A Consulting Agreement (or Independent Contractor Agreement) is a legal contract that sets out the terms on which someone is engaged to perform work independently rather than as an employee.
A consultant or independent contractor is not entitled to employee benefits such as annual leave and sick leave so businesses often find it simpler to engage them on this basis and pay a single fee to the contractor/consultant which covers all of the costs for their services.
If you are a contractor, you should put an Independent Contractor Agreement in black & white and ask your client to sign it. It will help you get paid and protect your rights.
Likewise, if you’re hiring a contractor/consultant rather an employee, make sure you get the contract in writing.
A written Consulting Agreement that's in black & white and clearly states the responsibilities of each party will minimise the risk of disputes. And, help you get on with business... avoid lawyers... and stay out of Court.