A service contract is usually a formal agreement between a client and a service provider. Furthermore, it states the terms and conditions of the type of work to be accomplished. In most cases, service providers refer to contractors across multiple industries, especially from vehicle maintenance to logistics to pest control. Most people use service contracts when the terms of the job require a comprehensive explanation.
In addition, a service contract can be utilized for both ongoing work or even one-off jobs. However, it all depends on the nature of your client’s job. On the other hand, a service contract includes your potential contractor and client’s contact information, assurances, service price as well as the job description. Keep reading to familiarize yourself with the service contract template.
What is a Service Contract?
A service agreement is a contract between the client and the service provider, and it outlines the exchange of services for compensation. In addition, it describes services terms and entails the client and contractor contact information, assurances, charges for the service, and work description.
What Is a Service Contract Template?
A service contract template is a blank document where the client and contractor must make their contract and outline the compensation services.
Service Contract Templates & Examples
Which Service Providers Should Use a Service Agreement?
Anyone who provides services to a customer is a service provider. However, not all service providers use the service agreement. Below are a few service providers using the service agreement:
- Writers and editors
- Web developers
- Contractors and construction companies
- Public relation specialists
- Legal service providers
- Graphic designers
- Dog walkers
- Child care providers
Essential Elements of a Service Contract Template
Below are essential elements of a service contract template:
A service contract must have a section featuring what the service provider will be offering the client. Here, the service provider must clearly show what the customers will acquire. However, this also sets boundaries between the client and the contractor by lowering their expectations. To correctly list your services, you must understand the kind of job you will be handling via asking queries and listening to the responses from your clients as you find out their goals.
A service contract template should feature the amount you charge and the due date. State the date you would love to be paid after the client has received your invoice, either after 8 or 28 days. Ensure that this is clear on your contract agreement.
Clients are usually interested in seeing when you want to commence the project. Thus, creating a start date shows your availability to meet the client’s needs. You can ask the client when they are likely to wish the job completed before setting the ideal timeline.
Sometimes, clients and contractors need to part ways for several reasons when running projects. Hence each party must agree on termination terms in the contract. Here, you need to consider the adequate notice period and how you will get your outstanding payment during termination.
Without a signature, a contract agreement is not legally binding. Moreover, signatures act as legal proof that service providers and clients accept and acknowledge service agreement terms. Ideally, you should not start any work if there is no signature to avoid unnecessary disputes.
How to Write a Service Contract Template?
You might be knowing the service contract template, but do you have an idea of how to write a service contract template? If you have no idea, here is an overview of the steps that will guide you write a service contract template:
Step 1- Indicate the duration the services are required
It is crucial to commence your service contract by indicating the contractors’ duration to offer their services. The contract usually varies and can be indefinite, whereby the service provider can be required to provide their services for as long as the work is running. It can also be for a fixed term with a detailed completion date or a single job with no completion date.
Step 2- Entail the State where the work is likely to take place
Each State usually features labor laws, which vary from others. Therefore, ensure you include the State where the work will be scheduled. By doing this, the LawDepot will get a chance to customize your service contract to match the local laws of that specific state.
Note: The Service Contract Act of 1965 states that any contract exceeding $2, 500 service providers, must ensure that their employees get a minimum wage during payment.
Step 3- Describe the kind of service to be offered
When writing a service contract, ensure that you include what you need the service provider to do for a specific duration of the agreement. You must understand that a comprehensive service description minimizes a misunderstanding risk. Likewise, a service description offers a client and contractor a perfect idea of the results.
Step 4- Offer the client’s and contractor’s information
Your service contract should incorporate the contact information of the client and the contractor. Do not forget to indicate whether every party is an organization or individual and State their addresses and names. Furthermore, you can list at least four clients and contractors in your service contract template. Contact information is essential is crucial for communication.
Step 5- Outline compensation
Before outlining compensation, there are numerous factors you must consider when deciding how you will exchange compensation, including non-performance consequences, late payment interest, payment schedule, sale tax as well as the pay rate.
Ensure that the outline for compensation incorporates a specific time frame indicating how long clients need to pay their contractors after getting the invoice. For example, 15- 30 days is enough duration to pay an invoice. If the client does not pay within the specified time frame, the contractor will likely apply a late payment interest rate.
Unpaid late fee sum annually goes up to 25%. Likewise, Usury laws do not encourage excess interest rates. Luckily, an interest rate beyond the maximum rate accepted by State law is never enforceable.
State when the client will make payments to their contractor. This also depends on the duration of the contract. Furthermore, one-time work is paid when the job is accomplished. You must know construction contracts with higher value usually feature a customized payment schedule depending on different work stages. Finally, open-ended contracts without fixed end dates have periodic payment and invoicing.
If the deposit is part of your contract, ensure you indicate the amount required before the job commences because it acts as job security for the contractor delivering services. It should be 10- 50% of the sum contract amount, depending on the financial stability and trustworthiness of the client.
Your service contract should have a sum of what your service provider will offer for the job. On the other hand, you need to decide on the rate your service provider will cost you and the sum payment, indicating whether the amount will entail sale tax. Suppose the client and contractor agree on varying payment methods, talk about the compensation.
Step 6- State agreement terms
This must engulf the terms and conditions of a working relationship between the client and contractor. It can be done in three different stages;
Here, you can opt to include terms addressing confidentiality. However, confidentiality also depends on whether the customer wishes to protect sensitive information concerning their businesses or even themselves.
A contractor must be innovative when called upon to perform specific duties. This section must specify who will pose intellectual property generated during the service between the client and the contractor.
Contractors sometimes must use their money to progress when running a project, such as a hotel accommodation or traveling capital. Make sure you state in the agreement if the client reimburses the contractor, more so for work-related expenses.
Step 7- Include any given extra clauses
Most people love this section because they can use it to address certain factors, such as legal expenses, liability, return of the property, and indemnity, but it is optional. Bear in mind that the LawDepot’s Agreement supports this step.
Step 8- Talk in detail about signing
Create a date the parties will sign the service contract and mention if the witnesses are included. Suppose you are not sure; you can give the date later because space will be at the bottom of the agreement.
Types of Service Contract
There are 14 types of service contract templates, and the client and the service provider usually agree on each one. These service contract templates include:
- Snow removal
- Lawn care
- Delivery driver
- Legal services
Service providers usually use it to perform various services to clients.
A service contract can be terminated via written notice at any given time. Furthermore, several service contracts do not feature an end date and allow both parties to terminate the agreement after offering sufficient notice.
You can create your service agreement because it is not illegal to come up with one without an attorney. But contract laws need contracts to feature specific elements to be enforceable and valid.
A service contract should include the following:
ᐅ Client’s and contractor’s contact information
ᐅ Charges for the service
ᐅ Work description
Yes, NDIS service agreements are legally binding because the entire terms featured in a signed agreement are considered legal bindings.
Yes, service agreements have to be in writing. This has been effective since July 1st, 2014. Suppose you are interested in buying property, you are likely to sign a written service agreement.
Yes, because a service agreement can be terminated at any time. However, the party canceling your agreement is supposed to be liable for the entire costs that come along with cancellation. Therefore, canceling the contract should be done according to the contract terms. Otherwise, it will be considered a breach of contract or a broken contract.
Suppose you are a service provider, ensure that you use a service contract any time you are likely to offer your services to your client. This contract protects your interests and guarantees you compensation. Therefore, ensure that you document your pay rate for insurance clauses, invoicing frequency, and services. Similarly, a client should utilize the service contract when hiring a service provider for a paid task. Bear in mind that this contract features exact details of the job arrangement, comprising confidentiality, duties, and compensation.