Sweat Equity Agreement
The Core Consulting Agreement Between a Company and a Contractor that is Contributing Sweat Equity
What it is: This agreement template is the starting point in our app and in the process for hiring a Consultant who is compensated with Sweat Equity. The Sweat Equity Agreement is the core consulting agreement that defines the relationship between the Company and Consultant. The agreement includes restrictive provisions, clarifies ownership of the contributed effort, and creates the flexibility to add Statements of Work and compensate in various forms of Sweat Equity
How it is used:
A Company will need one Sweat Equity Agreement per individual Consultant
Our app will walk you through the step-by-step process of filling in all blocks of information, along with all of the necessary tips, instructions, and examples
This agreement form will typically only take a couple of minutes to complete if you have the necessary inputs at hand
Once you've completed the form, you can download and send it to your attorney to review and/or sign online and send it to the Consultant to review and sign
All completed forms for all Sweat Equity Consultants that you complete are logged in your subscriber dashboard
Complete one overall Sweat Equity Agreement for each Consultant
Complete a separate Statement of Work (SOW) for each phase of work
Issue the Sweat Equity upon acceptance of the deliverables
What it contains: Our Sweat Equity Agreement template is a 12-page, comprehensive agreement that includes the following items:
Overall consulting agreement - this template has all of the necessary general legal language that governs the process of hiring a consultant (in most cases, a Sweat Equity contributor is an independent contract consultant and not an employee since the company has not yet launched).
Clear Company ownership of all deliverables - the agreement form makes it clear that the Consultant's work is a "work for hire" and the Company owns all of the deliverables. This is often a major point of disagreement and conflict on handshake deals and bad "business divorces".
Restrictive covenants - the agreement includes all of the necessary restrictive covenants, including clauses on proprietary information, non-compete, non-solicit, and confidentiality. These are critical elements and our app allows you the flexibility to negotiate key terms such as the length of the non-compete period after the termination of the agreement, the non-compete territory, and a specific business description that is disallowed to protect the Company from the Consultant simply taking their work that the Company paid for down the road to another startup.
Dispute resolution provisions - the agreement also contains provisions on how to resolve any disputes that may arise.
Other general provisions - the template includes key provisions such as an indemnification clause and a limitation of liability to protect the Company.
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