This is an agreement to be used where you are engaging an individual to carry out work for your business, but you are not employing them. The term 'Consultant' is a general term to describe such a person, but you may call them a 'Freelancer' or 'Adviser' depending on what they're doing for you.
When would you use this document?
You would use this agreement when you need someone to carry out work for your business, but you don't want to employ someone. That individual would be an independent consultant and free to work with whoever they want, whenever they want and would generally be able to decide where and how they provide their services to you.
What are the key terms of a consultancy agreement?
It's important to put an agreement like this in place to ensure that no disputes arise over what a consultant agreed to do for you, the standards or requirements they were expected to meet, when and how they should be paid and who should own the intellectual property rights in anything they create.