Can this agreement be signed electronically?

Yes. Electronic signatures meet U.S. legal requirements under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided parties demonstrate intent, consent, attribution, and records can be retained and reproduced.

What documentation supports material reimbursement?

Require supplier invoices or original receipts attached to each invoice. Without receipts, reimbursements are often disputed; specify acceptable substitutes and retention rules in the agreement.

How to handle unauthorized work claims?

Include a written change-order process that requires approval before extra work proceeds. Disallow retrospective authorizations unless both parties sign a documented waiver to reduce disagreement risk.

What happens if a party uses electronic signatures but later contests validity?

Preserve the platform audit trail, signer authentication evidence, and consent records. Those items satisfy the ESIGN/UETA 4-prong test and strengthen enforceability in court or arbitration.

When is notarization necessary?

Commercial T&M Agreements rarely require notarization. Notarization may be requested for deeds, certain affidavits, or records intended for recording, not as a general requirement for these contracts.

How to avoid billing disputes proactively?

Use precise labor classifications, require daily or weekly time entries, attach material receipts, use a change-order template, and set an invoice dispute window to resolve issues promptly.

Electronic Signature
Templates
Legal
Time and Materials Agreement

Time and Materials Agreement

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TIME AND MATERIALS AGREEMENT

This Time and Materials Agreement (the Agreement) is entered into as of by and between , located at ("Client"), and , located at ("Contractor").

RECITALS

WHEREAS, Client desires to engage Contractor to perform services consisting of time and materials work in connection with (the Work); and

WHEREAS, Contractor has represented that it has the personnel, expertise and resources necessary to perform the Work and is willing to perform the Work on a time and materials basis in accordance with the terms and conditions of this Agreement; and

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the performance of the Work and payment therefor.

NOW, THEREFORE

In consideration of the mutual covenants and promises contained herein, the parties agree as follows:

1. DEFINITIONS

1.1 "Work" means all tasks, labor, deliverables, and services provided by Contractor as described in Section 2 and any agreed change orders. 1.2 "Materials" means supplies, parts, equipment and consumables furnished by Contractor to perform the Work. 1.3 "Rates" means the labor rates and other charges set forth in Section 4.

2. SCOPE OF WORK

2.1 Contractor shall perform the Work described as follows:

Statement of Work / Description

2.2 The parties may execute written change orders signed by authorized representatives of both parties to modify the scope, schedule, or compensation.

3. TERM

3.1 This Agreement commences on the Effective Date and continues until completion of the Work or earlier termination as provided herein.

4. RATES, MATERIALS AND CHARGES

4.1 Labor shall be billed at the following rates: Lead/Principal Rate: $ per hour; Senior Rate: $ per hour; Junior Rate: $ per hour.

4.2 Materials will be billed at actual cost plus markup of . Travel time will be charged at $ per hour and reimbursable travel expenses will be billed at cost.

5. INVOICING AND PAYMENT

5.1 Contractor shall submit invoices to Client for labor performed, materials furnished and expenses incurred, together with reasonable supporting documentation.

5.2 Unless otherwise stated in an invoice, Client shall pay undisputed amounts within days of receipt. Overdue amounts shall accrue interest at or the maximum permitted by law, whichever is less.

6. CHANGE ORDERS

6.1 All changes to the Work shall be made by written change order signed by authorized representatives of both parties. No work beyond the agreed scope will be performed unless approved in writing.

Change Order Approval Required?

Yes — all change orders must be approved in writing

7. EXPENSES

7.1 Reimbursable expenses include travel, lodging, meals, shipping, and materials, provided such expenses are reasonable and pre-approved by Client where required.

Reimbursable Expense Policy / Notes

8. TAXES

8.1 Unless otherwise agreed, Client shall be responsible for any sales, use, value-added, or other taxes imposed on fees or materials, excluding taxes based on Contractor's net income.

9. INTELLECTUAL PROPERTY

9.1 Unless otherwise agreed in writing, Contractor grants Client a nonexclusive, nontransferable license to use Deliverables for Client's internal business purposes. Contractor retains ownership of preexisting intellectual property and tools used in performing the Work.

Deliverable Ownership Option

Client receives assignment of intellectual property in Deliverables upon full payment

10. CONFIDENTIALITY

10.1 Each party shall hold confidential all information disclosed by the other party that is designated confidential or would reasonably be considered confidential. Confidential information shall not be disclosed except as required by law or as necessary to perform the Work.

Confidentiality Period (years)

11. WARRANTIES; DISCLAIMER

11.1 Contractor warrants that services will be performed in a professional and workmanlike manner in accordance with generally accepted industry standards. Contractor's sole obligation for breach of this warranty is, at Contractor's option, re-performance of the nonconforming services or refund of amounts paid for such services.

