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Professional Service Contract

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PROFESSIONAL SERVICE CONTRACT

This Professional Service Contract ("Agreement") is entered into as of Effective Date: by and between Service Provider: , an entity of type , with principal place of business at and Client Name: , an entity of type , with principal place of business at .

RECITALS

WHEREAS, Service Provider has represented that it possesses the professional expertise, personnel and facilities necessary to perform the services described in this Agreement; and

WHEREAS, Client desires to engage Service Provider to perform such services and Service Provider is willing to perform such services on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows:

1. ENGAGEMENT; SCOPE OF SERVICES

1.1 Engagement. Client hereby engages Service Provider, and Service Provider accepts engagement, to perform the professional services described in the Scope of Services attached hereto and incorporated by reference ("Services"). The Scope of Services shall identify deliverables, milestones and acceptance criteria.

2. TERM; TERMINATION

2.1 Term. This Agreement shall commence on the Effective Date and continue for the period set forth in the Scope of Services or until terminated as provided in this Section.

2.2 Termination for Convenience. Either party may terminate this Agreement for convenience upon thirty (30) days' prior written notice to the other party.

2.3 Termination for Cause. Either party may terminate this Agreement immediately upon written notice if the other party materially breaches any term of this Agreement and fails to cure such breach within fifteen (15) days after receipt of written notice specifying the breach.

2.4 Effect of Termination. Upon termination, Client shall pay Service Provider for Services performed through the effective date of termination and for non-cancellable obligations incurred by Service Provider. Service Provider shall deliver all work in progress to Client and shall return all Client Confidential Information.

3. COMPENSATION; PAYMENT

3.1 Fees. As full compensation for the Services, Client shall pay Service Provider the fees set forth in the Scope of Services or, if not specified, at the following rate: per hour, or fixed fee of as applicable.

3.2 Invoicing and Payment. Service Provider shall submit invoices in accordance with the invoice schedule set forth in the Scope of Services or monthly in arrears. Invoices are due and payable within days of receipt. Late payments shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law.

3.3 Taxes. Each party shall be responsible for its own taxes arising from the performance of this Agreement. Service Provider shall be responsible for all employment taxes on amounts paid to Service Provider's personnel.

4. INDEPENDENT CONTRACTOR

Service Provider shall perform the Services as an independent contractor and not as an employee, agent, or partner of Client. Service Provider shall have sole responsibility for the payment of wages, taxes and benefits to its employees and contractors and for compliance with applicable employment laws.

5. CONFIDENTIALITY

5.1 Definition. For purposes of this Agreement, "Confidential Information" means non-public information disclosed by a party that is marked or identified as confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure.

5.2 Obligations. Each receiving party shall (a) hold Confidential Information in confidence using at least the same degree of care it uses to protect its own confidential information, (b) use Confidential Information only for the purposes of performing this Agreement, and (c) not disclose Confidential Information to any third party except to its personnel and advisors who have a need to know and are bound to confidentiality obligations no less protective than those in this Agreement.

5.3 Exceptions. Confidential Information shall not include information that is or becomes publicly known through no breach of this Agreement, is received from a third party without restriction, or is independently developed without the use of the disclosing party's Confidential Information. The receiving party may disclose Confidential Information to the extent required by law, provided it gives advance notice to the disclosing party where legally permissible.

6. INTELLECTUAL PROPERTY

6.1 Work Product. Except as expressly set forth herein, all tangible and intangible deliverables created by Service Provider specifically for Client under this Agreement ("Work Product") shall be deemed a work made for hire to the extent permitted by law. To the extent any Work Product does not qualify as work made for hire, Service Provider hereby assigns to Client all right, title and interest in and to such Work Product.

6.2 Pre-existing Materials. Service Provider shall retain ownership of its pre-existing materials and tools, including general knowledge, know-how and methods. Service Provider grants Client a non-exclusive, royalty-free license to any pre-existing materials embodied in the Work Product to the extent necessary for Client's use of the Work Product.

7. REPRESENTATIONS; INDEMNIFICATION; INSURANCE

7.1 Representations. Each party represents that it has the full power and authority to enter into this Agreement and perform its obligations hereunder, and that its performance will not violate any contract, law or obligation to any third party.

