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Performance Services Contract

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PERFORMANCE SERVICES CONTRACT

This Performance Services Contract (the "Contract") is entered into as of Effective Date: by and between Client Name: , a Individual Corporation LLC, with principal place of business at Client Address: ("Client"), and Service Provider Name: , a Individual Corporation LLC, with principal place of business at Provider Address: ("Service Provider").

RECITALS

WHEREAS, Client desires to retain Service Provider to perform certain performance services described herein and Service Provider has the necessary experience, personnel and resources to perform such services; and

WHEREAS, Service Provider agrees to provide the services to Client on the terms and conditions set forth in this Contract; and

WHEREAS, the parties intend that Service Provider shall perform services as an independent contractor and that ownership of any deliverables, intellectual property rights, and compensation shall be governed by the terms of this Contract.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties agree as follows:

1. SERVICES

1.1 Description. Service Provider shall perform the services set forth in the Detailed Description of Services below (the "Services") in a professional and workmanlike manner consistent with industry standards.

1.2 Location and Schedule. Services shall be performed at locations agreed by the parties or remotely as agreed. The initial term of service shall commence on Start Date: and, unless earlier terminated in accordance with this Contract, shall continue until End Date: .

2. COMPENSATION

2.1 Fees. Client shall pay Service Provider the fees set forth below for the Services. Total Estimated Fees: $. Fees are exclusive of applicable taxes unless otherwise specified.

2.2 Expenses. Client shall reimburse Service Provider for pre-approved, reasonable and documented out-of-pocket expenses incurred in connection with performance of the Services upon submission of appropriate receipts. Expense cap (if any): $.

3. INVOICING AND PAYMENT

3.1 Invoices. Service Provider shall submit itemized invoices to Client specifying Services rendered, hours, rates, and reimbursable expenses. Invoices shall be submitted to the notices address set forth in Section 14.

3.2 Payment Terms. Client shall pay each undisputed invoice within days of receipt. Late payments shall accrue interest at or the highest rate permitted by law, whichever is lower.

4. INDEPENDENT CONTRACTOR

Service Provider is an independent contractor and not an employee, agent, or partner of Client. Service Provider shall have no authority to bind Client or incur obligations on Client’s behalf except as expressly authorized in writing. Service Provider shall be solely responsible for all payroll, employment taxes, benefits, and withholding for its personnel.

5. CONFIDENTIALITY

5.1 Definition. "Confidential Information" means non-public information disclosed by one party to the other, whether oral or written, that is designated as confidential or that reasonably should be understood to be confidential.

5.2 Obligations. Receiving party shall (a) not use Confidential Information except to perform its obligations under this Contract; (b) restrict disclosure to employees, contractors or advisors who need to know and are bound by confidentiality obligations; and (c) protect Confidential Information with at least the same degree of care it uses to protect its own confidential information, but no less than reasonable care.

6. INTELLECTUAL PROPERTY

6.1 Ownership of Pre-Existing Materials. Each party retains all right, title and interest in any materials owned or developed by that party prior to or outside the scope of this Contract.

6.2 Deliverables. Subject to Client’s payment of all fees due, Service Provider hereby assigns to Client all right, title and interest in and to the final deliverables specifically created for Client under this Contract. Service Provider retains the right to use general skills, know-how, and non-confidential general concepts learned or developed while performing the Services.

7. WARRANTIES; DISCLAIMER

7.1 Service Provider Warranties. Service Provider warrants that the Services will be performed in a professional and workmanlike manner in accordance with generally accepted industry standards. For any breach of this warranty, Service Provider’s sole obligation shall be to re-perform the deficient Services at no additional cost, or if re-performance is not commercially practical, to refund the fees attributable to the deficient Services.

7.2 Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION, NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

8. INDEMNIFICATION

8.1 By Service Provider. Service Provider shall indemnify, defend and hold harmless Client and its officers, directors and employees from and against any third-party claims, liabilities, damages, losses and expenses (including reasonable attorneys' fees) arising out of Service Provider's gross negligence, willful misconduct, or material breach of this Contract.

8.2 By Client. Client shall indemnify, defend and hold harmless Service Provider from and against third-party claims arising out of Client’s negligence, breach of representations herein, or use of deliverables outside the scope contemplated by the parties.

9. LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM A PARTY'S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR INDEMNIFICATION OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES. THE AGGREGATE LIABILITY OF EITHER PARTY FOR ANY AND ALL CLAIMS ARISING OUT OF OR RELATED TO THIS CONTRACT SHALL NOT EXCEED THE TOTAL FEES PAID BY CLIENT TO SERVICE PROVIDER UNDER THIS CONTRACT DURING THE TWELVE (12) MONTHS PRECEDING THE CLAIM.

10. INSURANCE

Service Provider shall maintain insurance appropriate to the Services, including commercial general liability insurance with limits of at least $ per occurrence and workers' compensation as required by law. Upon request, Service Provider shall provide certificates of insurance evidencing such coverage.

