The six clauses that matter
- Days and pattern. How many days a month, whether they are fixed or flexible, and what happens to unused days. Ambiguity here is the single most common source of disagreement in month three.
- Notice. Thirty days either way is the usual shape at one or two days a week. Anything longer starts to look like employment, which is a risk for both sides.
- Intellectual property. Everything created during the engagement should assign to the company. Most consultancy templates say this. Check that yours does, because a fractional CTO writing code under a template that does not is a problem you find at diligence.
- Confidentiality, with a stated period. Two or three years after the engagement ends is normal.
- Conflicts. Not a blanket ban on other clients, which is the whole model, but a named list of direct competitors they will not take on during the engagement, and a duty to disclose new clients in the same space.
- Conversion. What happens if you later want them full-time. Agree it now, in a sentence, while nobody wants anything.
The clause everybody forgets
Conversion. A fractional engagement that works often ends with the company wanting the person permanently, and that conversation goes badly when nobody thought about it at the start.
One sentence is enough: that either side may raise it, that the fractional agreement ends on the day employment starts, and that no fee is owed to anyone on the change unless a third party introduced them and has terms that say otherwise. If you found the person through a platform or a search, read that platform's terms before you sign anything, because this is exactly where an introduction fee lives.
Who holds the contract
You should contract directly with the operator or their limited company. If a platform sits in the middle of the contract, the relationship is with the platform, and the terms that govern it are the platform's rather than yours.
On this site the contract is always between the company and the operator. We are not a party to it and not in the payment path, which is why the day rate you agree is the day rate they receive.
Status, and why the wording matters in the UK
A fractional executive working through their own limited company sits inside the off-payroll working rules, and the determination is the client's responsibility for medium and large companies. The contract wording is part of that assessment but it is not the whole of it: what actually happens week to week matters more.
The practical version is that substitution, control and mutuality of obligation are what get examined. A contract that describes a fixed-hours employee with a different job title will be read as one.
Questions
- Do you need a contract for a fractional executive?
- Yes, and a short one is enough. A two-page consultancy agreement covering days, notice, intellectual property, confidentiality, conflicts and conversion will cover almost every fractional engagement.
- What notice period is normal for a fractional executive?
- Thirty days either way at one or two days a week. Longer notice starts to resemble employment, which creates status risk for both sides and removes the flexibility that made the arrangement attractive.
- Can a fractional executive work for a competitor?
- The model depends on them having several clients, so a blanket ban is not realistic. The workable version is a named list of direct competitors they will not take on while engaged with you, plus a duty to tell you before accepting anyone new in the same space.