosing Party;

(b) Certify in writing that all such Confidential Information has been returned or destroyed;

(c) Notwithstanding the foregoing, the Receiving Party may retain copies of Confidential Information as required by law, regulation, or its document retention policies, provided such retained copies remain subject to the confidentiality obligations herein.

5.5 Data Breach Notification — North Dakota Law. In the event of a security breach involving Personal Information as defined in N.D.C.C. § 51-30-01 et seq., the responsible Party shall:

(a) Notify the other Party within twenty-four (24) hours of discovery of the breach;

(b) Comply with all notification requirements under N.D.C.C. § 51-30-02, including notification to affected individuals without unreasonable delay;

(c) If the breach affects more than 250 North Dakota residents, notify the North Dakota Attorney General as required by N.D.C.C. § 51-30-02;

(d) Provide all reasonable cooperation in investigating and remedying the breach;

(e) Bear the costs of notification and remediation to the extent the breach resulted from such Party's negligence or failure to comply with its obligations under this Agreement.

5.6 Data Security Standards. Each Party handling Personal Information shall implement and maintain reasonable security measures appropriate to the nature of the information, consistent with N.D.C.C. § 51-30-07 and applicable industry standards.

ARTICLE 6: INTELLECTUAL PROPERTY

6.1 Work Product Ownership. Select one:

☐ Option A — Client Ownership: All Work Product shall be considered "work made for hire" to the maximum extent permitted under applicable law. To the extent any Work Product does not qualify as work made for hire, Consultant hereby irrevocably assigns to Client all right, title, and interest in and to such Work Product, including all Intellectual Property Rights therein.

☐ Option B — Consultant Ownership with License: Consultant shall retain all right, title, and interest in and to the Work Product. Consultant hereby grants to Client a perpetual, irrevocable, non-exclusive, royalty-free, worldwide license to use, reproduce, modify, distribute, display, and create derivative works from the Work Product for Client's internal business purposes.

☐ Option C — Joint Ownership: The Parties shall jointly own all Work Product created under this Agreement, with each Party having the right to use such Work Product without accounting to the other.

6.2 Pre-Existing Materials. Consultant retains all right, title, and interest in and to the Pre-Existing Materials. To the extent any Pre-Existing Materials are incorporated into the Deliverables, Consultant hereby grants to Client a perpetual, irrevocable, non-exclusive, royalty-free license to use such Pre-Existing Materials solely as part of and in connection with the Deliverables.

6.3 Assignment Assistance. Consultant shall, at Client's request and expense, execute all documents and take all actions reasonably necessary to perfect, register, or enforce Client's Intellectual Property Rights in the Work Product. Consultant hereby irrevocably appoints Client as Consultant's attorney-in-fact to execute any such documents on Consultant's behalf if Consultant fails or refuses to do so within a reasonable time.

6.4 Client Materials. Client retains all right, title, and interest in and to all materials, data, information, and other content provided by Client to Consultant in connection with the Services ("Client Materials"). Client grants Consultant a limited, non-exclusive, non-transferable license to use Client Materials solely for the purpose of performing the Services.

6.5 No Other Rights. Except as expressly set forth in this Agreement, neither Party grants the other any rights in or to its Intellectual Property.

ARTICLE 7: REPRESENTATIONS AND WARRANTIES

7.1 Mutual Representations and Warranties. Each Party represents and warrants that:

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

(b) It has the full power and authority to enter into and perform its obligations under this Agreement;

(d) It shall comply with all applicable federal, state (including the State of North Dakota), and local laws, rules, regulations, and ordinances in performing its obligations under this Agreement.

7.2 Consultant Representations and Warranties. Consultant further represents and warrants that:

(a) The Services shall be performed in a professional and workmanlike manner in accordance with the highest industry standards;

(b) The Deliverables shall conform to the specifications and requirements set forth in the applicable Statement of Work;

(c) The Deliverables and Work Product shall be original works of Consultant and shall not infringe, misappropriate, or violate the Intellectual Property Rights or other rights of any third party;

(d) Consultant possesses all necessary licenses, permits, certifications, and qualifications required to perform the Services in the State of North Dakota;

(e) Consultant has not entered into any agreement that would conflict with its obligations under this Agreement;

(f) Consultant shall perform the Services in compliance with all applicable anti-corruption, anti-bribery, and anti-money laundering laws.

