A service agreement is the general-purpose contract between a provider and client: scope and deliverables (or ongoing service levels), pricing (fixed, hourly, or retainer with Net 15–30 invoicing and 25–50% deposits on project work), a change process, IP ownership of work product, mutual liability caps (commonly fees paid in the prior 12 months), insurance, and termination with notice (15–30 days) plus payment for work performed. For recurring relationships, a master services agreement (MSA) plus per-project statements of work (SOWs) keeps the legal terms signed once and the scope documents lightweight.
Free Service Agreement Template
Reviewed by the Agiled editorial teamUpdated June 2026
The service agreement is the workhorse contract of the service economy — flexible enough to cover an agency retainer, an IT support arrangement, or a one-off...
Part of our free contract template library — 75+ agreements in Word and PDF, ready to customize and sign.
Full template text
Below is a comprehensive service agreement template you can adapt to your needs. Replace the bracketed placeholders with your specific details.
SERVICE AGREEMENT
This Service Agreement ("Agreement") is entered into as of [Date] ("Effective Date") by and between:
Service Provider: [Provider Full Legal Name], with a principal place of business at [Address] ("Provider")
Client: [Client Full Legal Name], with a principal place of business at [Address] ("Client")
Provider and Client are collectively referred to as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, the Client desires to engage the Provider to perform certain services as described herein; and
WHEREAS, the Provider possesses the skills, qualifications, and experience necessary to perform such services;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the Parties agree as follows:
1. Services
1.1 The Provider shall perform the services described in Exhibit A attached hereto and incorporated by reference ("Services").
1.2 The Provider shall perform the Services in a professional and workmanlike manner, consistent with industry standards and in accordance with any specifications set forth in Exhibit A.
1.3 The Provider shall devote sufficient time, attention, and resources to ensure timely and satisfactory completion of the Services.
2. Service Standards
2.1 The Provider shall perform all Services in compliance with applicable laws, regulations, and industry best practices.
2.2 All deliverables shall meet the acceptance criteria specified in Exhibit A. The Client shall have [Number] business days from delivery to review each deliverable and provide written acceptance or a detailed list of required revisions.
2.3 The Provider shall correct any deficiencies identified during the review period at no additional cost to the Client, provided the requested corrections fall within the original scope of Services.
3. Term
3.1 This Agreement shall commence on the Effective Date and shall continue for a period of [Duration] unless earlier terminated in accordance with Section 12 ("Term").
3.2 Upon expiration of the initial Term, this Agreement shall automatically renew for successive [Renewal Period] periods unless either Party provides written notice of non-renewal at least [Notice Period] days prior to the end of the then-current term.
4. Compensation
4.1 In consideration for the Services, the Client shall pay the Provider the fees set forth in Exhibit B attached hereto ("Fees").
4.2 [Option A — Fixed Fee] The total Fee for the Services shall be [Amount] payable in accordance with the milestones described in Exhibit B.
4.2 [Option B — Hourly Rate] The Provider shall be compensated at a rate of [Amount] per hour. The Provider shall submit detailed time records with each invoice.
4.3 The Client shall reimburse the Provider for pre-approved, reasonable out-of-pocket expenses incurred in connection with the Services, provided the Provider submits receipts and documentation with the corresponding invoice.
5. Payment Terms
5.1 The Provider shall submit invoices [Frequency — e.g., monthly, upon milestone completion] in accordance with Exhibit B.
5.2 The Client shall pay each invoice within [Number] days of receipt.
5.3 Late payments shall accrue interest at the rate of [Percentage]% per month, or the maximum rate permitted by applicable law, whichever is lower.
5.4 If any portion of an invoice is disputed in good faith, the Client shall pay the undisputed portion by the due date and provide written notice of the disputed amount with a detailed explanation within [Number] days of receipt.
6. Warranties
6.1 The Provider warrants that (a) it has the right and authority to enter into this Agreement; (b) the Services will be performed in a professional manner consistent with industry standards; and (c) the deliverables will conform to the specifications in Exhibit A.
6.2 The Client warrants that (a) it has the right and authority to enter into this Agreement; and (b) it will provide timely access to information, personnel, and resources reasonably necessary for the Provider to perform the Services.
6.3 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7. Limitation of Liability
7.1 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION OR THE THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
7.2 THE AGGREGATE LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT SHALL NOT EXCEED THE TOTAL FEES PAID OR PAYABLE BY THE CLIENT TO THE PROVIDER UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
7.3 The limitations in this Section 7 shall not apply to (a) breaches of confidentiality obligations under Section 10; (b) indemnification obligations under Section 8; or (c) willful misconduct or gross negligence.
