Service Contract Templates

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Updated October 26, 2022

A service contract is used between a service provider and their client. 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 someone who 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 close attention to detail from both parties to ensure that all the terms and conditions of the agreement are clear. Once signed by both parties, 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.

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

client and provider negotiating on price

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

provider meeting with clients to discuss 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 allow either party to terminate with sufficient notice.

Sample

SERVICE CONTRACT

1. The Parties. This Service Contract (“Agreement”) made [DATE], is by and between:

Service Provider: [NAME] with a mailing address of [ADDRESS] (“Service Provider”), and

Client: [NAME] with a mailing address of [ADDRESS] (“Client”).

Service Provider and Client are each referred to herein as a “Party” and, collectively, as the “Parties.”

NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual promises and agreements contained herein, the Client hires the Service Provider to work under the terms and conditions hereby agreed upon by the Parties:

2. Term. The term of this Agreement shall commence on [DATE] and terminate: (check one)

At-Will: Written notice of at least [#] days’ notice.

End Date: On [DATE].

Other: [OTHER].

3. The Service. The Service Provider agrees to provide the following: [DESCRIBE].

Hereinafter known as the “Service.”

The Service Provider shall provide, while performing the Service, that he/she/they shall comply with the policies, standards, and regulations of the Client, including local, State, and Federal laws and to the best of their abilities.

4. Payment Amount. The Client agrees to pay the Service Provider the following compensation for the Service performed under this Agreement (check one):

– $[#] / Hour

– $[#] / per Job. A “Job” is [DESCRIBE].

– Other: [DESCRIBE].

Hereinafter known as the “Payment Amount”.

. The Client shall pay the Payment Amount: (check one)

– When Invoiced

– Daily

– Weekly

– Bi-Weekly

– Monthly

– Other: [DESCRIBE].

Hereinafter known as the “Payment Method.” The Payment Amount and Payment Method collectively shall be referred to as “Compensation.”

6. Retainer. This Agreement requires: (check one)

A Retainer. Client agrees to pay a retainer in the amount of $[#] to the Service Provider as an advance on future Services to be provided. (check one)

– Retainer is refundable.

– Retainer is non-refundable.

No Retainer. The Client is not required to pay a retainer before the Service Provider is able to commence work.

7. Inspection of Services. Any Compensation shall be subject to the Client inspecting the completed Services of the Service Provider. If any of the Services performed by the Service Provider pursuant to this Agreement are defective or incomplete, the Client shall have the right to notify the Service Provider, at which time the Service Provider shall promptly correct such work within a reasonable time.

8. Return of Property. Upon the termination of this Agreement, all property provided by the Client, including, but not limited to, cleaning supplies, uniforms, equipment, and any other items must be returned by the Service Provider. Failure to do so may result in a delay in any final payment made by the Client.

9. Time is of the Essence. Service Provider acknowledges that time is of the essence in regard to the performance of all Services.

 10. . Service Provider acknowledges and agrees that all financial and accounting records, lists of property owned by Client, including amounts paid, therefore, client and customer lists, and any other data and information related to the Client’s business is confidential (“Confidential Information”). Therefore, except for disclosures required to be made to advance the business of the Client and information which is a matter of public record, Service Provider shall not, during the term of this Agreement or after its termination, disclose any Confidential Information for the benefit of the Service Provider or any other person, except with the prior written consent of the Client.

  • Return of Documents. Service Provider acknowledges and agrees that all originals and copies of records, reports, documents, lists, plans, memoranda, notes, and other documentation related to the business of the Client containing Confidential Information shall be the sole and exclusive property of the Client and shall be returned to the Client upon termination of this Agreement or upon written request of the Client.
  • Injunction. Client agrees that it would be difficult to measure damage to the Client’s business from any breach by the Service Provider under this Section; therefore, any monetary damages would be an inadequate remedy for such breach. Accordingly, the Service Provider agrees that if he/she/they should breach this Section, the Client shall be entitled to, in addition to all other remedies it may have at law or equity, to an injunction or other appropriate orders to restrain any such breach, without showing or proving actual damages sustained by the Client
  • No Release. Service Provider agrees that the termination of this Agreement shall not release him/her/they from the obligations in this Section.

11. Taxes. Service Provider shall pay and be solely responsible for all withholdings, including, but not limited to, Social Security, State unemployment, State and Federal income taxes, and any other obligations. In addition, Service Provider shall pay all applicable sales or use taxes on the labor provided and materials furnished or otherwise required by law in connection with the Services performed.

12. Independent Contractor Status. Service Provider acknowledges that he/she/they are an independent contractor and not an agent, partner, joint venture, nor an employee of the Client. Service Provider shall have no authority to bind or otherwise obligate the Client in any manner, nor shall the Service Provider represent to anyone that it has a right to do so. Service Provider further agrees that in the event the Client suffers any loss or damage as a result of a violation of this provision, the Service Provider shall indemnify and hold harmless the Client from any such loss or damage.

13. Safety. Service Provider shall, at his/her/their own expense, be solely responsible for protecting its employees, sub-Service Providers, material suppliers, and all other persons from risk of death, injury or bodily harm arising from or in any way related to the Services or the site where it is being performed (“Work Site”). In addition, Service Provider agrees to act in accordance with the rules and regulations administered by federal law and OSHA. Service Provider shall be solely responsible and liable for any penalties, fines, or fees incurred.

14. Alcohol and Drugs. Service Provider agrees that the presence of alcohol and drugs are prohibited on the Work Site and while performing their Services. If the Service Provider or any of their agents, employees, or subcontractors are determined to be present or with alcohol or drugs in their possession, this Agreement shall terminate immediately.

15. Successors and Assigns. The provisions of this Agreement shall be binding upon and inured to the benefit of heirs, personal representatives, successors, and assigns of the Parties. Any provision hereof which imposes upon the Service Provider or Client an obligation after termination or expiration of this Agreement shall survive termination or expiration hereof and be binding upon the Service Provider or Client.

16. Default. In the event of default under this Agreement, the defaulted Party shall reimburse the non-defaulting Party or Parties for all costs and expenses reasonably incurred by the non-defaulting Party or Parties in connection with the default, including, without limitation, attorney’s fees. Additionally, in the event a suit or action is filed to enforce this Agreement or with respect to this Agreement, the prevailing Party or Parties shall be reimbursed by the other Party for all costs and expenses incurred in connection with the suit or action, including, without limitation, reasonable attorney’s fees at the trial level and on appeal.

17. No Waiver. No waiver of any provision of this Agreement shall be deemed or shall constitute a continuing waiver, and no waiver shall be binding unless executed in writing by the Party making the waiver.

18. Governing Law. This Agreement shall be governed by and shall be construed in accordance with the laws in the State of [STATE].

19. Severability. If any term, covenant, condition, or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

20. Additional Terms & Conditions. [DESCRIBE]

21. Entire Agreement. This Agreement constitutes the entire agreement between the Parties to its subject matter and supersedes all prior contemporaneous agreements, representations, and understandings of the Parties. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all Parties.

IN WITNESS WHEREOF, the Parties hereto agree to the above terms and have caused this Agreement to be executed in their names by their duly authorized officers.

Client’s Signature _______________________ Date [MM/DD/YYYY]

Print Name _______________________

Service Provider’s Signature _______________________ Date [MM/DD/YYYY]

Print Name _______________________