What is a service agreement?
A service agreement is a contract between a business or freelancer that provides services and the client who pays for them. It records what will be done, by when, for how much, and what happens if plans change or something goes wrong. It suits almost any project-based work: web design, marketing, cleaning, IT support, photography, bookkeeping, repairs and more.
A clear service agreement protects both sides. The client knows exactly what it is buying; the provider knows when it will be paid and has a fair way to charge for extra requests.
When to use one
- Before starting any project worth more than a few hours of work.
- When a client asks for a deposit or staged payments.
- When the scope is likely to grow and you need a change-request process.
- When you hand over designs, code or content and need to settle who owns them.
For ongoing monthly work, a retainer agreement usually fits better. For advice-based work, see the consulting agreement.
Key clauses explained
| Clause | Why it matters |
|---|---|
| Services and deliverables | Defines the job. Vague scope is the most common cause of disputes. |
| Fees and payment schedule | Sets the price, when invoices go out and when they are due. |
| Change requests | Extra work is priced and agreed in writing before it starts. |
| Review and acceptance | Gives the client a set time to check the work, so projects can close. |
| Intellectual property | Ownership passes to the client once paid; the provider keeps its own tools. |
| Liability cap | Limits how much either side can claim, usually tied to the fees. |
| Termination | Either side can exit with notice, and the provider is paid for work done. |
How to use this template
- Enter both parties' full legal names and addresses.
- Describe the services in plain, specific terms – what is included and, if helpful, what is not. The AI scope of work generator can help you draft this.
- List the deliverables, the fee and the payment schedule. Not sure what to charge? Try the hourly rate calculator.
- Pick a liability cap and notice period, and switch optional clauses such as late payment or portfolio use on or off.
- Download the PDF, read it with your client and have both parties sign before work begins.
Tips and common mistakes
- Be specific about revisions. "Two rounds of revisions" prevents endless changes; "revisions as needed" invites them.
- Take a deposit on larger jobs. A 50% upfront payment is common for project work and reduces your risk.
- Get changes in writing. A short email confirming the extra cost is enough under this template.
- Match your invoices to the agreement. Use the same fee and due date on every invoice from the invoice generator.
- Follow up early. If payment is late, send a polite note with the payment reminder generator and work out any interest with the late fee calculator.
Need to quote the job first? Send a quote, then turn the accepted price into this agreement.
This template is general information, not legal advice. Contract, consumer and tax rules differ between countries and states; ask a lawyer to review agreements for high-value or unusual projects.
Frequently asked questions
What is the difference between a service agreement and a quote?
A quote is an offer that sets out a price for specific work. A service agreement is a signed contract that adds the rules around it: payment timing, changes, ownership of the work, liability and how either side can end the deal. Many businesses send a quote first and then a service agreement once the price is accepted.
Is a service agreement legally binding?
Generally yes. When both parties agree to clear terms and there is payment for services, it is usually an enforceable contract. Signing it, even electronically, makes the agreement and its terms much easier to prove.
Should I include a liability cap?
It is common and sensible. A cap tied to the fees means a small project cannot lead to an unlimited claim. Caps usually don't apply to fraud, gross negligence or liability that the law does not allow to be limited.
Who owns the work under this template?
The client becomes the owner of the final deliverables once it has paid for them. The provider keeps its own pre-existing tools, templates and know-how, and gives the client a licence to use any that are built into the deliverables.
Can I use this for a one-off small job?
Yes. For small jobs keep the scope short and specific, choose payment in full on completion or a deposit, and switch off clauses you don't need. For very simple jobs a signed quote may be enough.
