A Guide to Advisory Agreements
If you’re running a crypto startup, chances are you have reached out to a contractor or advisor for help. Because of the speed at which the industry moves, hiring a third-party to take on a specific business function is faster and cheaper than hiring a full-time employee.
But you still need to define a set of agreements before entrusting the third-party with your work. Things like pay, deadlines, and scope of work are commonplace, however, different advisors/contractors may need modified agreements. For this reason, it is best to create an Advisory Agreement so you can quickly get the ball rolling!
However, before we get into the agreement, let’s discuss the basics.
What is An Advisory Agreement?
An Advisory Agreement, also known as a Contract Agreement, is a document used to memorialize the terms and conditions of the relationship between the employer and the third-party. This agreement expands upon the services and relationship between the advisory and the company. It’s needed because advisors operate under different benefits and pay compared to full time employees.
Who Signs The Advisory Agreement?
The Advisory Agreement is a two-party contract that’s signed by the company and the advisory. Companies may choose to involve a consulting firm to draft, proofread, and bullet-proof the agreement at extra cost.
Now that the definition and purpose of the agreement is clear, we can discuss how to draft and execute an Advisory Agreement.
What’s Included in an Advisory Agreement?
Advisory Agreements can range in length and complexity depending on the degree of involvement you expect from the third-party. However, components of a good Advisory Agreement Template should include:
- Services
- Compensation
- Expenses, Term and Termination
- Independent Contractor Clause
- Various NDA Clauses which you can find in our CIIAA agreement blog.
How To Draft and Execute An Advisory Agreement?
There are two ways to draft an Advisory Agreement. The first requires hiring lawyers or law firms to draft the agreement and an arbitrator to settle differences between the parties if necessary. Do note that the same Advisory Agreement may not be valid in every jurisdiction, and signing and enforcing the agreement when your advisors are spread across the world is difficult to say the least.
Overall, drafting and executing an Advisory Agreement the ‘old way’ is a lengthy and expensive process that can hurt the bottom-line if all parties don’t reach an agreement quickly.
This is why PAID suggests the second method, drafting and executing a blockchain-bound Advisory Agreement!
Why an Advisory Agreement on the Blockchain?
A blockchain-based advisory template offers the following advantages:
- Self-Enforcing: Enforcing an agreement has never been easier. Through smart contracts, self-executing code that triggers when predetermined conditions are met, the Advisory Agreement template becomes valid as soon as both parties sign.
- Immutable: The blockchain is an immutable record of transactions, this is why it is useful against disinformation, which means once signed, your Advisory Agreement can neither be altered nor lost. The agreement even imprints itself on the blockchain with a timestamp to aid with dispute resolutions if needed.
PAID DApp and the Advisory Agreement
The Advisory Agreement helps new entrepreneurs and freelancers protect themselves and navigate a highly globalized economy. It is going to be one of the many contract templates that PAID Network will be offering as part of the release of PAID DApp v2. These on-chain solutions will ensure our community is protected, allowing you to safely choose from a variety of templates to secure your business interests and #GETPAID.
The launch of PAID DApp v2 will be another step in the creation of the decentralized world. It leverages the power of the blockchain, demonstrating the disruptive impact of this new technology. With our Advisory Agreements, NDAs, and other templates, PAID is showing that on-chain solutions can play a major part in disrupting and enhancing legacy legal services.
Is an Advisory Agreement not the right type of document for your business? Check out our guide on the CIIAA, or mutual NDAs.
About PAID
PAID Network seeks to redefine the current business contract, litigation, and settlement processes by providing a simple, attorney-free, and cost-friendly DApp for users and businesses to ensure they #GetPAID wherever they are in the world.
PAID technology leverages Astar to operate on both Ethereum and Polkadot ecosystems. PAID makes businesses exponentially more efficient by building SMART Agreements through smart contracts to execute DeFi transactions and business agreements seamlessly.
PAID streamlines backend legal operations with SMART Agreements, so that projects can focus on making their brand bigger and better.
For any questions for the PAID network, please feel free to reach out to us on our:
