What is a Service Agreement?
A Service Agreement is your MOST important legal document. If you only have one contract in your service business, this is it!
A Service Agreement sets out the terms and conditions for a service provider who performs a service for a business or individual. It covers services, fees, payment terms, timeframe and responsibilities. It also includes important legal clauses for liability, intellectual property, confidentiality, dispute resolution and termination.
Service Agreements are very common and can be used in almost any industry.
Your Service Agreement should be tailored to each specific client, detailing the services you are providing to them. A well written agreement will not only provide you with legal protection, it will also help manage your client’s expectations.
Who can use this template?
- Service Providers
- Consultants
- Independent Contractors
- Freelancers
Do I need a contract for my clients?
Yes, absolutely! A contract protects both you and your clients.
You should always have a contract signed before you start a new project.
Putting things in writing protects both parties and gives certainty.
Contracts are about more than wrapping your clients up in red tape and telling them what they can’t do. Think of your contract as relationship insurance: it does all the hard, boring work of keeping the relationship on track, so you can focus on the fun part – the actual business.
Other names for a Service Agreement
- Services Agreement
- Consulting Services Agreement
- Consultancy Agreement
- Terms and Conditions
- Terms of Business
- Client Agreement
- Terms of Engagement
- Contractor Agreement
- Professional Services Agreement
What does this Service Agreement template include?
Our Service Agreement template covers everything you need in the contract:
- Schedule – table with summary of your services (scope, deposit, fees etc) on the first page
- Engagement and Term – acceptance of the agreement, the term of your services
- Scope of Services – the scope of the services you will provide to the client
- Fees and Expenses – how much you will charge, including any additional expenses
- Payment Terms – covers your payment terms, including how you will deal with overdue amounts
- Client Responsibilities, Warranty and Indemnity – what you need the client to do, plus important legal terms to protect you
- Works Standard and No Warranty – guarantee as to due care and skill
- Non-disparagement – protects your reputation
- Promotion – consent to use the client for promotion in your business
- Confidentiality – both parties agree to keep confidential information private
- Intellectual Property – this covers intellectual property rights for the works you create
- Limitation of Liability and Indemnity – to protect you against claims for losses and damages
- Termination – this explains how either party can terminate the agreement
- Refunds and Credit – no refunds (other than as required by Australian Consumer Law), discretion to issue credits
- Dispute Resolution – process to deal with any problems that may arise
- General – standard contract clauses such as Assignment, Severance, Entire Agreement, Waiver and Governing Law
Do service providers need an ABN?
Yes, they do. Service Providers are self-employed individuals or companies. To legally operate as a service provider in Australia you need to register for a Tax File Number (TFN), Australian Business Number (ABN) and in certain circumstances you need to register for Goods and Services Tax (GST).
Does a service provider get paid a fixed fee, or an hourly/daily rate?
It’s up to you to set your pricing and negotiate fees with the client you work for.
For a specific project, the client might like to have the cost certainty of a fixed fee, but for regular work it’s very common for service providers to charge out at an hourly or daily rate.
Some factors that can influence how much you get paid include the length of the project, the skills required to do the job and the scope or size of the project.
Do I get to choose my own deposit amount and payment terms?
Yes, you do!
You can specify a deposit amount as a dollar figure or a percentage of the total estimated fees.
You can also choose your own payment terms to help speed up payments from clients (e.g. 7 days).
Can this Service Agreement template be used by both service providers and businesses hiring them?
Yes, this template is suitable if you are a service provider, or a business looking to hire a service provider. However, if you’re a business hiring an external provider, you may prefer to use an Independent Contractor Agreement as the terms have been drafted to be more favourable for the business.
Can we negotiate on the key terms of the Service Agreement?
You bet!
Before you kick off your project, you should discuss the commercial terms and negotiate a position that both parties are happy with.
Don’t forget to make sure that the terms you have agreed to are reflected in the final contract that both parties sign.
If I subcontract some of my work to other people, can I still use this Service Agreement?
Yes, you can! This Service Agreement allows you to subcontract one or more aspects of the services you provide to the client but requires you to remain the head contractor (meaning that you will remain responsible for the subcontractor’s services).
Is this Service Agreement template legally binding?
Absolutely!
All of our templates have been drafted by qualified Australian lawyers who hold an Australian legal practicing certificate.
We are affiliated with a commercial law firm based in Sydney.
