73 Free Service Contract Templates – Word – PDF

A Service Contract is a written agreement between the service provider and the client, which details the agreed business terms, the scope of work, assurances, responsibilities, and cost of service. 

Service contract templates are online forms that allow you to create contract documents by filling in the required details depending on the type of contract you want to make. Each type of contract template features various components as detailed in the contract template.

Business transactions involving two parties, namely a service provider and a client receiving the service, are often interceded by a service contract.

A service contract is a 1099 agreement or what is popularly known as an Independent contractor agreement, based on the IRS classification under the 26 CFR 31.3121(d)-1. An independent contractor is held responsible by the IRS for the payment or settlement of their withholding taxes.

There is no specific expiry date for a service contract; thus, it is subject to termination at the will of any of the parties or upon their mutual agreement to terminate the contract. The service provider can receive payment for their services from the client either after completion of the project, during the project, or at the beginning of the service, depending on the type of the service contract.

Alternate names for a service contract include:

• General Service Contract
• Independent Contractor Agreement
• Service-Level Agreement (SLA)
• Consulting Services Agreement

Under the (29 CFR § 4.1a(h)) federal law, all contracts above the value of  $2,500 require that contractors pay their employees a minimum wage, in accordance with the federal laws of the locality where the contractor is offering service. 

A service contract is used in an event when the contract terms are complex and need to be written down to expound them to greater length for the understanding of both the client and service provider. A service contract is mainly used to protect the interest of the parties involved by ensuring the service provider performs their duties as per the expectations and that the client pays the agreed amount for the service at the agreed time.

 A service contract is often necessary for a specific project, but it can also be applied to an ongoing project that doesn’t have a predetermined end date at the time when the service agreement is signed.

Free Service Contract Templates – by Type

A service contract features basic elements that must be present for the validity of the contract. Such elements include the offer, parties, mutual agreement, acceptance of the contract terms, and consideration of the unit of exchange. 

These include:

• A service contract involves parties that participate in the transaction; hence, the client and service provider is part of the basic elements of a service contract.
• Another basic element of a service contract is the offer being provided by the contractor, in which case the service is the offer.
• The exchange unit is considered part of a service contract’s basic element, where the client can exchange money for the service.  
• A service contract is only valid when the parties consent to the terms of the contract making acceptance a basic element of a service contract.
• Lastly, mutual agreement or acceptance of the contract terms by both parties is an essential basic elements of the service contract.

It is advisable to use a service contract when offering a service to a client either on a short-term, long-term, or permanent basis to ensure you get paid accordingly.

Below are instances when you may need to use a service contract when offering services:

• A service provider needs to use a service contract when working with precise descriptions in terms of materials, size, or quality of the product they are expected to deliver.
• If you are not certain that the client will compensate for the service after the completion of the project, a service provider may need to use a service contract that holds the client accountable and can be used to sue for compensation.
• When the details of the project have to be kept confidential, then the service provider should consider using a service contract to sign a non-disclosure agreement.
• A service contract is vital when a service provider is supposed to hire staff, buy work materials and purchase insurance cover with their own money, which they compensate with the wages paid after the project is finished. If the client wishes to cancel the project mid-way, the contractor will get compensation for the amount spent on the project as per the contract terms.
• You may need to get a service contract to purchase an insurance cover since some insurance companies require contractors to attach a service contract when applying for insurance.
• A contractor should use a service contract to eliminate misunderstandings since the contract records the agreed pay rate, insurance clauses, when the payment should be made, duties, and responsibilities of the parties.
• You may want to use a service contract as part of an insurance cover that acts as evidence in court in case of disputes
• A service provider should operate with a service contract in a situation where it’s part of the requirements of the local laws to transact with a written contract.

Before writing a service contract, it is vital to accomplish essential pre-writing steps that guide the content and term of the contract. First, the parties have to agree verbally about the transaction they are going to have and the costs before proceeding to write the agreement.

The following are necessary pre-writing steps that need to be observed when creating a service contract:

Step 1: verify the second party

As a service provider, you should run background checks on your client through public directories to confirm if they are involved in any litigation. After confirming the credibility of the client, you can now proceed to work with them.

Step 2: negotiate the services

In most cases, clients may present you with their estimated budget for the service. You can negotiate for a better offer for the service you are offering by explaining to the client the service worth, to make them see value for their money, and be compelled to agree to the service cost.

Step3: collect the required documents

After verifying the integrity of the client and agreeing on the cost of service, the next step would be to access the contract template to fill in the details and then download it in PDF, Open Document, or Microsoft Word. It is advisable to consult legal counsel from an attorney to help in drafting the contract who may be paid a retainer fee for their services during the signing and future consultations. In case the contract is worth more than $10,000, the parties are required to sign the contract in the presence of a notary public.

A valid service contract must be legible, accurate, and adequately filled with the inclusion of all the necessary details such as the parties’ names, date of the agreement, service terms, compensation and fees, and other critical components of a service contract.

Below is a quick guide to writing an effective service content template:

State the date of writing the agreement

 A service contract template presents a section for you to fill in the date of when the agreement was written, which is also considered the first day when the parties may be required to start complying with the contract statutes. Fill in the month, day, and year on the first section of the template named ‘The Parties’.