11. TERMINATION

11.1 Termination for Convenience. Either party may terminate this Contract for convenience upon days' prior written notice to the other party.

11.2 Termination for Cause. Either party may terminate immediately upon written notice if the other party materially breaches this Contract and fails to cure such breach within days after receipt of written notice specifying the breach.

12. NOTICES

All notices required or permitted under this Contract shall be in writing and delivered to the addresses below by hand, nationally recognized courier, or certified mail (return receipt requested). Notices are effective upon receipt.

13. AMENDMENTS; WAIVER; COUNTERPARTS

No amendment, modification or waiver of any provision of this Contract shall be effective unless in a written instrument signed by both parties. Failure to exercise any right shall not constitute a waiver of that right. This Contract 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.

14. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

14.1 Governing Law. This Contract shall be governed by and construed in accordance with the laws of the State of , without regard to its conflicts of law principles.

14.2 Entire Agreement. This Contract, together with any exhibits or attachments expressly incorporated herein, constitutes the entire agreement between the parties with respect to the subject matter and supersedes all prior and contemporaneous agreements, understandings and communications, whether oral or written.

14.3 Severability. If any provision of this Contract is held invalid or unenforceable, the remaining provisions shall remain in full force and effect and the parties shall negotiate in good faith to replace the invalid provision with a valid provision that, to the extent practicable, achieves the parties' original intent.

15. MISCELLANEOUS

15.1 Assignment. Neither party may assign this Contract without the prior written consent of the other party, except to an affiliate or in connection with a merger or sale of substantially all assets.

15.2 Survival. Provisions that by their nature are intended to survive termination or expiration of this Contract (including Sections 5, 6, 8, 9 and 14) shall survive.

Client Printed Name:

By:

Date:

Service Provider Printed Name:

By:

Date:

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What the Performance Services Contract Is and what it covers

A Performance Services Contract is a legally binding agreement that defines the scope, measurable deliverables, acceptance criteria, timelines, and payment terms for services provided by a contractor or service provider. It allocates responsibility for work performed, specifies performance metrics and remedies for nonperformance, sets change-order and dispute-resolution procedures, and typically includes confidentiality, insurance, indemnity, and termination provisions. The contract creates objective standards for evaluating service quality and provides the parties with predictable remedies and administrative steps when performance obligations are not met.

Why a clear Performance Services Contract matters

A precise Performance Services Contract reduces ambiguity, aligns expectations, and limits dispute exposure. It documents measurable standards and payment triggers, supports regulatory compliance when services touch protected data, and provides a written basis for remedies, audit, and vendor oversight.

Why a clear Performance Services Contract matters

Who commonly uses a Performance Services Contract

The Performance Services Contract is used by entities that depend on measurable service delivery and ongoing vendor performance.

  • Small businesses hiring contractors for recurring managed services and support agreements.
  • Enterprise procurement teams managing vendor relationships and outsourced operations with SLA oversight.
  • Government agencies and regulated institutions contracting professional services with compliance benchmarks.

Tailor the contract's detail level and clauses to match project size, regulatory obligations, and the parties' risk tolerance.

Roles and signers commonly involved

Service Provider

The individual or entity that will perform services under the contract. Include the legal business name, tax ID where required, and an authorized signatory. Accurate identification avoids payment delays, incorrect tax reporting, and enforceability questions if disputes arise.

Client / Purchaser

The organization or person contracting the services. Provide the legal entity name, billing and notice addresses, and the authorized approver. Clear client details ensure correct invoicing, contract acceptance, and appropriate assignment of performance and payment obligations.

Essential clauses to include in a Performance Services Contract

Include core and optional clauses that make the contract enforceable, measurable, and practical for operations and audits.

Scope of Work

Describe tasks, deliverables, milestones, excluded items, and reference any attached Statement of Work or schedules. Use measurable outputs and clear acceptance criteria to reduce ambiguity and disputes.

Service Levels

Define metrics, targets, measurement windows, reporting cadence, and remedies for missed SLAs, such as service credits, cure periods, and escalation paths.

Payment Terms

Specify fees, invoicing frequency, payment due dates, accepted payment methods, conditions for withholding, and ties between acceptance and final payment.

Change Management

Set a written change-order process for scope changes, required approvals, pricing adjustments, and revised timelines to avoid scope creep and billing disputes.

Insurance & Indemnity

State required insurance types and minimum limits, indemnity responsibilities, and procedures for notice, defense, and settlement of third-party claims.

Termination & Remedies

List termination rights, notice and cure periods, liquidated damages if applicable, transition assistance obligations, and post-termination deliverable handling.

Step-by-step: prepare, negotiate, and finalize the contract

Follow this sequential process to prepare and execute a Performance Services Contract efficiently.

  • 01
    Draft SOW: Draft the Statement of Work with measurable deliverables.
  • 02
    Review Legal: Have counsel review liability and indemnity clauses.
  • 03
    Agree Terms: Negotiate payment, SLAs, and change control.
  • 04
    Execute: Collect signatures and distribute fully executed copies.