7.3 Warranty Period. Consultant warrants that the Deliverables shall conform to the applicable specifications for a period of [____] days following acceptance by Client. During this period, Consultant shall, at no additional cost to Client, correct any material errors or deficiencies in the Deliverables.

7.4 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

ARTICLE 8: INDEMNIFICATION

8.1 Indemnification by Consultant. Consultant shall indemnify, defend, and hold harmless Client and its officers, directors, employees, agents, and affiliates from and against any and all claims, losses, damages, liabilities, judgments, settlements, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to:

(a) Any breach by Consultant of any representation, warranty, or obligation under this Agreement;

(b) Any negligent act, omission, or willful misconduct by Consultant or its personnel in connection with the Services;

(c) Any claim that the Deliverables or Work Product infringe, misappropriate, or violate the Intellectual Property Rights or other rights of any third party;

(d) Any failure by Consultant to comply with applicable laws or regulations, including North Dakota law;

(e) Any personal injury or property damage caused by Consultant or its personnel;

(f) Any claim by any governmental authority or third party that Consultant or its personnel are employees rather than independent contractors, including claims for unpaid taxes, benefits, or penalties.

8.2 Indemnification by Client. Client shall indemnify, defend, and hold harmless Consultant and its officers, directors, employees, agents, and affiliates from and against any and all claims, losses, damages, liabilities, judgments, settlements, costs, and expenses (including reasonable attorneys' fees) arising out of or relating to:

(a) Any breach by Client of any representation, warranty, or obligation under this Agreement;

(b) Any negligent act, omission, or willful misconduct by Client or its personnel;

(d) Client Materials infringing, misappropriating, or violating the rights of any third party.

8.3 Indemnification Procedure. The indemnified Party shall:

(a) Provide prompt written notice to the indemnifying Party of any claim;

(b) Grant the indemnifying Party sole control of the defense and settlement of such claim;

(d) Not settle any claim without the indemnifying Party's prior written consent.

ARTICLE 9: LIMITATION OF LIABILITY

9.1 Limitation Cap. EXCEPT FOR OBLIGATIONS UNDER ARTICLES 5 (CONFIDENTIALITY), 6 (INTELLECTUAL PROPERTY), 8 (INDEMNIFICATION), AND CLAIMS ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, NEITHER PARTY'S TOTAL AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL EXCEED:

☐ The total fees paid or payable under this Agreement during the [____]-month period preceding the claim
☐ $[________________]
☐ Other: [________________________________]

9.2 Exclusion of Consequential Damages. EXCEPT FOR BREACHES OF ARTICLE 5 (CONFIDENTIALITY), ARTICLE 6 (INTELLECTUAL PROPERTY), OR CLAIMS ARISING FROM GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR FRAUD, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION LOST PROFITS, LOST REVENUE, LOSS OF DATA, LOSS OF BUSINESS OPPORTUNITY, OR COST OF SUBSTITUTE SERVICES, REGARDLESS OF THE THEORY OF LIABILITY.

9.3 North Dakota Law Considerations. Nothing in this Article 9 shall be construed to limit liability in a manner prohibited by North Dakota law. North Dakota courts may decline to enforce liability limitations deemed unconscionable under N.D.C.C. § 9-08-04 (contracts void as against public policy).

ARTICLE 10: NON-COMPETE AND RESTRICTIVE COVENANTS — NORTH DAKOTA PROVISIONS

CRITICAL NORTH DAKOTA NOTICE: North Dakota is one of the most restrictive states in the nation regarding non-compete agreements. N.D.C.C. § 9-08-06 provides that "every contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void." This prohibition applies regardless of the reasonableness of the restriction. The Parties should structure their protective provisions through confidentiality, trade secret, and non-solicitation of clients provisions rather than traditional non-compete clauses.

