Start with the deal in two sentences
Before opening a template, write the deal in two sentences: who is doing what, for whom, by when, and for how much. If you can't describe the deal that simply, the contract won't save you — clarify the deal first.
The five clauses every service agreement needs
These five sections cover 90% of disputes. Get them right and you almost never need a lawyer for routine work.
- Scope — exactly what will be delivered, with milestones if useful
- Payment — how much, when, and what triggers payment
- Timeline — start date, key milestones, and what happens if either side slips
- IP and ownership — who owns the work product (usually the client, on payment)
- Termination — how either side can end the agreement cleanly
Clauses that quietly matter
Some clauses feel like boilerplate until they don't. Always include governing law (which state's law applies), notice provisions (how the parties send formal notices), and a clear path for disputes (court, mediation, or arbitration).
Add a confidentiality clause if either side will see sensitive information, and a limitation of liability clause to cap your downside on small engagements.
Common service-agreement traps
These show up over and over in disputes:
- Vague scope ('marketing support') that lets either side claim the other underdelivered
- Verbal change orders — every change should be in writing
- No revision limits, leading to endless rounds
- Payment tied to 'satisfaction' instead of clear deliverables
- Skipping the governing-law clause when the parties are in different states
Frequently asked
- Do I need a separate contract for every project?
- Not necessarily. Many businesses use a master services agreement plus short statements of work for each engagement.
- Is a verbal service agreement enforceable?
- Sometimes, but very hard to prove. Always get the agreement in writing — even a short emailed scope is better than nothing.
- Should I include a kill fee?
- Yes, especially for project-based work. A kill fee compensates you for time and lost opportunity if the client cancels mid-project.
- What's the difference between a service agreement and a contractor agreement?
- They're closely related. A contractor agreement is a service agreement that explicitly establishes independent contractor status, IP transfer, and 1099 tax treatment.
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