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What is a Service Agreement?

A service agreement is a contract between one person (Supplier) and another (Client) to render services for a specific period of time in exchange for remuneration. It is also known as a Contractor Agreement which governs the relationship of the supplier and client. It sets down the terms and conditions over which the services are delivered and paid.

In the normal course of business, the client would issue a request for proposal in which case a supplier issues the proposal. Consequently, the client may reject or accept the proposal by providing purchase orders. 

If the supplier agrees to provide the services, a service agreement is expected. But don’t get this wrong. A service agreement protects both parties.  It ensures that the supplier performs the work while the client pays for the services. If you need a general service agreement we have a template below, or you can create your own using free software at Law Depot.

What to include in your Service Agreement

Service agreements vary depending on a lot of factors but most agreements normally contain the following common clauses.

  • Confidentiality – Neither party may disclose confidential information of one another. Consequently, a service agreement should also have a definition of terms in which the parties set out what is considered as confidential information.
  • Term – The length of time over which the supplier continues to provide services.
  • Delivery of services – An agreement by the supplier to render services or provide products during the whole duration of the service agreement.
  • Inspection and testing – The supplier agrees that the client can examine and conduct testing on any aspect of the services.
  • Intellectual property – The Client generally owns the intellectual property and no transfer or right or ownership will happen between the parties.
  • Dispute Resolution – The parties will agree on how the contract should be construed, what law to follow, and which jurisdiction they’ll submit in case of dispute and legal proceedings.
  • Indemnities – The parties acknowledges that they may compensate one another in case of losses, damages, or liabilities.
  • Liability – A provision as to how much shall either of the parties be liable in case of breach of the agreement.
  • Termination – Different ways to terminate the agreement such as by written notice or termination upon breach of agreement.

Why You Need Legal Help When Drafting a Service Agreement

Like all other contracts a service agreement needs to comply with state laws, which is why it is more beneficial if you have your agreement drafted by a counsel.  

A counsel can help ensure that your service agreement adequately address liability in case the client suffers loss or vice versa.  A well-drafted service agreement should be complete in form and should address the liability of parties in case of loss or damages. You can use our general template below, or create your own utilizing Law Depot’s free tools.

Advantages of Service Agreements

A service agreement is fundamental to your success. It ensures you are legally protected and gives you the peace of mind that if anything happens you can turn on to your agreement and enforce a certain provision.

This is why it is also important that your service agreement clearly expresses your contractual obligations. Such clarity will provide better certainty to parties involved and minimize disputes and litigation.

Service Agreement Template

Download the Microsoft Word Version of this document below, it typically formats better.

Or you can create a Do-it-yourself Service Agreement using Law-Depot’s services

SERVICE AGREEMENT

This general service agreement is entered (the “Agreement”) is entered into by the (    Client’s Complete Name    ) (herein referred to as the Client) and (     Contractor’s Complete Name    ) herein referred to (the Contractor) on this     (date    ) day of (     month    ), (     year    ).

I. BACKGROUND:

  1. The client is of the opinion that the contractor possesses the necessary qualification, skills, and experience to provide services to the Client.
  2. The Contractor agrees to provide the services to the Client on the terms and conditions of this agreement.

IN CONSIDERATION OF the matters described above and of the mutual benefits and obligations, the Client and the Contractor agree as follows:

II. SERVICES PROVIDED:

  1. The Client hereby agrees to engage to Contractor to deliver the following services:

(   List the various specific services that the Contractor agrees to deliver   )

III. TERM:

The present Agreement shall begin on the date of this agreement and shall remain in force and effect until the services are completed. The Client may extend the services further with the written consent of the Contractor.

IV. COMPENSATION

The Contractor shall be given (rate per hour or flat rate) in (currency) as his remuneration for the services every (date of the month/ or end of the project). In this regard, the Contractor shall deliver invoices accordingly. In the event of prior-termination, the Contractor shall receive his compensation pro rata provided that the services are partially delivered.

V. REIMBURSEMENT

The Client agrees to reimburse the Contractor for the expenses incurred for the completion of the project, provided that the latter can substantiate the same.

VI. CONFIDENTIALITY

Each party undertakes in respect of Confidential Information for which it is the recipient: to treat such Confidential Information disclosed by the disclosing party as confidential. Confidential Information (the “Confidential Information”) shall include any data or information, written or oral, whether business or personal, which would reasonably be considered private or proprietary to the Client and that, is not generally known to the public, and which release could cause irreparable harm to the Client.

VII. OWNERSHIP OF INTELLECTUAL PROPERTY

Nothing contained in this Agreement shall be deemed by implication or otherwise to transfer any intellectual property rights owned by the Client Party to the Contractor. The Contractor recognizes that all intellectual property rights and know-how related to the Confidential Information of the Client shall remain the property of Client or its suppliers.

VIII. RETURN OF PROPERTY

Upon termination or expirations of this Agreement or earlier on the Client’s request, the Contractor shall deliver all items containing any Confidential Information to the Client or make such other disposition thereof as the Client may direct.

IX. CAPACITY OF THE CONTRACTOR

In entering into this Service Agreement, the Contractor acknowledged and expressly agreed that he or she is acting as an Independent Contractor and not as an employee. Neither the discussions taking place between the parties nor the exchange of material or information shall be deemed to create any partnership, agency or other relationship, between the parties or to create or impose on either party an obligation to enter into any other agreement with the other party or prohibit either party from entering into discussions and agreements with third parties except as otherwise provided in this Agreement. Nothing in this agreement should be understood to oblige the parties to enter into future agreements unless otherwise expressly stated herein or agreed in writing in another document.