10.1 Non-Compete Prohibition — N.D.C.C. § 9-08-06. The Parties acknowledge and agree that:

(a) North Dakota Century Code § 9-08-06 renders void any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind;

(b) This Agreement does not contain, and shall not be construed to contain, any non-compete covenant or any provision that would restrain Consultant from engaging in any lawful profession, trade, or business during or after the term of this Agreement;

(c) The sole exceptions under N.D.C.C. § 9-08-06 are: (i) covenants executed in connection with the sale of goodwill of a business, limited to a specified county, city, or part thereof; and (ii) agreements between partners upon dissolution, limited to the same city where the partnership business has been transacted;

(d) Choice of Law/Forum Selection Prohibition: Pursuant to North Dakota case law, the Parties may not circumvent N.D.C.C. § 9-08-06 through choice-of-law or forum selection clauses that would apply another state's more permissive non-compete law. Any attempt to do so shall be void and unenforceable as applied to services performed in North Dakota or consultants residing in North Dakota.

10.2 Permissible Restrictive Covenants. Notwithstanding the non-compete prohibition, the following restrictive covenants are permissible and enforceable under North Dakota law:

(a) Non-Solicitation of Clients (Limited):
During the term of this Agreement and for a period of [____] months following termination, Consultant shall not directly solicit any clients of Client with whom Consultant had material contact during the performance of Services under this Agreement, for the purpose of providing services that are substantially similar to the Services. This provision is intended as a narrow protection of Client's customer relationships and trade secrets, not as a broad restraint on Consultant's trade.

NORTH DAKOTA ENFORCEABILITY NOTE: Non-solicitation covenants are distinct from non-compete covenants and may be enforceable in North Dakota to the extent they protect trade secrets and confidential client information without broadly restraining the consultant's ability to practice. However, enforceability is not guaranteed, and North Dakota courts may interpret overly broad non-solicitation provisions as de facto non-competes subject to N.D.C.C. § 9-08-06.

(b) Non-Solicitation of Employees:
During the term of this Agreement and for a period of [____] months following termination, neither Party shall directly solicit or recruit any employee of the other Party who was involved in the Services under this Agreement, without the other Party's prior written consent.

(c) Non-Disclosure and Confidentiality:
The Parties' obligations regarding Confidential Information and trade secrets as set forth in Article 5 constitute the primary protective mechanism under this Agreement and are fully enforceable under North Dakota law, including under the North Dakota Uniform Trade Secrets Act (N.D.C.C. § 47-25.1-01 et seq.).

10.3 Remedies for Breach of Restrictive Covenants. In the event of a breach or threatened breach of the permissible restrictive covenants in this Article 10, the non-breaching Party shall be entitled to seek:

(a) Injunctive relief without the necessity of proving actual damages;

(b) Monetary damages, including actual loss and unjust enrichment;

ARTICLE 11: INDEPENDENT CONTRACTOR STATUS — NORTH DAKOTA CLASSIFICATION

11.1 Independent Contractor Relationship. The Parties intend and agree that Consultant is an independent contractor and not an employee, partner, joint venturer, or agent of Client. Nothing in this Agreement shall be construed to create an employment, partnership, joint venture, or agency relationship between the Parties.

11.2 North Dakota Common Law Test. The Parties acknowledge that North Dakota uses the common law test (approximately 20 factors) under N.D.C.C. § 52-01-01 et seq. to determine independent contractor status for unemployment insurance purposes. Under this test, every person who performs services for another for remuneration is presumed to be an employee, and the burden of proving independent contractor status rests on the party asserting it. To support independent contractor classification, the Parties agree that:

(a) Consultant shall have the right to control the manner, method, and means of performing the Services, subject only to the specifications set forth in the applicable Statement of Work;

(b) Consultant shall set its own work schedule and hours;

(d) Consultant may perform services for other clients during the term of this Agreement;

(e) Client shall not provide training to Consultant on how to perform the Services;

(f) Consultant shall be responsible for hiring, supervising, and compensating its own employees and subcontractors;

(g) Consultant is engaged to achieve specific results and deliverables, not to work specific hours;

(h) Either Party may terminate this Agreement as provided herein without penalty beyond the termination provisions;

(i) Consultant shall not receive employee benefits from Client, including health insurance, retirement benefits, paid leave, or workers' compensation coverage;

(j) Consultant maintains its own business identity and may advertise and market its services independently.

