Operating without a service agreement is like driving without insurance. Most of the time things go fine, but when they do not, you have no protection. A service agreement sets clear expectations upfront and gives both parties a reference point if something goes wrong.
Common issues that a service agreement prevents:
Full legal names, ABNs, and registered addresses of both the service provider and the client. If either party is a company, include the ACN.
The most important clause. Describe exactly what services will be provided, the standards expected, and what is explicitly excluded. Ambiguity here causes most disputes.
List each deliverable with acceptance criteria and due dates. Include a process for what happens if a deadline is missed or a deliverable is rejected.
Specify the fee structure (fixed, hourly, milestone-based), payment schedule, invoicing process, GST treatment, and late payment penalties.
Clarify who owns the work product. Common approaches: client owns everything, provider licenses to client, or provider retains background IP and assigns foreground IP.
Define what constitutes confidential information, the obligations of each party, exceptions (publicly available information, court orders), and duration of obligations.
Cap the provider's liability (typically to the total fees paid), exclude consequential losses, and include mutual indemnification for third-party claims arising from breach.
Specify notice periods for termination for convenience, immediate termination triggers (material breach, insolvency), and what happens on termination (final payment, return of materials).
The scope of work is where most service agreements succeed or fail. A vague scope leads to disagreements about what was included in the price. Here is how to write one that works:
"The Provider will design and develop a responsive 5-page marketing website using WordPress. Pages include: Home, About, Services, Portfolio, and Contact. The website will include a contact form with email notification, Google Analytics integration, and mobile-responsive design. The Provider will deliver 2 rounds of revisions on the design mockups and 1 round on the developed site. Content (text and images) will be supplied by the Client."
"The Provider will build a website for the Client."
This leaves virtually everything open to interpretation. How many pages? What features? How many revisions? Who provides the content?
A single agreed price for the entire scope. Best when the scope is well-defined and unlikely to change.
Tip: Include a variation clause for work outside the original scope, charged at an hourly rate.
Charged based on time spent. Best for ongoing or unpredictable work. Include a cap or estimate so the client knows what to budget.
Tip: Specify minimum billing increments (e.g. 15-minute blocks) and how time is tracked.
Payment tied to completed milestones. Best for larger projects with clear phases. Protects both parties.
Tip: Always include a deposit milestone (typically 30-50% upfront) to cover initial costs.
Regardless of fee structure, always specify: invoice timing, payment terms (e.g. 14 days), accepted payment methods, late payment interest (typically 2% per month), and whether prices include GST.
Our service agreement template covers all 8 essential clauses plus additional provisions for GST, force majeure, and governing law (Australian law by default). Here is how to use it:
The template is pre-drafted for Australian law with all essential clauses.
Your company name, ABN, and address are automatically populated.
Tell our AI assistant the specific details: client name, scope of work, payment terms. She generates a clean, complete document.
Check every clause, especially the scope of work and payment terms. Make sure all placeholders are replaced.
Enter their email, place signature and date fields, then send. They sign electronically from any device.