Service Contract Templates

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Updated June 17, 2022

A service contract is between a client that agrees to hire a service provider for work. Under such employment, the service provider will be acting as a 1099 independent contractor and under an at-will arrangement. This allows either party being able to terminate with sufficient notice.

Federal Law (29 CFR § 4.1a(h)) – For all contracts over $2,500 in value, a service provider is obligated to pay their employees the minimum wage in the locality where the services are being provided (prevailing wage).

By Type (14)

Table of Contents

What is a Service Provider?

A service provider is a party that agrees to provide a type of labor-related work in exchange for a fee. The amount paid to the service provider is by the hour ($/hour) or per project. The payment amount the service provider charges is usually in accordance with the average pay for their specific industry.

How to Create a Service Contract (3 steps)

Writing a service contract requires that there is already a verbal agreement in place and converting it to a written document. The contract is between the client and service provider and upon both their signature the contract becomes legally binding.

Step 1 – Review the Other Party

In most service contracts, there is no background check or consumer report generated on the service provider. Although, it’s best to search their name on Google and find reviews on the individual or company.

If they have had any issues in the past, they will most likely show up somewhere on the internet. The client is also recommended to search public directories, such as the local court dockets, to see if there is any past litigation against the service provider.

Both parties should take the necessary steps to ensure the services are done in a professional manner and that the provider will be paid on time.

Step 2 – Negotiate the Services

Depending on the service type, the client and provider may have to negotiate back-and-forth on the price. Both parties are recommended to use online resources to view the average rate ($/hour) for a specific service.

View Average Pay ($/hr)

After the service has been negotiated a contract may be created.

Step 3 – Writing the Service Contract

When creating the contract, it’s important to describe the services, pay, schedule (if any), start and end dates, and any other terms agreed by the parties. Depending on the contract amount, the parties may want to seek legal advice from an attorney. Once the contract has been finalized it’s time to have both parties authorize the agreement.

Retainer – Mainly for professional and consulting work, a retainer allows the provider to be paid a small amount at the time of signing that gets applied to future balances.

Notary Public – Recommended being signed in the presence of a notary public if the contract is for more than $10,000.

How to Terminate

A service contract may be terminated by written notice at any time. Most service contracts do not have a required end date and commonly allows either party to terminate with sufficient notice.

How to Write

Download: Adobe PDF, MS Word (.docx), OpenDocument

I. Service Contract Parties

(1) First Date Of Effect. Begin Section I by supplying a record of the date when this agreement can be considered in effect and actively obligating both the Service Contractor and the Client to its terms and its conditionsr.

(2) Service Provider Name. The Service Provider in this agreement will be the Party or Entity that shall agree to complete the tasks required for a defined project in exchange for a predetermined amount of money. Furnish the full name of this Party who shall be hired for this project or job on the line attached “Service Provider.”

(3) Service Provider Address. Supply the mailing address where the Service Provider wishes to receive his or her business mail.

(4) Client Name And Address. The Client in this agreement shall be the Party or Entity that shall pay the above Service Provider for the tasks requiring completion. Furnish the name of the Client who shall pay the Service Contractor on the first line of the area bearing the “Client” label then, place the Client’s mailing address on the next empty line.

II. Term Of Service

(5) Agreement Start Date. The calendar date that prompts the agreement to officially go in effect should be documented on the formatted lines in the statement made by Section II.

(6) At-Will Termination. If this agreement shall continue to be effective until either Party decides it should be terminated, then the first checkbox statement in Section Two should be selected. Naturally, since the sudden termination of such an agreement can become costly to the remaining Party, a minimum number of days prior to a desired termination date should be set for this option by furnishing this minimum number of days’ notice to the space on display.

(7) End Date Of Agreement. If the Client and the Service Provider have determined that this agreement should end or terminate automatically as of a predetermined date, then the second checkbox in Section Two should be selected. Additionally, the predetermined date for this termination must be defined in the formatted space(s) supplied by this statement.

(8) Other Method Of Termination. While the previous choices will define how the majority of Service Providers and their Clients prefer their agreement to end or terminate, some may prefer a to place more stringent circumstances or allow certain liberties to be applied for the conditions or terms of termination . In either case, submit a mark to the box labeled “Other” and continue with definition of  the conditions, circumstances, requirements, or term(s) needed to define how or when this agreement should naturally terminate.

III. The Service

(9) Hired Service. The work the Service Provider is being hired (through this agreement) to perform for the Client should be well-defined before this contract is signed. Accomplish this task by listing all duties, obligations, functions, or products the Client expects in Section III.

