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Updated August 12, 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

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 allows 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, bbin电竞官网官方永久, 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”.

5. Payment Method . 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. Confidentiality . 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, bbin电竞官网官方永久 unemployment, bbin电竞官网官方永久 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 bbin电竞官网官方永久 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 _______________________

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) bbin电竞官网官方永久 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.