11.3 North Dakota Workforce Safety and Insurance (WSI). North Dakota operates a state-run workers' compensation system through Workforce Safety and Insurance (N.D.C.C. § 65-01-01 et seq.). The Parties acknowledge that:

(a) As an independent contractor, Consultant is not covered under Client's WSI policy;

(b) Consultant may voluntarily obtain WSI coverage or maintain adequate alternative insurance;

(c) If Consultant is later reclassified as an employee, Client may become liable for WSI premiums, penalties, and claims under N.D.C.C. § 65-04-33;

(d) Consultant acknowledges receiving the North Dakota Independent Contractor Verification form as required by the North Dakota Department of Labor and Human Rights.

11.4 Tax Obligations. Consultant shall be solely responsible for all tax obligations, including:

(a) Federal and state income taxes (noting North Dakota's near-elimination of individual income tax beginning 2024);

(b) Self-employment taxes (Social Security and Medicare);

(d) Any applicable sales or use taxes;

(e) Client shall report payments to Consultant on IRS Form 1099-NEC as required by federal law.

11.5 Consequences of Reclassification. If any governmental authority determines that Consultant is an employee rather than an independent contractor, Consultant shall indemnify Client for any taxes, penalties, interest, benefits, and costs resulting from such reclassification, unless such reclassification results from Client's exercise of control inconsistent with independent contractor status.

ARTICLE 12: INSURANCE

12.1 Required Insurance. During the term of this Agreement and for a period of [____] years thereafter, Consultant shall maintain, at its own expense, the following insurance coverages:

(a) Commercial General Liability: $[________________] per occurrence / $[________________] aggregate;

(b) Professional Liability (Errors & Omissions): $[________________] per occurrence / $[________________] aggregate;

(d) Workers' Compensation/WSI: As required by North Dakota law, or evidence of exemption as an independent contractor;

(e) Commercial Automobile Liability: $[________________] per occurrence (if applicable);

(f) Umbrella/Excess Liability: $[________________] (if applicable).

12.2 Insurance Requirements. All insurance policies shall:

(a) Be issued by insurers licensed in the State of North Dakota with a minimum A.M. Best rating of A-VII or equivalent;

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

(d) Be primary and non-contributory with respect to any insurance maintained by Client.

12.3 Certificates of Insurance. Consultant shall provide Client with certificates of insurance evidencing the required coverage prior to commencing the Services and upon each renewal.

ARTICLE 13: NORTH DAKOTA-SPECIFIC PROVISIONS

13.1 Anti-Corporate Farming Laws. If the Services involve agricultural consulting, the Parties acknowledge that North Dakota's anti-corporate farming laws (N.D.C.C. § 10-06.1-01 et seq.) restrict certain corporate entities from engaging in farming or ranching operations. Consultant shall ensure that any advice or services provided do not cause Client to violate these restrictions.

13.2 North Dakota Income Tax — Near-Elimination. The Parties acknowledge that the 68th North Dakota Legislative Assembly substantially eliminated the state individual income tax effective for tax years beginning in 2024 (House Bill 1158). Consultant should consult with a qualified tax professional regarding any remaining state tax obligations, including any income earned from services performed in North Dakota.

13.3 North Dakota Electronic Transactions. This Agreement may be executed electronically in accordance with the North Dakota Uniform Electronic Transactions Act (N.D.C.C. § 9-16-01 et seq.). Electronic signatures shall have the same legal effect as original signatures, provided the signatures comply with the requirements of the Act.

13.4 North Dakota Consumer Protection. The Parties acknowledge that deceptive or fraudulent business practices related to this Agreement may be subject to the North Dakota Consumer Fraud Act (N.D.C.C. § 51-15-01 et seq.), which provides for civil remedies including damages and injunctive relief.

13.5 Prohibition on Forum Shopping for Non-Competes. The Parties expressly acknowledge that any attempt to apply another state's law to circumvent North Dakota's prohibition on non-compete agreements (N.D.C.C. § 9-08-06) through choice-of-law provisions shall be void and unenforceable with respect to any consultant who is a resident of North Dakota or who performs services primarily in North Dakota.