IV. Payment Amount

(10) Hourly Wage. The payment that should be expected by the Service Provider in exchange for the work this agreement requires will need to be defined. A brief set of choices will allow this definition to be attached to this contract. The first checkbox of this list gives the option of an hourly wage. To set an hourly wage as payment to the Service Provider, select the first checkbox statement in Section IV and report the exact dollar amount the Service Provider may expect for every hour of work under the conditions of this agreement.

(11) Payment By Project. If the Service Provider will be paid by the project or the assignment, then select the “Per Job” checkbox. This selection seeks an entry for the amount of money that must be paid to the Service Provider for each job as well as how a project or “Job” should be defined. Note that since some Clients may have an extensive list of jobs with different payments, an attachment may be developed and cited on the blank line provided (i.e. “See Exhibit A”).

(12) Other Type Of Payment. If the payment the Service Provider should receive from the Client cannot be defined by the above options, then choose the “Other” checkbox by placing a mark in it. Once done, furnish a detailed report on how the pay rate of the Service Provider will be calculated.

V. Payment Method

(13) Submission Of Payment. The Fifth Section presents a basic checklist allowing for the frequency or schedule of payment for the Service Provider to be defined. Only one of the choices here may be selected. Therefore, if this agreement is meant to obligate the Client to deliver payment to the Service Provider whenever the Client submits an invoice, then the first checkbox should be marked. If this is not the case, the first checkbox should be left unmarked and the remaining options should be reviewed.

(14) Predetermined Pay Period. Quite a few Clients will prefer to submit payment according to a schedule. Section V presents several options to enact such a schedule therefore, mark one checkbox from the choices provided (“Daily,” “Weekly,” “Bi-Weekly,” “Monthly”) to indicate how often the Service Provider should expect payment as per this agreement. For instance, if the Client will pay the Service Provider once every two weeks, then the “Bi-Weekly” checkbox should be selected.

(15) Other. If the previous options in Section V do not adequately describe when payment will be submitted to the Service Provider, then the “Other” checkbox will require selection. In addition to making this choice, the blank line in this option must be provided with a description of precisely when the Client will pay the Service Provider.

VI. Retainer

(16) Retainer For Service. If the Client and Service Provider both agree that a retainer should be set in place then the checkbox labeled “A Retainer” should be marked. This can be found in Section VI and will require that the dollar amount of the retainer be entered to the space attached to the dollar symbol.

(17) Retainer Refund Status. If a retainer is put in place through this agreement, then the potential for a refund for this retainer must be discussed. For this task, an additional choice is presented. Place a mark in the “Retainer Is Refundable” checkbox if the Client may expect a refund of the retainer amount in the event this contract is violated by the Service Provider or terminates. If the “Retainer Is Non-Refundable” then select the second statement in this option.

(18) No Retainer. If the Service Provider does not require a retainer and this will not be volunteered by the Client in this document, then mark the checkbox “No Retainer.”

XVII. Governing Law

(19) State Laws. The Courts that will hold jurisdiction over any disagreements arising from this contract and whose laws this paperwork must adhere to should be named in Section XVIII.

XX. Additional Terms And Conditions

(20) Remaining Agreement Requirements. In order for the contract made (above) between the Client and Service Provider to function in a manner that is both predictable and adherent to their agreed-upon expectations, every topic that has been discussed and agreed upon between these two Parties must be accurately reflected by the content of this agreement before their binding signature may be submitted. Thus, if any topics or agreements have been left out in the above contract, then such “Additional Terms And Conditions” must be documented in Section Twenty. If necessary, an attachment may be furnished if more room is required or if additional (supporting paperwork) should be included in this document. Any attachment made should be adequately titled, permanently affixed to this document, and cited by title in Section XX.

Signature Execution

(21) Client’s Signature. The signature of the Client will obligate him or her to the conditions of this agreement for the specified term(s). Therefore, it is recommended that an adequate amount of time is set aside so that both Signature Parties may review this paperwork to satisfaction. When ready, the Client or the Authorized Signature Representative of the Client must sign this document then produce the current date.

(22) Printed Name Of Client. After signing this agreement, the Client must furnish the printed version of his or her name to the remaining line in his or her signature area.

(23) Service Provider’s Signature. The next signature area will call for the Service Provider named in the First Section to accept the conditions and terms of this agreement by signing his or her name and documenting when he or she performed this action by entering the date of signing.

(24) Service Provider Printed Name. The Service Provider must print his or her name upon signing and dating this agreement.