8. Indemnification
8.1 The Provider shall indemnify, defend, and hold harmless the Client and its officers, directors, employees, and agents from and against any third-party claims, losses, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or related to (a) the Provider's negligent or willful acts or omissions in performing the Services; or (b) the Provider's breach of any representation or warranty in this Agreement.
8.2 The Client shall indemnify, defend, and hold harmless the Provider and its officers, directors, employees, and agents from and against any third-party claims, losses, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or related to (a) the Client's negligent or willful acts or omissions; or (b) the Client's breach of any representation or warranty in this Agreement.
8.3 The indemnified Party shall provide prompt written notice of any claim, cooperate with the indemnifying Party in the defense of such claim, and not settle any claim without the indemnifying Party's prior written consent.
9. Intellectual Property
9.1 All intellectual property created by the Provider in the course of performing the Services ("Work Product") shall be the exclusive property of [Client/Provider — choose one] upon full payment of the applicable Fees.
9.2 [If Client owns Work Product] The Provider hereby assigns to the Client all right, title, and interest in and to the Work Product, including all copyrights, patents, and other intellectual property rights therein.
9.3 [If Provider retains ownership] The Provider grants the Client a non-exclusive, perpetual, royalty-free license to use, reproduce, and modify the Work Product for the Client's internal business purposes.
9.4 The Provider retains ownership of all pre-existing intellectual property, tools, methodologies, and know-how used in performing the Services ("Provider Materials"). To the extent Provider Materials are incorporated into any deliverable, the Provider grants the Client a non-exclusive, perpetual, royalty-free license to use such Provider Materials solely as part of the deliverable.
10. Confidentiality
10.1 "Confidential Information" means any non-public information disclosed by one Party to the other in connection with this Agreement, whether disclosed orally, in writing, or by inspection, including but not limited to business plans, financial data, customer lists, trade secrets, and technical information.
10.2 The receiving Party shall (a) use Confidential Information solely for the purpose of performing its obligations under this Agreement; (b) protect Confidential Information with at least the same degree of care it uses to protect its own confidential information, but in no event less than reasonable care; and (c) not disclose Confidential Information to any third party without the disclosing Party's prior written consent.
10.3 Confidential Information does not include information that (a) is or becomes publicly available through no fault of the receiving Party; (b) was already known to the receiving Party prior to disclosure; (c) is independently developed by the receiving Party without reference to the Confidential Information; or (d) is required to be disclosed by law, regulation, or court order, provided the receiving Party gives prompt notice to the disclosing Party.
10.4 The obligations of confidentiality shall survive the termination or expiration of this Agreement for a period of [Number] years.
11. Independent Contractor
11.1 The Provider is an independent contractor and nothing in this Agreement shall be construed to create a partnership, joint venture, agency, or employment relationship between the Parties.
11.2 The Provider shall be solely responsible for all taxes, insurance, and benefits related to the Provider's personnel and operations.
12. Termination
12.1 Termination for Convenience. Either Party may terminate this Agreement upon [Number] days' prior written notice to the other Party.
12.2 Termination for Cause. Either Party may terminate this Agreement immediately upon written notice if the other Party (a) materially breaches any provision of this Agreement and fails to cure such breach within [Number] days after receiving written notice of the breach; or (b) becomes insolvent, files for bankruptcy, or has a receiver appointed for a substantial portion of its assets.
12.3 Effect of Termination. Upon termination, (a) the Client shall pay the Provider for all Services satisfactorily performed through the date of termination; (b) the Provider shall deliver to the Client all completed and in-progress Work Product; and (c) each Party shall return or destroy all Confidential Information of the other Party.
12.4 Sections 6, 7, 8, 9, 10, and 14 shall survive the termination or expiration of this Agreement.
13. Force Majeure
13.1 Neither Party shall be liable for any failure or delay in performing its obligations under this Agreement to the extent such failure or delay results from circumstances beyond the Party's reasonable control, including but not limited to natural disasters, acts of government, war, terrorism, epidemics, power failures, or internet outages ("Force Majeure Event").
13.2 The affected Party shall provide prompt written notice of the Force Majeure Event and use commercially reasonable efforts to mitigate its effects.
13.3 If a Force Majeure Event continues for more than [Number] consecutive days, the non-affected Party may terminate this Agreement upon written notice without liability.
14. Governing Law
14.1 This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without regard to its conflict of laws principles.
14.2 Any dispute arising out of or relating to this Agreement shall be resolved exclusively in the state or federal courts located in [County, State], and each Party hereby consents to the personal jurisdiction of such courts.