7.2 Indemnification by Service Provider. Service Provider shall defend, indemnify and hold harmless Client and its officers, directors and employees from and against any third-party claims, liabilities, damages and expenses arising out of Service Provider's gross negligence, willful misconduct or breach of its representations, including infringement claims arising from the Work Product, except to the extent such claims arise solely from Client's modifications or misuse.

7.3 Insurance. Service Provider shall maintain, at its expense, commercial general liability and professional liability insurance with limits adequate for the Services and industry standards. Upon request, Service Provider shall provide certificates evidencing such coverage.

8. LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM A PARTY'S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, BREACH OF CONFIDENTIALITY OR INDEMNIFICATION OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. THE AGGREGATE LIABILITY OF EITHER PARTY ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE TOTAL FEES PAID OR PAYABLE TO SERVICE PROVIDER UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO LIABILITY.

9. SUBCONTRACTING

Service Provider may engage subcontractors to perform portions of the Services provided that Service Provider remains responsible for their acts and omissions and ensures subcontractors comply with the terms of this Agreement.

10. NOTICES

All notices, requests and other communications required or permitted under this Agreement shall be in writing and shall be delivered to the addresses below by certified mail, nationally recognized overnight courier, or personal delivery, or by email with confirmation. Notices are effective upon receipt.

11. AMENDMENTS; WAIVER; COUNTERPARTS

11.1 Amendments. This Agreement may be amended only by a written instrument executed by authorized representatives of both parties.

11.2 Waiver. No waiver of any right shall be effective unless in writing signed by the waiving party. A waiver of any breach shall not constitute a waiver of any other or subsequent breach.

11.3 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 delivered by electronic means shall be binding.

12. GOVERNING LAW; DISPUTE RESOLUTION

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

12.2 Dispute Resolution. The parties shall first attempt to resolve disputes through good faith negotiation. If unresolved within thirty (30) days, the parties agree to mediate in good faith before initiating litigation. Either party may seek injunctive relief when appropriate.

13. ENTIRE AGREEMENT; SEVERABILITY

13.1 Entire Agreement. This Agreement, including the Scope of Services and any attachments, constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements and understandings.

13.2 Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect and such provision shall be reformed only to the extent necessary to make it enforceable.

14. MISCELLANEOUS

The parties have executed this Agreement through their duly authorized representatives as of the Effective Date first written above.

Service Provider:

By:

Date:

Client:

By:

Date:

Enter text✕

What a Professional Service Contract Covers

A Professional Service Contract is a written agreement between a service provider and a client that defines the scope of work, deliverables, schedule, payment terms, intellectual property allocation, confidentiality, warranties, limitation of liability, and termination conditions. In the United States these agreements are enforceable as written contracts when they meet common-law contract elements; electronic execution is allowed under the ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes where adopted.

Why a Clear Service Agreement Matters

A Professional Service Contract reduces ambiguity, sets measurable expectations, and creates enforceable obligations between parties. Properly drafted contracts limit disputes, allocate risk, and document remedies in case of breach.

Why a Clear Service Agreement Matters

Who Commonly Creates and Signs These Contracts

Typical parties include individual consultants, professional firms, vendors, corporate clients, and procurement or legal teams that manage vendor relationships.

  • Independent consultants and freelancers offering defined services to businesses and individuals.
  • Small and mid-market companies engaging vendors for project-based or retainer services.
  • Procurement, legal, and finance teams that review, approve, and archive executed agreements.

Each signer’s role affects required fields, authorization levels, and whether additional approvals or attestations are needed before execution.

Core Sections to Include in the Contract

A complete Professional Service Contract groups rights and obligations into discrete sections so each party understands performance expectations and remedies.

Scope of Work

Describe tasks, deliverables, acceptance criteria, and any excluded work in enough detail to reduce disagreements about performance.

Payment Terms

Specify amounts, payment schedule, invoicing requirements, late fees, and any retainers or milestone-based payments.

Schedule

List start dates, milestone deadlines, delivery windows, and any dependencies that could affect obligations or extensions.