X. NO EXCLUSIVITY

The parties acknowledge that this Agreement is non-exclusive and that either party will be free during and after the Term to engage with another contract with third parties.

XI. INDEMNIFICATION

Agreement the Contractor agrees now for then to indemnify and hold harmless the Client from and against any damages, losses, costs, expenses (including legal and judicial expenses) the Client may incur, as well as from and against any third party’s claims and actions, arising from, or however connected with, the breach of the obligations and undertakings provided for herein.

XII. ASSIGNMENT

This Agreement may not be assigned without the prior written consent of the other PARTY.

XIII. JURISDICTION

This Agreement shall be governed by and construed in accordance with United States Law and shall be subject to the exclusive jurisdiction of the [County Court].

XIV. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereto and supersedes any and all prior arrangements and agreements between the parties.

XV. SEVERABILITY

In case any provision of this Agreement is invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby

This SERVICE AGREEMENT shall be binding upon the signatures of the parties:

[Client 1]

_________________________________ ______________

[NAME], [TITLE]                                       DATE

[Contractor 2]

_________________________________ ______________

Master Service Agreement Downloadable Microsoft Word File

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Sample Completed Service Agreement

You can use download the Microsoft Word version here for better formatting

SERVICE AGREEMENT

This general service agreement is entered (the “Agreement”) is entered into by the     Spencer Rodriguez     (herein referred to as the Client) and      Bellamy Heinz     herein referred to (the Contractor) on this 14th day of November, 2020.

I. BACKGROUND:

  1. The client is of the opinion that the contractor possesses the necessary qualification, skills, and experience to provide services to the Client.
  2. The Contractor agrees to provide the services to the Client on the terms and conditions of this agreement.

IN CONSIDERATION OF the matters described above and of the mutual benefits and obligations, the Client and the Contractor agree as follows:

II. SERVICES PROVIDED:

  1. The Client hereby agrees to engage to Contractor to deliver the following services:

Bank Software Sales and Installation

III. TERM:

The present Agreement shall begin on the date of this agreement and shall remain in force and effect until the services are completed. The Client may extend the services further with the written consent of the Contractor.

IV. COMPENSATION

The Contractor shall be given two-thousand five-hundred dollars ($2,500) in USD as his remuneration for the services by the end of the project. In this regard, the Contractor shall deliver invoices accordingly. In the event of prior-termination, the Contractor shall receive his compensation pro rata provided that the services are partially delivered.

V. REIMBURSEMENT

The Client agrees to reimburse the Contractor for the expenses incurred for the completion of the project, provided that the latter can substantiate the same.

VI. CONFIDENTIALITY

Each party undertakes in respect of Confidential Information for which it is the recipient: to treat such Confidential Information disclosed by the disclosing party as confidential. Confidential Information (the “Confidential Information”) shall include any data or information, written or oral, whether business or personal, which would reasonably be considered private or proprietary to the Client and that, is not generally known to the public, and which release could cause irreparable harm to the Client.

VII. OWNERSHIP OF INTELLECTUAL PROPERTY

Nothing contained in this Agreement shall be deemed by implication or otherwise to transfer any intellectual property rights owned by the Client Party to the Contractor. The Contractor recognizes that all intellectual property rights and know-how related to the Confidential Information of the Client shall remain the property of Client or its suppliers.

VIII. RETURN OF PROPERTY

Upon termination or expirations of this Agreement or earlier on the Client’s request, the Contractor shall deliver all items containing any Confidential Information to the Client or make such other disposition thereof as the Client may direct.

IX. CAPACITY OF THE CONTRACTOR

In entering into this Service Agreement, the Contractor acknowledged and expressly agreed that he or she is acting as an Independent Contractor and not as an employee. Neither the discussions taking place between the parties nor the exchange of material or information shall be deemed to create any partnership, agency or other relationship, between the parties or to create or impose on either party an obligation to enter into any other agreement with the other party or prohibit either party from entering into discussions and agreements with third parties except as otherwise provided in this Agreement. Nothing in this agreement should be understood to oblige the parties to enter into future agreements unless otherwise expressly stated herein or agreed in writing in another document.

X. NO EXCLUSIVITY

The parties acknowledge that this Agreement is non-exclusive and that either party will be free during and after the Term to engage with another contract with third parties.

XI. INDEMNIFICATION

Agreement the Contractor agrees now for them to indemnify and hold harmless the Client from and against any damages, losses, costs, expenses (including legal and judicial expenses) the Client may incur, as well as from and against any third party’s claims and actions, arising from, or however connected with, the breach of the obligations and undertakings provided for herein.

XII. ASSIGNMENT

This Agreement may not be assigned without the prior written consent of the other PARTY.

XIII. JURISDICTION

This Agreement shall be governed by and construed in accordance with United States Law and shall be subject to the exclusive jurisdiction of the Courts of Randall County.

XIV. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereto and supersedes any and all prior arrangements and agreements between the parties.

XV. SEVERABILITY

In case any provision of this Agreement is invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby

This SERVICE AGREEMENT shall be binding upon the signatures of the parties:

[Client 1]

_________________________________ ______________

[NAME], [TITLE]                                       DATE

[Contractor 2]

_________________________________ ______________

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