15. General Provisions
15.1 Entire Agreement. This Agreement, together with all exhibits and schedules attached hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written.
15.2 Amendments. This Agreement may not be amended or modified except by a written instrument signed by both Parties.
15.3 Waiver. The failure of either Party to enforce any provision of this Agreement shall not be construed as a waiver of such provision or the right to enforce it at a later time.
15.4 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
15.5 Assignment. Neither Party may assign this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement to a successor in connection with a merger, acquisition, or sale of all or substantially all of its assets.
15.6 Notices. All notices under this Agreement shall be in writing and delivered to the addresses set forth above, or to such other address as a Party may designate in writing.
15.7 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
SIGNATURES
IN WITNESS WHEREOF, the Parties have executed this Service Agreement as of the Effective Date.
Service Provider:
Signature: ___________________________
Name: [Print Name]
Title: [Title]
Date: ___________________________
Client:
Signature: ___________________________
Name: [Print Name]
Title: [Title]
Date: ___________________________
EXHIBIT A — SCOPE OF SERVICES
[Describe the services, deliverables, milestones, acceptance criteria, and any exclusions in detail.]
EXHIBIT B — FEES AND PAYMENT SCHEDULE
[List the fee structure, milestone payments or invoicing schedule, expense reimbursement policies, and any other financial terms.]
- Payment terms
- Net 15 – 30; deposits 25 – 50%
- Liability cap
- Fees paid, trailing 12 months
- Termination notice
- 15 – 30 days, either party
- Ongoing work
- MSA + per-project SOWs
What your service agreement should cover
Scope and deliverables
What's being delivered or performed, to what standard, by when — with exclusions named. For ongoing services, the service description plus response/turnaround expectations; for projects, deliverables with acceptance criteria. Scope vagueness is the root cause of most service disputes.
Pricing structure
Fixed fee (per project or milestone), hourly/day rate with an estimate cap, or monthly retainer with defined inclusions. Whichever applies, the overage path is stated: out-of-scope work quoted and approved before it's performed.
Invoicing, payment terms, and late-payment teeth
Invoice timing, Net 15–30 due dates, accepted methods, late interest (commonly 1–1.5%/month where lawful), and the right to pause services on accounts past due by a stated number of days — the clause that actually collects invoices.
Change process
Scope changes in writing — even a confirmed email — with price and timeline impact stated before work proceeds. The discipline matters more than the format.
Client dependencies
What the client must provide (access, content, approvals, decisions) and the consequence of delay: timelines extend, and prolonged stalls (30+ days) allow the provider to invoice work performed and pause or close the engagement.
IP ownership of work product
Default choice to make explicitly: deliverables assign to the client on full payment, with the provider retaining pre-existing tools, templates, and know-how under a license-back. Payment-conditioned assignment is the provider's best leverage clause.
Confidentiality, both directions
Each party protects the other's non-public information with the standard exclusions — replacing the separate NDA for most engagements.
Warranties and disclaimers
Services performed in a professional, workmanlike manner consistent with industry standards; everything else disclaimed. Outcome guarantees don't belong in service contracts — effort and standard do.
Liability cap and exclusions
Mutual cap at fees paid in the trailing 12 months, with consequential damages excluded — and carve-outs for confidentiality breach, IP infringement, and gross negligence. The cap is what makes a $5k/month engagement insurable against a $5M claim theory.
Insurance and compliance
GL and professional liability (E&O) stated where the work warrants it; data-protection terms referenced when personal data is touched (the DPA does that work, not this clause).
Term, termination, and wind-down
Initial term and renewal, termination for convenience on 15–30 days' notice, immediate termination for material breach uncured after notice, and the wind-down math: payment for work performed, delivery of paid-for work product, return of materials and access.
Independent contractor status and non-solicitation
The provider is not an employee; each party agrees not to hire away the other's staff for 12 months. Standard hygiene for service relationships.
Typical service agreement terms (U.S., 2026)
| Term | Standard practice | Notes |
|---|---|---|
| Project deposit | 25% – 50% | Before work begins |
| Invoice terms | Net 15 – 30 | Net 60+ only for enterprise |
| Late interest | 1% – 1.5%/month | Where state law allows |
| Service-pause trigger | 15 – 30 days past due | With notice |
| Liability cap | Trailing 12-month fees | Mutual; carve-outs apply |
| Termination notice | 15 – 30 days | Convenience, either party |
| Non-solicitation | 12 months | Staff, both directions |
Norms vary by industry and deal size — enterprise clients push longer payment terms and higher caps; regulated industries add compliance riders. The structure above fits most small-to-mid service relationships.
