Services Agreement FAQ

A services agreement is a contract between a service provider and a client that defines the services to be performed, payment terms, deliverables, timelines, and the rights and obligations of each party. It is the foundation for any professional services engagement.

A services agreement covers a single project. A Master Service Agreement (MSA) establishes general terms for an ongoing relationship, with individual Statements of Work (SOWs) for each project. Use an MSA when you expect multiple projects with the same client.

Any time you provide or receive professional services: consulting, software development, marketing, design, accounting, legal, or any other service engagement. Even for small projects, a written agreement prevents misunderstandings about scope, payment, and deliverables.

Be specific: list the services to be performed, deliverables with acceptance criteria, milestones and timelines, what is explicitly excluded, and the process for changes (change order procedure). Vague scope definitions are the leading cause of services disputes.

Common approaches: cap total liability at fees paid under the agreement (or a multiple thereof), exclude consequential and indirect damages, carve out exceptions for IP infringement, confidentiality breach, and gross negligence. The cap should reflect the deal economics.

Without an explicit clause, ownership depends on the relationship and jurisdiction. Always include a clear IP assignment clause. Common approaches: client owns all deliverables upon payment, provider retains pre-existing IP with a license granted, or provider retains IP until full payment.

Include: termination for convenience with notice period (30-60 days), termination for cause (material breach with cure period), termination for insolvency, wind-down obligations, payment for work completed, and survival of key provisions (confidentiality, liability, IP).