IT consulting contracts: Distinction with a difference

Across most common law jurisdictions, one of the most important and fundamental aspects of every information technology consulting agreement is also one of the most frequent and formidable sources of legal misunderstanding and commercial risk. Luckily, this source of risk is entirely within the ability of IT customers to mitigate, if not entirely avoid.

The commercial and legal risks arise directly out of a pervasive, and yet deceptively simple, misunderstanding concerning the differences between an “advisory” consulting service and a “deliverable” consulting service. The failure to appreciate that simple, yet profound, distinction lies at the heart of many of the most serious disputes and liabilities that arise in the course of IT consulting projects.

IT consulting transactions that are structured as advisory services, involve retaining a consultant to provide expert, experienced and professional advice in support of a particular endeavour or to facilitate a particular outcome. Although consulting services may be provided by leading authorities in their fields, such retainers do not guarantee particular results, benefits or outcomes.

Duncan Card is a partner and co-chair of the technology practice at Bennett Jones LLP, a law firm with offices in Calgary, Toronto, Edmonton, Ottawa, Washington DC, Dubai and Doha, and a representative office in Beijing.