How To Write a Simple Service Agreement

What Is a Service Agreement?

A simple service agreement, or contract for services, is a type of business contract that states the terms and conditions for a service provided between two parties. Service agreements are most often used for consulting services and freelancers. For example, a graphic designer or a web developer for a company will want a contract to specify the work scope and deliverables as well as their compensation, among other things. An independent contractor will want to use a consulting agreement for professional services to define the specific service offered and compensation - whether that be a flat fee or hourly rate.

Why You Should Use a Service Agreement

A written service agreement protects both parties involved in a service transaction. Defining rights and responsibilities in the agreement promotes a better working relationship because both parties know what to expect and avoid future conflicts. For example, a service agreement may have a specific time frame for completion.

Additionally, a service agreement protects your business. You can add a non-disclosure or confidentiality clause to protect your confidential information. Or an indemnification clause to determine which party will bear the risks if there is a loss, damage, or liability.

A service agreement helps with conflicts and dispute resolution. You can include an arbitration clause to avoid expensive and lengthy court battles. Finally, a services agreement conveys your professionalism and builds trust with your customers.

What To Include in a Service Agreement

There are general laws on how to make a contract enforceable, such as having legal capacity. States may have their own rules, so follow applicable laws. When creating a services agreement, you should include the following:

• The identification of the parties involved with contact information, such as addresses, emails, and phone numbers.

• The scope of services with a detailed description of the services to be provided and any metrics needed to show complete work.

• The payment terms, including payment details such as compensation, payment schedule (i.e., installments), and method of payment. 

• The effective date of when the work begins and an end date (if applicable).

• Any termination conditions that could result in the end of services, such as late payments.

• The governing law or state jurisdiction under which laws will govern the agreement.

You may want to consider adding:

• Any confidentiality or non-disclosure agreements to protect sensitive information, trade secrets, or intellectual property rights.

• Any liability or indemnification clauses regarding responsibility for damages or losses. 

• Any warranties and remedies to correct any problems with performance.

If you are a freelancer or independent contractor, you may want to include a statement that the service provider is an independent contractor and not an employee. In some situations, a service provider may only have one corporate client. That corporate client does not want to be liable if the service provider is somehow deemed an employee. 

How to Draft Your Service Agreement  

Before you create your agreement you should gather the details of your business relationship and what you want to include in your entire agreement. Be sure to:

• Identify the parties involved 

• Define the scope of services 

• Set forth payment terms 

• Outline the responsibilities of each party 

• Add termination, dispute resolution, and other essential clauses 

Use clear and concise language and review the terms of this agreement with the other party before signing. All the parties should sign and date the agreement. Check your state’s laws about the use of e-signatures first before using them.

Once you've drafted one service agreement for a particular service, you can use it with other parties to streamline your contract management.

Use Our Free Service Agreement Template as a Guide 

You can customize this sample service agreement for your purposes:

After Creating Your Service Agreement 

Once both parties sign the agreement, you should keep the original and give a copy to the other party. If you want to make changes in the future, you could draft an amendment to your original contract.

If you still have questions or would like to speak to an experienced local business lawyer, our lawyer directory can help you find one. 

Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.