Confidentiality

Define confidential information, permitted disclosures, duration of obligations, and required safeguards for sensitive data.

Warranties & Liability

State any service warranties, caps on liability, indemnities, and disclaimers that allocate commercial risk between parties.

Termination

Detail termination for convenience and cause, notice periods, final payment, and transition or wind-down responsibilities.

Step-by-Step: Filling and Finalizing the Contract

Follow a consistent sequence to draft, approve, and execute the agreement to reduce review cycles and errors.

  • 01
    Gather Information: Collect contact, tax ID, and billing details from all parties.
  • 02
    Draft Terms: Draft scope, fees, timeline, and risk allocation in clear language.
  • 03
    Legal Review: Have procurement or counsel check governing law and liability clauses.
  • 04
    Sign & Archive: Execute electronically if permitted, then retain an executed copy and audit trail.

Typical Online Signing Flow

Electronic execution follows defined steps that produce a signed document and an audit record suitable for legal reliance under U.S. law.

  • Upload Document: Upload the contract file to the signing platform.
  • Place Fields: Add signature, date, and any required data fields.
  • Send to Signer: Send by email or share a signing link for recipient action.
  • Complete & Store: System captures timestamps, IPs, and returns executed copies.

Configuring a Digital Approval Workflow

Configure signer order, authentication, reminders, and retention to match internal controls and legal requirements.

Field Configuration
Authentication Email link | SMS code | KBA optional
Signing Order Sequential or parallel routing choice
Reminders Automatic reminders every 3 days
Retention Audit trail saved with document

Sharing, Platforms, and File Formats

Choose platforms and formats that preserve the contract’s integrity and the audit trail during transmission and storage.

  • Integrations: CRM and ERP systems supported
  • File Formats: PDF and DOCX are standard
  • Authentication: Email, SMS, or stronger methods

Ensure the chosen platform produces a tamper-evident signed file and searchable audit record to meet legal and compliance needs.

Key Dates and Typical Deadlines

Track contractual dates to avoid missed deliverables, late payments, or notice failures that can trigger disputes or penalties.

Effective Date:

Date when obligations commence; use MM/DD/YYYY.

Payment Due Date:

Net terms (e.g., Net 30) measured from invoice date.

Milestone Deadlines:

Specific dates tied to deliverables and acceptance.

Renewal or Notice:

Advance notice period for renewal or termination.

Dispute Notice Period:

Timeframe to give written notice of breach or claim.

Contract Lifecycle Milestones

Understand the sequential stages from negotiation through closeout so stakeholders can plan approvals and resource allocation.

01

Negotiation

Drafting and redline exchange between parties.

02

Execution

All authorized signers execute the agreement.

03

Performance Start

Work begins and milestones track progress.

04

Final Acceptance

Client accepts final deliverables and closes contract.

Common Preparation Errors to Avoid

  • Using vague scope language that leads to differing expectations and scope creep.
  • Failing to specify payment timing or invoicing requirements, causing delayed collections.
  • Allowing unauthorized signatories to execute agreements without board or delegated authority.
  • Neglecting confidentiality or data-handling terms when sensitive client information is exchanged.

Risks and Potential Consequences

Unenforceable Terms: Ambiguous clauses risk non-enforcement
Payment Disputes: Late payments and collections costs
Liability Exposure: Unlimited indemnities increase risk
Litigation Costs: Expense of dispute resolution
Regulatory Fines: HIPAA or other violations possible
Tax Penalties: Incorrect contractor classification risks

Security and Compliance Considerations

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Audit Trail: Timestamps, IP addresses, and action logs
HIPAA Support: BAA available where required
Regulated Compliance: 21 CFR Part 11 and SOC 2 Type II
Access Controls: Role-based permissions and SSO options
Standards: ISO 27001 and WCAG 2.0 AA

eSignature Pricing and Feature Snapshot

Compare baseline pricing and common feature availability across providers to choose a plan that matches contract volume and compliance needs.

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
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Frequently Asked Questions and Troubleshooting

Answers to common legal and technical questions about executing and managing Professional Service Contracts electronically.


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