Service Agreement
A service agreement is the contract most small businesses sign most often, and the one most often replaced by an email saying "sounds good." It defines what will be done, for how much, by when — and, critically, what happens when the client asks for something that was not in the original scope.
Scope creep is a contract problem, not a personality problem
Every service provider has a story about the project that grew. It is rarely because the client was unreasonable. It is because the agreement described the work loosely enough that both parties could read it differently, and there was no stated process for handling a change. Without a change mechanism, every new request becomes an awkward negotiation about whether it was "already included" — a conversation that damages the relationship whichever way it goes.
What the template covers
Scope stated as what is included and what is not
The exclusions do more work than the inclusions. Naming what falls outside the engagement is what makes a change request obvious rather than contentious.
A change order process
How additional work is requested, priced and approved before it starts. A single paragraph converts scope creep from a conflict into an administrative step.
Payment schedule and late terms
Deposit, milestones or monthly, with a payment window and a stated consequence for late payment — including the right to suspend work.
Termination on both sides
How either party ends the engagement, with what notice, and what is owed for work completed to that point. Agreements that only allow the client to terminate are common and unbalanced.
How service contracts are treated
Contracts for services are governed by state common law rather than by Article 2 of the Uniform Commercial Code, which applies to sales of goods — a distinction that matters for mixed contracts, where courts generally apply the "predominant purpose" test to decide which body of law governs the whole agreement. Most states enforce a written service contract without formalities beyond signature, though some require writing for agreements that cannot be performed within one year under the Statute of Frauds. The signature is covered by the ESIGN Act, 15 U.S.C. § 7001, and by state UETA in 49 states, with New York applying State Technology Law § 304.
The project that grew by forty percent
A consultancy agreed a three-month engagement with a fixed fee and a one-paragraph scope. Over eleven weeks the client added a second workstream, two extra stakeholder groups and a reporting requirement, each time reasonably and each time assuming it was within scope. The consultancy delivered all of it rather than have the conversation. They finished on time, over budget by about forty percent of the fee, and did not take the renewal. Neither side had behaved badly. The agreement simply had no mechanism for what actually happened.
Questions people ask about this
What is the difference between a service agreement and a statement of work?
The service agreement sets the legal terms — payment, liability, IP, termination — and often covers an ongoing relationship. A statement of work describes a specific engagement's scope and deliverables under it. Small engagements frequently combine both.
Should I include a limitation of liability?
It is standard and usually reasonable, commonly capping liability at fees paid. Enforceability varies by state and certain liabilities cannot be limited, but a cap is a normal commercial term rather than an aggressive one.
Can I suspend work for non-payment?
Only if the agreement says so. Without an express right to suspend, stopping work risks being characterised as your breach rather than a response to theirs.
How do I handle expenses?
State whether expenses are included in the fee or billed separately, whether pre-approval is needed above a threshold, and how they are evidenced. Unstated expenses are a frequent source of invoice disputes.