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What Is a Contract Services Agreement?
A contract services agreement is a document that defines the terms of an agreement between a provider of services and a customer who is requesting a particular service. In order to ensure that all involved parties understand the terms of the agreement and what services will be performed, a written document is essential. Contract services agreements often include details about the scope of the work being done, the cost for the service, and the applicable payment terms.
What Is a Service Provider?
A service provider, also referred to as a freelance worker or contractor, offers a service in exchange for payment. These individuals work across a range of industries to provide crucial services. They may include:
- Web programmers and developers
- Writers and editors
- Public relations and marketing consultants
- Graphic designers
- Makeup artists
- Childcare providers
- DJs and musicians
- Lawyers and attorneys
- Landscapers and yard care providers
- Snow removal providers
- House or business cleaners
Virtually anyone providing a service to another person or company is considered a service provider and can use a contract services agreement to provide details about the services being provided and any applicable terms.
Should Contract Services Agreements Be Made in Writing?
A legally binding and enforceable document is always the best option when creating or entering into a contract service agreement. While verbal agreements can hold up in court, they are generally much more difficult to prove and enforce. If you are a contract services provider or requesting a service from this type of provider, you can protect yourself and gain a better understanding of what to expect from the exchange by using a written contract.
A written contract also allows all parties to outline their expectations and negotiate prior to signing the agreement. Contracts define the scope of the work, the timeline for when services will be rendered, how to handle disputes, and/or the cost of the project and when payment is due. Without an agreement in writing, confusion may arise, and the involved parties may dispute what they perceived the terms to be. In most cases, a contract services agreement can be digitally signed and remain valid and legally enforceable.
A contract services agreement may include the following:
- Name and contact information for all parties in the agreement: Should include the individual or company providing the services outlined as well as the individual or company requesting the services to be performed on their behalf
- Description of service : Also known as the planned scope of work or a description of the services the service provider will provide to the requestor
- Indemnification: The responsibility taken by the service provider for any loss or damages incurred by the requestor as the result of the work provided by the service provider
- Documents: Any related documents, such as designs, drawings, or descriptions of work that relate to the service provided
- Cost: The cost for the service being provided, such as a flat-rate fee or hourly rate, as well as any expenses that may be incurred by the service provider and who is responsible for those expenses
- Payment terms: The required terms of how and when the requestor of the service will pay for the service rendered
- Timeline: The planned timeline for providing the service (may be the date the service is being performed if it can be completed in a single day)
- Change requests: How involved parties can request changes to the terms in the agreement and/or the scope of work or service being performed as well as any cost associated with change requests
- Location or job site (if applicable): The physical location where the services will be rendered to the requestor
- Insurance obligations (if applicable): Details about the insurance policy held by the service provider and what it covers
- Materials and labor (if applicable): Which of the involved parties is responsible for procuring any required materials or paying for labor costs associated with the service
- Permits and licensing (if applicable): Which party is responsible for requesting and obtaining any necessary permits and licensing to complete the service
- License number (if applicable): If the service provider has any type of state-issued license indicating their legal status to provide the service being requested, the license number may be included in the agreement
- Warranty coverage (if applicable): Whether the service provider offers warranty coverage on the service provided as well as the time period for which the warranty is valid
Can a Contract Services Agreement Be Canceled?
Some contract services agreements will include details about cancellation terms and when the agreement can be canceled as well as whether any fees or fines apply. If either party violates the terms of the agreement and cannot work it out amicably or amend the existing agreement to accommodate the changes needed, legal action may be an option. Some contract services providers include details about how disputes will be handled within their agreements, such as through mediation, adjudication, or arbitration.
Image via Unsplash by sctgrhm
Sample Contract Services Agreement
This contract services agreement (the “Agreement”) has been entered into on the 18 day of April 2020, by and between Emily Miller (the “Client”) and Robert Johnson (the “Contractor”).
3297 W. State Street
Salt Lake City, Utah 84015
2395 N. Run Road
Atlanta, Georgia 28583
Whereas, Client is of the opinion that Contractor has the necessary abilities, experience, and qualifications to provide services to the client, and
Contractor agrees to provide such services to Client as set forth by the terms and conditions in this contract services agreement (the “Agreement”).
In consideration of the background described above and of the obligations and mutual benefits set forth in the Agreement, the receipt and sufficiency of which consideration has been acknowledged, the Client and Contractor agree to the following terms:
Services Provided: Contractor shall provide Client with the following services (the “Services”):
- Management of social media sites (Facebook page, Instagram page, LinkedIn page)
- Creation of social media posts, including written content and graphics
- Response to any social media inquiries, comments, and other contact
The Services may also include any other tasks upon which the Client and Contractor mutually agree.
Timeline: The Agreement will begin on 18 April 2020 and remain in effect until 18 October 2020, unless the Agreement is extended.
Cost: Client agrees to pay Contractor a flat rate for the work in the total amount of $6,000 USD (the “Contract Price”).
Cost is subject to additions or deductions in accordance with any mutually agreed upon modifications or changes to the work. Any expenses incurred by Contractor must be approved in advance by Client and submitted via invoice for payment in addition to the flat-rate cost.
Payment Terms: Payment for this work will be made monthly via check on the first of each month, beginning on 1 May 2020.
Non-Exclusivity: Both Client and Contractor acknowledge that this agreement is not exclusive and both parties are free during and after the contract term to contract with other parties to provide similar services.
Here are additional samples of contract service agreements.
Whether you're entering into a contract services agreement as the provider of service or the client requesting the service, understanding the language can help you know what you're agreeing to and gain the legal protection needed to move forward in this type of arrangement. If you need help drafting a contract services agreement, an experienced contracts lawyer can assist you. Here is a link to find contracts lawyers near you.
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