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Essential Documents for Sole Proprietors
Common Service Contract Questions
What is a service contract?
Service contracts are agreements for specific acts, such as painting your house or tuning your car, and are distinguishable from contracts for goods. They’re used predominantly by contractors, freelancers, and consultants and, generally involve one party paying another party to perform a certain act.
Does a service agreement need to be in writing?
It’s always a great idea to put your understanding in writing. Since service contracts are so often used by contractors dealing with other small businesses or even families, the temptation may be there to simply work on a handshake. That can be dangerous, though. Having an agreement in writing solidifies the responsibilities of both parties, ensuring that a service is performed at a fair price.
What should I do if a contract is broken?
Sometimes, things don’t work out and you need to get out of a contract. We have forms below that allow you to amend or terminate a contract, but of course both parties will need to sign those agreements to make things official. Consider using those to keep a clean record of your agreement and avoid misunderstandings. If the other party breaks a contract and doesn’t come through on their end of the bargain, you may want to start looking into small claims court.
What are some important aspects of a service contract?
After you hammer out the critical details like dates and payments you may be wondering what else to include. A clear and comprehensive description of the work to be done is critical to a service contract. Specify the whats, hows, and whens--if you’re building, be sure to name specific materials to be used or approved alternatives. Having all the details in a contract can protect your rights if anything goes wrong.
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