11.2 EXCEPT FOR THE LIMITED WARRANTY IN SECTION 11.1, CONTRACTOR DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

12. INDEMNIFICATION

12.1 Contractor shall indemnify, defend and hold Client harmless from and against any third-party claims arising out of Contractor's negligent performance of the Work or breach of this Agreement. Client shall indemnify Contractor for claims arising from Client's negligence or misuse of the Deliverables.

13. LIMITATION OF LIABILITY

13.1 EXCEPT FOR LIABILITY ARISING FROM WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, EACH PARTY'S AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED THE TOTAL AMOUNTS PAID OR PAYABLE TO CONTRACTOR UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE CLAIM. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR PUNITIVE DAMAGES.

Liability Cap Amount

14. INSURANCE

14.1 Contractor shall maintain insurance customary for the industry, including commercial general liability and worker's compensation where required by law. Upon request, Contractor shall provide certificates evidencing such coverage.

Minimum Insurance Requirements or Notes

15. TERMINATION

15.1 Either party may terminate this Agreement upon days' prior written notice to the other party. Upon termination, Client will pay Contractor for all work performed and materials ordered through the effective date of termination.

16. REMEDIES

16.1 The rights and remedies provided in this Agreement are cumulative and in addition to any other remedies available at law or in equity.

17. NOTICES

17.1 All notices required or permitted under this Agreement shall be in writing and delivered to the parties at their respective addresses set forth below or such other address as either party may specify in writing in accordance with this Section.

Client Notice Address Contractor Notice Address

18. GOVERNING LAW

Governing State Law

19. ENTIRE AGREEMENT; SEVERABILITY; AMENDMENT

19.1 This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings. 19.2 If any provision of this Agreement is found to be invalid or unenforceable, such provision shall be severed and the remainder of the Agreement shall remain in full force and effect. 19.3 No amendment to this Agreement shall be effective unless it is in writing and signed by authorized representatives of both parties.

20. WAIVER; COUNTERPARTS

20.1 No failure or delay by either party in exercising any right shall operate as a waiver thereof. 20.2 This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement.

Client:

By:

Date:

Contractor:

By:

Date:

What a Time and Materials Agreement Is and when it’s used

A Time and Materials Agreement is a contract that sets rates for labor and reimbursable costs for materials, supplies, and equipment used to perform work. It typically specifies hourly or daily labor rates, unit prices for materials, billing intervals, invoicing rules, and responsibility for taxes and shipping. The agreement also defines procedures for change orders, timekeeping and verification, dispute resolution, and termination. Time and Materials is commonly used where scope is uncertain or variable—construction change work, professional services, IT projects, and maintenance engagements—and can be executed electronically when parties meet applicable e-signature requirements.

When Time and Materials makes contractual sense

Time and Materials provides flexibility to accommodate unknown scope, allows clients to pay for actual work performed, and creates a clear basis for material reimbursements. It simplifies handling of change orders and unexpected conditions while preserving auditability of labor and costs when rates and documentation standards are defined upfront.

Who typically prepares or signs a Time and Materials Agreement

The agreement is used by a range of project stakeholders who need flexible billing tied to actual labor and purchases.

General contractors who bill hourly for onsite labor and recover materials with documented receipts.
Subcontractors and specialty trades that handle variable site conditions and need transparent billing.
Owners, facilities managers, or clients who accept variable scope but require clear rate and invoicing rules.

Choose Time and Materials when project scope is uncertain or changeable, and ensure rates, approval steps, and documentation are agreed in writing to reduce disputes.

Essential clauses to include in a professional agreement

A well-drafted Time and Materials Agreement balances flexibility with controls: it must define scope, rates, documentation, approvals, and remedies so billing is transparent and enforceable.

Scope of Work

Define tasks included and excluded, reference exhibits or SOWs, and explain how unplanned tasks are authorized to avoid billing disputes.

Labor Rates

List hourly or daily rates by role or classification, specify overtime rules, travel-time billing, and whether rates change over time.

Material Pricing

State unit prices, markup or invoicing method for materials, and requirement for original receipts or supplier invoices for reimbursement.

Billing Schedule

Specify invoicing frequency, payment terms, late payment interest, billing dispute process, and required backup documentation.

Change Orders

Describe written authorization process for extra work, how to price changes, and timelines for approval before work continues.

Termination & Remedies

Set termination notice, final accounting procedures, ownership of work product, and any liquidated damages or holdback arrangements.

How to complete the Time and Materials Agreement step by step

Follow these sequential steps to prepare, approve, and execute the agreement while preserving documentation and approval traces.