13.6 Compliance with North Dakota Professional Licensing. If the Services require professional licensing in North Dakota (e.g., engineering, accounting, legal, medical), Consultant represents that it holds all required licenses and certifications and shall maintain them in good standing throughout the term of this Agreement.

ARTICLE 14: DISPUTE RESOLUTION

14.1 Negotiation. The Parties shall first attempt to resolve any dispute arising out of or relating to this Agreement through good faith negotiation between senior representatives of each Party. Either Party may initiate negotiation by delivering written notice describing the dispute to the other Party. The Parties shall negotiate in good faith for a period of [____] days.

14.2 Mediation. If the dispute is not resolved through negotiation, the Parties shall submit the dispute to mediation administered by:

☐ The American Arbitration Association (AAA) under its Commercial Mediation Procedures
☐ A mutually agreed mediator licensed in North Dakota
☐ Other: [________________________________]

14.3 Arbitration (if selected). ☐ If mediation is unsuccessful, the dispute shall be resolved by binding arbitration:

(a) Administered by: ☐ AAA ☐ JAMS ☐ Other: [________________]

(b) Under the rules of: [________________________________]

(d) Before [____] arbitrator(s)

(e) The arbitrator's decision shall be final and binding and may be entered as a judgment in any court of competent jurisdiction in the State of North Dakota.

14.4 Litigation (if arbitration not selected). ☐ Any dispute not resolved through negotiation and mediation shall be submitted to the exclusive jurisdiction of the state and federal courts located in [________________] County, North Dakota. The Parties hereby consent to personal jurisdiction in such courts.

14.5 Attorneys' Fees. The prevailing Party in any dispute arising under this Agreement shall be entitled to recover its reasonable attorneys' fees and costs from the non-prevailing Party.

14.6 Equitable Relief. Notwithstanding the foregoing, either Party may seek injunctive or other equitable relief from any court of competent jurisdiction without first engaging in negotiation, mediation, or arbitration, where necessary to prevent irreparable harm (including breach of confidentiality obligations or misappropriation of trade secrets).

14.7 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY NORTH DAKOTA LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

ARTICLE 15: GENERAL PROVISIONS

15.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Dakota, without regard to its conflict of laws principles. The Parties expressly agree that North Dakota law shall apply to all aspects of this Agreement, including the enforceability of restrictive covenants under N.D.C.C. § 9-08-06.

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

15.3 Amendments. This Agreement may be amended or modified only by a written instrument signed by authorized representatives of both Parties.

15.4 Waiver. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of such provision or the right to enforce it at a later time.

15.5 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction in North Dakota, the remaining provisions shall remain in full force and effect. The invalid provision shall be modified to the minimum extent necessary to make it valid and enforceable while preserving the Parties' intent. This provision is particularly relevant to the restrictive covenant provisions in Article 10, which may be narrowed or severed by a North Dakota court.

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

(a) Upon personal delivery;
(b) One (1) Business Day after deposit with a nationally recognized overnight courier;
(c) Three (3) Business Days after deposit in the United States mail, certified, return receipt requested, postage prepaid;
(d) Upon transmission if sent by email with confirmation of receipt.

Notices shall be sent to the addresses set forth in the preamble of this Agreement or to such other address as a Party may designate in writing.

15.7 Assignment. Neither Party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that either Party may assign this Agreement to an Affiliate or in connection with a merger, acquisition, or sale of all or substantially all of its assets, provided the assignee assumes all obligations under this Agreement.

15.8 Force Majeure. Neither Party shall be liable for any delay or failure to perform its obligations under this Agreement due to causes beyond its reasonable control, including acts of God, war, terrorism, pandemic, epidemic, fire, flood, earthquake, natural disaster, government actions, or other force majeure events, provided the affected Party promptly notifies the other Party and uses reasonable efforts to mitigate the delay.

15.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same agreement. Execution by electronic signature in accordance with the North Dakota Uniform Electronic Transactions Act (N.D.C.C. § 9-16-01 et seq.) shall be valid and binding.

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

15.11 Relationship of the Parties. Nothing in this Agreement shall be construed to create any partnership, joint venture, agency, or employment relationship between the Parties. Neither Party shall have the authority to bind the other or incur obligations on behalf of the other.