Online workflow settings for digital signing

Typical online workflow settings for secure digital completion, audit trail capture, and signer authentication of the Performance Services Contract.

Field Configuration
Signer sequence and routing order Sequential or parallel flow; designate lead signer.
Authentication method for signer verification Email link, SMS code, or knowledge-based authentication.
Field validation and conditional logic rules Enforce formats, required fields, and conditional visibility.
Audit trail retention and evidence settings Capture IP, timestamps, action log, and signed PDF.

Digital signing and submission requirements

For secure eSubmission and signing, confirm platform support for required file formats, signer authentication strength, audit trails, and secure storage before distributing the contract.

  • Supported Formats: PDF, DOCX, HTML
  • Integrations: Salesforce, NetSuite, Google Workspace
  • Authentication Options: Email, SMS, KBA, SSO

Where executed contracts are routed and stored

High-level routing options and recommended destinations for filing, client distribution, and secure storage after contract execution.

  • Client Records: Store the executed copy in the client's contract repository.
  • Finance: Send invoice and signed contract to accounts payable.
  • Project Team: Deliver SOW, onboarding, and acceptance criteria to operations.
  • Legal Archive: Retain a master copy in legal or compliance archives.

Key dates and deadlines to track

Track these calendar dates to manage obligations, billing, and dispute windows for the Performance Services Contract.

Effective Date (commencement):

Date when contract obligations and timelines begin.

Milestone Acceptance Deadlines:

Deadlines for deliverable review, testing, and formal acceptance.

Invoice Submission Deadline:

Dates by which invoices must be submitted for payment.

Change-Order Notice Period:

Time allowed to propose and accept scope or price changes.

Termination Notice Period:

Advance notice required to terminate under contract terms.

Common mistakes when preparing a Performance Services Contract

  • Vague scope language that omits measurable deliverables or acceptance criteria, creating room for dispute over whether obligations were met.
  • Incomplete payment terms or missing invoicing requirements, which lead to delayed payments, disputes, and reconciliation problems between finance teams.
  • Designating an unauthorized signatory or failing to match legal entity names to tax records, undermining enforceability and causing tax-reporting issues.
  • Omitting a clear change-order process and dispute resolution mechanism, which increases cost and schedule risk when requirements shift.

Penalties and practical risks of an incorrect contract

Payment Withholding: May trigger 1099 backup withholding.
Breach Damages: Exposure to contractual damages and indemnity claims.
Termination Costs: Costs for early termination or transition assistance.
Regulatory Violations: Noncompliance risk where services involve regulated data.
Delayed Performance: Missed SLAs can incur credits or reputational harm.
Invalid Signature: Improper execution can jeopardize enforceability.

How organizations use Performance Services Contracts in practice

Practical examples show how standardizing contracts improves execution speed and reduces disputes across different organizations.

Optica Ventures

Optica Ventures standardized its Performance Services Contract and SOW templates to speed onboarding across clients.

  • Result: faster execution and fewer disputes.
  • The COO reported fewer invoice holds and clearer acceptance testing, which improved vendor accountability, accelerated renewals, and allowed finance to forecast revenue more reliably.

Fertility Centers of Illinois

Fertility Centers of Illinois used a standardized contract to manage external professional services across multiple clinics.

  • Result: consistent compliance and secure recordkeeping.
  • Management noted improved integration with back-office systems, easier audit responses, and confidence in executing data-protection clauses across mobile and onsite operations.

Required information fields to capture on the contract

Effective Date: MM/DD/YYYY format
Party Name: Legal entity and EIN
Scope Reference: SOW exhibit number
Payment Amount: Currency and terms
Service Levels: Metrics and targets
Signatures: Printed name, title, date

Practical tips for accurate and efficient contract completion

Apply these best practices to reduce errors, accelerate signoff, and improve enforceability.

Use a clear, exhibit-driven Statement of Work
Attach detailed, numbered exhibits that list deliverables, acceptance tests, and schedules. This reduces interpretive risk by keeping commercial terms separate from boilerplate legal language and simplifies future amendments.
Tie payments to acceptance criteria
Make at least a portion of compensation contingent on objective acceptance events. This protects the client against incomplete performance and gives the provider clear conditions for receipt of funds.
Limit broad indemnities and clarify insurance
Specify narrow, business-relevant indemnities and list minimum insurance limits and types. Include notice, defense, and settlement procedures to reduce ambiguity during claims.
Keep a versioned audit trail and signed PDFs
Maintain tamper-evident signed copies with timestamps, IP addresses, and signer authentication logs so the executed agreement can be reproduced for audits or disputes.

Comparing eSignature vendors for managing Performance Services Contracts

Core vendor pricing and capability differences to consider when selecting an eSignature provider for contract execution and lifecycle management.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently asked questions about Performance Services Contracts

Answers to common questions on enforceability, eSigning, notarization, retention, and correcting execution errors.


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