How service agreements work in practice
The one-off project
A defined deliverable for a fixed fee: 50% deposit, milestone or completion balance, acceptance criteria that define done (a review window of 5–10 business days, after which silence is acceptance), and IP assigning on final payment. The acceptance clause deserves the most care — without a deemed-acceptance mechanism, projects float in 'almost done' indefinitely while the final invoice ages. With it, the client's review obligation has a clock, and the provider's payment has a path.
The monthly retainer
Ongoing service for a monthly fee — agency work, IT support, fractional expertise. The clauses that decide whether retainers stay profitable: what the fee includes (hour bank, deliverable set, or availability), rollover rules (unused hours expire or carry 30 days), the out-of-scope rate, and a rate-review date annually. Retainers die from silent scope inflation; the inclusion list and the out-of-scope quote habit are the countermeasures. Either side exits on 30 days' notice, which keeps both honest.
The MSA + SOW relationship
When one client generates repeated projects, negotiate the legal terms once in a master services agreement — payment, IP, confidentiality, liability, termination — and run each project as a short statement of work: scope, deliverables, timeline, fee. New projects start in days instead of legal-review weeks, and a conflict rule ('the MSA governs unless the SOW expressly overrides') keeps the documents coherent. This is the structure agencies, consultancies, and IT providers should default to from the second project onward.
Mistakes that weaken a service agreement
Starting work on a handshake while 'legal finalizes'
Work performed before signature is work priced after the fact, on the client's terms. The deposit-and-signature gate exists because leverage evaporates the moment the work is delivered.
No acceptance mechanism
Without a review window and deemed acceptance, 'we're still reviewing' holds the final payment hostage indefinitely. Five to ten business days, then silence is sign-off.
Unlimited liability on a limited fee
A $30k engagement without a cap carries the client's full theory of consequential damages. The mutual trailing-fees cap with standard carve-outs is market practice — propose it without apology.
IP transferring before payment
Assign deliverables on full payment, not on delivery. The conditional assignment is the politest effective collections tool a service business owns.
Letting past-due accounts keep consuming service
Working month four while months one through three sit unpaid converts a service business into an unsecured lender. The pause-on-arrears clause, applied consistently, keeps receivables honest.
How to use this template
- 01
Download the service agreement template in Word or PDF.
- 02
Define the scope — deliverables with acceptance criteria, or ongoing service levels with inclusions.
- 03
Set pricing, the deposit, invoice terms, late interest, and the service-pause trigger.
- 04
Set IP assignment on full payment with your pre-existing-tools carve-out.
- 05
Add the mutual liability cap, confidentiality, and termination/wind-down terms.
- 06
For repeat clients, split into MSA + SOWs — then sign before work begins.
Skip this template if…
- Employment relationships — supervised, scheduled work belongs on an employment agreement with payroll obligations.
- Software-as-a-service subscriptions — SaaS terms (uptime SLAs, data terms, subscription billing) are their own instrument.
FAQs
What is a service agreement?
The general-purpose contract between a service provider and client covering scope, pricing, payment terms, IP ownership, liability, and termination. It adapts to one-off projects, monthly retainers, and ongoing service relationships — and for repeat work it splits into a master agreement plus per-project statements of work.
What payment terms should a service contract use?
Project work: a 25–50% deposit before starting, balance on milestones or completion, invoices due Net 15–30. Add late interest (1–1.5% monthly where lawful) and the right to pause service on accounts 15–30 days past due — the pause clause is what makes the rest collectable.
Who owns the work product under a service agreement?
Whatever the contract says — which is why it must say. The standard structure: deliverables assign to the client upon full payment, while the provider retains pre-existing tools, templates, and general know-how under a license. Without a written assignment, the provider typically owns the copyright by default.
What is a liability cap and is it fair?
A clause limiting each party's total liability — commonly to fees paid in the trailing 12 months — with consequential damages excluded and carve-outs for confidentiality, IP infringement, and gross negligence. It's standard market practice: it keeps engagement risk proportional to engagement size for both sides.
What's the difference between a service agreement and an MSA?
An MSA (master services agreement) is a service agreement built for repetition: the legal terms sign once, and each project runs on a short statement of work referencing it. From the second project with the same client onward, the MSA + SOW structure saves negotiation time and keeps terms consistent.
How do I end a service agreement?
Through its termination clause: typically either party may exit for convenience on 15–30 days' written notice, or immediately for material breach uncured after notice. Wind-down terms then govern — payment for work performed, handover of paid-for deliverables, and return of materials and access.
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