A Services Engagement Agreement (also known as a Professional Services Engagement Letter Template) sets out the terms and conditions between a business and a service provider. Service Agreements are used to hire service providers or independent contractors, not employees.
Service Engagement Agreements cover a number of key commercial and legal terms including the nature of the legal relationship, the type of services to be provided, the term of the services, insurance, liabilities and indemnities.
Each Business Kitz resource contains comprehensive guidance notes as well as helpful suggestions to assist you with populating the document.
Our Services Engagement Agreement Template includes an introductory template letter that covers:
- The nature of the engagement
- How the agreement should be executed
An editable schedule with detailed instructions that you can amend (to suit your business) that covers:
- Start and end dates
- Service provider
- Key personal
- Qualifications, licenses, memberships or registrations
- Scope of services
- Invoicing details
Terms and conditions that you can amend that covers:
- Equipment and property
- Fees and expenses
- Invoicing and payments
- Intellectual property
- Limitation of liability
- Protection of the principal’s business
- Execution page
Why does my business need a Services Engagement Agreement?
Agreement to the terms of a Professional Services Engagement Letter or Agreement are not only essential to protect a business legally, however, underpin the communication between a service provider and a customer to ensure both parties are on the same page.
It is essential that a business is diligent when engaging service providers when the service provider is a contractor or a sole trader as this can present a raft of issues in the eyes of Fair Work and the Australian Taxation office.
There are many cases under Australian law where service providers, especially sole traders, are considered employees under Australian law and businesses are left responsible for unexpectedly paying employee entitlements.
Putting a services agreement in place can assist in avoiding claims, however, it is important to understand an agreement can sometimes be overlooked if the arrangement is still indicative of an employee relationship.
We recommend utilising the ATO’s contractor vs employee tool, calling Fair Work on 13 13 94 or seeking legal advice via Legal Kitz if you are unsure of the nature of the relationship (or how the relationship may be perceived) under Australian law.
Contractor vs employee disputes are a very wide ranging issue for both contractor and employees. This Service Engagement Agreement Template is very comprehensive for parties who have or will have a clear working relationship, however, as always, we strongly urge you to seek advice if you are unsure of the nature of the relationship.
Alternatively, if you are a service provider, we recommend using a Service Provider Agreement Template to govern the relationship between yourself and the party you are providing your services to.
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