15.12 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns. Nothing herein shall confer any rights upon any third party.

15.13 Construction. This Agreement shall not be construed more strictly against either Party regardless of which Party was principally responsible for its drafting.

EXECUTION

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

CLIENT:

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

CONSULTANT:

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

EXHIBIT A: STATEMENT OF WORK (SOW)

SOW Number: [____]
SOW Effective Date: [__/__/____]
Reference Agreement Date: [__/__/____]

1. Project Description

[________________________________]

2. Scope of Services

[________________________________]

3. Deliverables

Deliverable	Description	Due Date	Acceptance Criteria
[________________]	[________________]	[__/__/____]	[________________]
[________________]	[________________]	[__/__/____]	[________________]
[________________]	[________________]	[__/__/____]	[________________]

4. Timeline and Milestones

Milestone	Description	Target Date
[________________]	[________________]	[__/__/____]
[________________]	[________________]	[__/__/____]
[________________]	[________________]	[__/__/____]

5. Fees and Payment Schedule

Fee Structure: ☐ Fixed Fee ☐ Time & Materials ☐ Retainer ☐ Milestone-Based

Payment Milestone	Amount	Due Date
[________________]	$[________________]	[__/__/____]
[________________]	$[________________]	[__/__/____]
[________________]	$[________________]	[__/__/____]

Total SOW Value: $[________________]

6. Key Personnel

Name	Role	Hourly Rate (if applicable)
[________________]	[________________]	$[____]
[________________]	[________________]	$[____]

7. Client Responsibilities

[________________________________]

8. Assumptions and Dependencies

[________________________________]

9. Acceptance Criteria and Process

[________________________________]

10. Special Terms Applicable to This SOW

[________________________________]

SOW SIGNATURES:

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

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

EXECUTION CHECKLIST

☐ All bracketed fields completed with appropriate information
☐ Fee structure selected and amounts filled in (Article 4)
☐ IP ownership option selected (Article 6)
☐ Renewal option selected (Article 3)
☐ Dispute resolution method selected (Article 14)
☐ Insurance amounts specified (Article 12)
☐ Liability cap selected and amount specified (Article 9)
☐ Non-compete prohibition acknowledged — N.D.C.C. § 9-08-06 (Article 10)
☐ Non-solicitation periods specified (Article 10)
☐ Confidentiality period specified (Article 5)
☐ Statement of Work (Exhibit A) completed and attached
☐ North Dakota Workforce Safety and Insurance (WSI) status confirmed (Article 11)
☐ IRS Form W-9 collected from Consultant
☐ Independent contractor verification completed per ND Department of Labor
☐ Certificates of insurance obtained
☐ Review by North Dakota-licensed attorney completed
☐ Both Parties have executed the Agreement and SOW

This Consulting Services Agreement template is provided for informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. This template must be reviewed, customized, and approved by a qualified attorney licensed in the State of North Dakota before execution. North Dakota law, particularly regarding non-compete agreements (N.D.C.C. § 9-08-06), differs significantly from other states — legal counsel is essential. Laws and regulations change frequently; verify all statutory citations are current at the time of use. Use of this template is at your own risk.

North Dakota Statutory References:

N.D.C.C. § 9-01-01 et seq. — Contract Formation
N.D.C.C. § 9-08-06 — Non-Compete Agreements Void
N.D.C.C. § 47-14-05 — Legal Rate of Interest (6%)
N.D.C.C. § 47-14-09 — Maximum Contract Rate of Interest (Usury)
N.D.C.C. § 47-25.1-01 et seq. — Uniform Trade Secrets Act
N.D.C.C. § 51-30-01 et seq. — Data Breach Notification
N.D.C.C. § 52-01-01 et seq. — Employment Security (IC Classification)
N.D.C.C. § 65-01-01 et seq. — Workforce Safety and Insurance
N.D.C.C. § 9-16-01 et seq. — Uniform Electronic Transactions Act
N.D.C.C. § 51-15-01 et seq. — Consumer Fraud Act
N.D.C.C. § 10-06.1-01 et seq. — Anti-Corporate Farming

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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