For example:

The Parties: This Service Contract made on August 13^th, 2021, is between the following parties:

Mention all of the information for both parties

The participants of a service contract have to be identified by filling in the names and addresses of both the service provider and the client receiving the service on the contract template. The parties are mentioned in the first section of the contract template and immediately after the contract date, as shown below.

For example:

The Parties: This Service Contract made on August 13th, 2021, is between the following parties:

Service provider:  Annette Brown, with a mailing address of 14 12^th Street, city of New York, State of U.S.A.  
Client: Ted Smith, with mailing address of 36 47^th Street, City of New York, State of U.S.A.

State the start and end date of the contract

A service contract must have a commencement date when the parties are expected to comply with the contract terms and an end date when the contract is terminated. Section II, labeled ‘Term’ in a service contract template, is where you are expected to fill in the start and end date.

For Example:

Term: The term of this agreement shall commence on August 13^th, 2021, and be terminated: (check one)

Upon notice: at least 7 days’ notice.
End Date: On January 1^st, 2022 
Other: _________

Any key terms used

Key terms used throughout a service contract may be elaborated for the effective comprehension of the parties involved. For example, in a service contract template, you have to clarify service terms, payment terms, start and end date, and other applicable terms.

For example:

 A term like give 7 days’ notice could be subject to various interpretations like either 7 calendar days or 7 business working days. Such confusion could lead to misunderstandings and disputes.

The products or services that are provided

 A service provider must describe in the service contract the nature and type of services or products they plan to offer the client. This information can be covered in part III labeled ‘The service’.

For example:

Service. The service provider agrees to offer the following:

– Provide babysitting services to the three children of Mrs. Jones three times a week.

State related government tax laws

State in the service contract templates the party responsible for paying government taxes for the transaction between you as the service provider and the client.  The contract terms must comply with the governing laws of the specific state in the services are offered.

For example:

Tax obligation. The following will be the agreed tax obligation for the parties:

1099 Independent contractor: The babysitter individual or company is deemed as an independent contractor based on the IRS code. Hence it is responsible for the payment of Medicare, social security, withholding FICA, and any other withholding taxes.
W-9 Employees: the babysitter is considered an employee of the client and should hence fill form1-9 accessible from (www.uscis.gov/forms) and present all necessary paperwork proving their employment. The employer will withhold income taxes of the babysitter in accordance with the W-4 state form instructions and also withhold Medicare and social security taxes from the salary of the babysitter. The babysitter will receive Form W-2 from the employer at the end of the calendar year for them to file returns.
XVIII. Governing law: The agreement shall be governed by and shall be construed in accordance with the laws in the state of

Payment terms, due dates, and any milestone payments or part payments that may be needed

Include In the service contract template the agreed amount for the payment of the service rendered to the client, including the milestone payment amount and due dates.

For example:

Payment amount: The service provider will receive payment from the client of the amount depicted below:

$ 30 / hour
$________  / per month

Payment method: The client will make payment to the service provider via:

– Check
– Direct Deposit
– Cash

Payment frequency:

– When Invoiced
– Daily
– Weekly
– Monthly
– Other

Retainer

– Pay a retainer of $ ____ to the service provider as advance for future services. (Check one)
– Retainer is refundable
– Retainer is non-refundable
– Not required to pay a retainer before the commencement of the service

Any fees or interest for late payments

A Service contract template lets you anticipate actions to take in case of late payment with the implementation of interests and late fee payments.

For example:

Late fee: The client will pay a late fee amounting to 10% of the total service amount for late payment of more than 5 days from the agreed payment date.

Any insurances or liability requirements

In a situation where one may need to get insurance coverage to get the job, the party that is expected to cover the insurance expenses has to be determined in the service contract.

For example:

Insurance and miscellaneous:  The client will be liable for the payment of the Insurance cover and all other miscellaneous expenses.

Dispute resolution process or breach-of-contract terms

There should be provisions in the service contract that defines what should be done in case one party or both parties breach the contract terms. Breach of contract can be resolved through the warranties and remedies clause or payment of penalties.

For example:

Penalties for breach of contract terms

– In case the babysitter shows up late, he/she will pay a fine of 5% of the total hourly pay for every extra hour.
– The client will pay a late fee of 10% to the babysitter for every extra day their payment is late.

Any special conditions

A service contract template provides a section to fill in any particular conditions mutually accepted by the service provider and client.

For example:

Additional terms and Conditions. __________

Client’s consent and signature

 Mutual consent in a service contract is denoted by the signatures of the parties. A service contract template features a gap for the client to put their signature and date, as shown below.

For example:

Client’s signature ________  Date  _______
Client’s name ________

Service provider’s acceptance and signatures

The service provider is also supposed to sign the service contract to show their consent to the contract terms.

For example:

Service provider’s signature __________    Date _________
Service provider’s name __________

Termination

It is essential to include factors that may lead to the termination of the contract in a service contract. Therefore, in the contract template, mark in the checkbox various conditions that lead to the termination of the contract.

For example:

• Mutual consent to terminate the contract any time
• End date
• Upon completion of the work scope
• Breach of contract terms by one party

Following are some free downloadable templates for you:

Standard service contract templates

A service provider looking to insure their services should consider using a contract based on mutual agreement between the client and the service provider. On top of protecting the interests of both parties, a service contract is used to clarify work requirements and scope and communicate the duties and responsibilities of each party. You can easily download the Service Contract Template from here to be altered as per your requirements.