01

Prepare draft: Populate parties, scope, rates, and materials rules.
02

Review internally: Legal and finance confirm rates, tax handling, and payment terms.
03

Obtain approvals: Get manager or owner signoff on scope and budget.
04

Execute: Sign both parties and distribute executed copies with invoice guidance.

Configuring an online workflow for this agreement

When using an e-signature platform, set up fields and authentication to match your approval and recordkeeping requirements.

Field	Configuration
Authentication Level	Email link, SMS code, or enhanced ID verification depending on risk.
Signature Fields	Place signer, date, and initial fields for each party and section.
Conditional Sections	Show change-order blocks only if the checkbox for extras is selected.
Retention Settings	Store signed copies and audit trail for the required retention period.

Typical execution flow for digital Time and Materials Agreements

A common e-signature flow keeps responsibility clear and captures the audit trail for enforceability.

Upload Document: Upload the finalized agreement to your signing platform.
Place Fields: Add signature, date, initials, and required data fields.
Assign Signers: Enter signer emails and assign signing order if needed.
Send for Signature: Dispatch invites and capture the platform audit trail on completion.

Technical and compliance requirements for e-execution

Make sure the chosen platform supports your required authentication, record retention, and integrations.

Authentication Options: Email, SMS, KBA, or identity verification per transaction risk level.
Document Formats: PDF or DOCX with audit trail and tamper-evident storage.
Integrations: Connectors for ERP, CRM, and storage systems reduce manual steps.

Confirm the platform meets legal and industry obligations (ESIGN/UETA, HIPAA where applicable) and that retention and export capabilities match your policies.

Essential security and compliance controls to require

Encryption in transit: TLS 1.2/1.3

Encryption at rest: AES-256

Audit trail: Timestamps, IP, and action log

HIPAA option: BAA available

Regulatory standards: SOC 2 Type II, ISO 27001

FDA compliance: 21 CFR Part 11 support

Key risks and potential penalties to be aware of

Late 1099 filing: $60–$330 per form (IRC §6721)

I-9 violations: $281–$2,789 per violation

Backup withholding: 24% withholding risk for missing TIN

Payment disputes: Interest, collection costs, and litigation risk

Misclassification: Payroll taxes and penalties

Unauthorized changes: Contract invalidation risk without written approval

Common mistakes when preparing a Time and Materials Agreement

Failing to define labor classifications precisely leads to disputed invoices and retroactive adjustments in rates.
Not requiring original supplier invoices or receipts for materials allows reimbursement disputes and audit challenges.
Permitting verbal change orders without written confirmation creates enforceability problems and billing disagreements.
Omitting a clear billing schedule or dispute resolution clause delays payment and increases collection costs.

eSignature vendor comparison for executing Time and Materials Agreements

Select an eSignature provider that meets authentication, retention, and industry compliance needs; signNow is listed first per comparison rules.

	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	Varies
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Example scenarios showing common uses

Real-world examples illustrate how Time and Materials agreements are applied across projects and organizations.

Construction repair project

A contractor is asked to remediate unforeseen water damage

Contractor documents labor hours and material receipts
The T&M agreement lets the owner authorize repairs quickly while preserving a clear invoicing record and change-order approvals to prevent disputes.

IT support engagement

An IT vendor responds to urgent systems work without a fixed scope

Work is billed hourly with approved parts at cost
The agreement defines response rates, escalation approval, and invoicing cadence so the client pays only for actual hours and components consumed.

Frequently asked questions and troubleshooting

Answers to common questions about enforceability, signatures, and dispute handling for Time and Materials Agreements.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures meet U.S. legal requirements under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided parties demonstrate intent, consent, attribution, and records can be retained and reproduced.
What documentation supports material reimbursement?
Require supplier invoices or original receipts attached to each invoice. Without receipts, reimbursements are often disputed; specify acceptable substitutes and retention rules in the agreement.
How to handle unauthorized work claims?
Include a written change-order process that requires approval before extra work proceeds. Disallow retrospective authorizations unless both parties sign a documented waiver to reduce disagreement risk.
What happens if a party uses electronic signatures but later contests validity?
Preserve the platform audit trail, signer authentication evidence, and consent records. Those items satisfy the ESIGN/UETA 4-prong test and strengthen enforceability in court or arbitration.
When is notarization necessary?
Commercial T&M Agreements rarely require notarization. Notarization may be requested for deeds, certain affidavits, or records intended for recording, not as a general requirement for these contracts.
How to avoid billing disputes proactively?
Use precise labor classifications, require daily or weekly time entries, attach material receipts, use a change-order template, and set an invoice dispute window to resolve issues promptly.

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