Contingency Agreement for Canada

Contingency Agreement Template for Canada

A Contingency Agreement is a legally binding document used in Canadian jurisdictions that establishes a fee arrangement where payment is contingent upon achieving a specified outcome or result. This agreement outlines the scope of services, fee calculation methods, payment terms, and the rights and obligations of both the service provider and client. The document complies with Canadian federal and provincial regulations, including specific Law Society requirements for professional services, and includes necessary provisions for cost allocation, risk sharing, and termination conditions.

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What is a Contingency Agreement?

The Contingency Agreement serves as a fundamental document in Canadian professional services where payment is tied to successful outcomes. It is commonly used in legal services, business consulting, and other professional fields where service providers agree to accept payment only upon achieving specific results. This agreement type is particularly regulated in Canadian jurisdictions, with each province having specific requirements for contingency fee arrangements, especially in legal services. The document must comply with provincial Law Society rules, professional conduct guidelines, and consumer protection legislation. It typically includes detailed fee calculations, risk allocation provisions, client protections, and clear success criteria. The agreement is designed to protect both parties' interests while ensuring transparency and fairness in the contingency arrangement.

What sections should be included in a Contingency Agreement?

1. Parties: Identifies and defines the parties to the agreement, including full legal names and addresses

2. Background: Explains the context and purpose of the contingency agreement, including the nature of the matter being pursued

3. Definitions: Defines key terms used throughout the agreement for clarity and precision

4. Scope of Services: Clearly outlines the specific services to be provided under the contingency arrangement

5. Contingency Fee Structure: Details the percentage or calculation method for the contingency fee and when it becomes payable

6. Costs and Disbursements: Explains how expenses and disbursements will be handled and who is responsible for them

7. Payment Terms: Specifies how and when payments will be calculated and made upon successful resolution

8. Client's Rights and Obligations: Outlines the client's responsibilities and rights throughout the engagement

9. Service Provider's Rights and Obligations: Details the service provider's commitments and rights in pursuing the matter

10. Termination: Explains how either party can end the agreement and the consequences of termination

11. Governing Law: Specifies that the agreement is governed by Canadian law and the applicable provincial jurisdiction

12. Execution: Formal signing section with date and signature blocks for all parties

What sections are optional to include in a Contingency Agreement?

1. Alternative Dispute Resolution: Include when parties wish to specify mediation or arbitration procedures for resolving disputes about the agreement

2. Multiple Party Provisions: Include when there are multiple clients or service providers involved in the agreement

3. Referral Arrangements: Include when there are referral fees or arrangements with other professionals

4. Insurance and Indemnification: Include when specific insurance requirements or indemnification terms are necessary

5. Confidentiality: Include when handling sensitive information requires specific confidentiality provisions

6. Intellectual Property: Include when the services involve creation or use of intellectual property

7. Assignment: Include when transfer rights need to be specifically addressed

8. Force Majeure: Include when parties want to address unforeseen circumstances that might affect performance

What schedules should be included in a Contingency Agreement?

1. Schedule A - Fee Calculation Method: Detailed explanation of how the contingency fee will be calculated, including examples

2. Schedule B - Disbursements List: Comprehensive list of potential disbursements and their handling

3. Schedule C - Client Authorization: Specific authorizations granted by the client to the service provider

4. Schedule D - Progress Milestones: Key milestones in the matter and their relationship to the contingency arrangement

5. Appendix 1 - Provincial Law Society Requirements: Mandatory disclosures and provisions required by the relevant Law Society

6. Appendix 2 - Sample Settlement Statement: Template showing how settlements will be calculated and distributed

7. Appendix 3 - Related Agreements: Any associated agreements or documents referenced in the main agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use

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