How to Review a Professional Services Agreement (2026 Checklist)

A professional services agreement (PSA) governs the supply of expert services: consulting, systems implementation, design, advisory, managed delivery and the like. It often looks like a master services agreement with statements of work beneath it, but it carries extra weight on two points that matter for professional work: the standard of care the provider must meet, and the ownership of what the engagement produces. Reviewing one well means checking the usual risk clauses and also making sure the quality standard and the IP terms fit the kind of work being bought. This is general guidance, not legal advice. ## The fast answer: what to check first Check four things first. The scope and the standard of care (what is delivered and how good it must be). The IP ownership of deliverables. The limitation of liability and indemnities. Termination and what you keep on exit. For professional work the standard of care and the deliverables IP deserve more attention than in a simple supply contract. ## Clause-by-clause review checklist ### Scope of services and deliverables The agreement, usually through statements of work, should describe the services and deliverables precisely, with assumptions and dependencies. Check there are acceptance criteria for deliverables so "done" is objective and tied to payment, and that your own responsibilities (access, data, decisions) are realistic. ### Standard of care This is the clause that defines quality. The stronger customer position is that services are performed with the reasonable skill and care of a suitably qualified and experienced professional in the relevant field, and in line with good industry practice. Watch for weaker wording ("reasonable efforts", "as-is") that lowers the bar. Where regulated professions are involved, the standard may be set by law or professional rules. ### Fees and payment Identify the pricing model (fixed price, time and materials, or capped), the rates, invoicing, expenses, taxes and any milestones. Tie payment to accepted deliverables where possible. For retainers, check what unused time means and whether it rolls over. ### Personnel and key people Professional services depend on the people delivering them. Check whether key individuals are named, how they can be replaced, and whether you can object to a replacement. Look at non-solicitation terms and whether they are mutual and reasonable. ### Intellectual property Separate foreground IP (created in the engagement) from background IP (the provider's pre-existing methods, tools and templates). A common, fair position assigns bespoke deliverables to you and licenses the provider's background IP so you can use the deliverables. Make sure you are not left with a deliverable you cannot use because it depends on tools licensed only during the term. Flag third-party and open-source components. ### Warranties Expect a warranty that services meet the standard of care and that deliverables conform to the agreed specification for a period, with a remedy (re-perform or fix) if they do not. Note what other warranties are disclaimed. ### Confidentiality and data Check the confidentiality terms both ways, and, if personal data is processed, that a data processing agreement is attached and consistent with the rest of the contract. ### Limitation of liability and indemnities Check the cap and the carve-outs. Professional services often carry a cap tied to fees; weigh that against the potential harm of negligent advice or a failed implementation. Look for indemnities (commonly IP infringement, and sometimes breach of confidentiality or data protection) and whether they sit inside or outside the cap. ### Insurance A professional provider should carry professional indemnity (errors and omissions) insurance, and sometimes cyber and public liability, at levels that fit the work. Check you can request evidence and that cover is maintained for a period after the work ends, since claims can surface later. ### Term, termination and exit Check the term, termination for breach with a cure period, termination for convenience and on what notice, and what happens on exit: handover of deliverables and work in progress, return of materials and data, and which clauses survive. ### Subcontracting and compliance Check whether the provider can subcontract and remains responsible for subcontractors, and that it will comply with applicable laws, including anti-bribery and data-protection rules where relevant. ## Red flags to push back on A soft standard of care for expert work. Deliverables IP left with the provider when you paid for bespoke work. No acceptance criteria. A liability cap far below the harm negligent work could cause. No professional indemnity insurance, or cover that lapses the day the work ends. Termination for convenience the provider can use but you cannot. ## How the law changes by jurisdiction Contract law is national, so the same words do not behave the same everywhere. In common-law systems (India, the UK, Singapore, Australia, the US) courts lean on the written terms and read ambiguity against the drafter. Governing-law and jurisdiction clauses decide which country's rules apply and where disputes are heard; check they match where the parties and the assets actually are. In India, stamp duty and, for many instruments, registration are live concerns, and the Indian Contract Act 1872 governs formation. In the US, state law varies and the Uniform Commercial Code may apply where goods are involved. Across the EU and UK, data and consumer rules add mandatory terms you cannot contract out of. When in doubt, take local advice; this page is general information, not legal advice. ## A simple review workflow Start with scope, the standard of care and deliverables IP, since those define what you are really buying. Then fees and acceptance, then liability, indemnity and insurance, then termination and exit. Pull in the business owner to confirm the deliverables and acceptance tests are realistic. Keep an issues list with clause reference, risk and proposed change, and mark must-haves before you negotiate. ## One workspace for drafting, review and tracking Everything above is work you can do by hand: read the draft, mark the risky positions, line up your redlines, remember the dates. The friction is rarely the reading. It is that the draft, the comments, the versions, the signed copy and the renewal date usually live in five different places. The simple idea behind an AI contract workspace is to keep that work together: draft from your own catalogue, see each clause flagged favourable, neutral or unfavourable to you, edit clauses in plain English and get a clean diff, keep a live activity timeline so every version is traceable, and track key dates and obligations so renewals and notices do not slip. Adira is one such workspace, built on Anthropic's Claude and tuned to how your company contracts. It is India-first today; deeper support for other jurisdictions and a single legal health pane (the Company Command Centre) are on the roadmap. None of that replaces legal advice on a specific deal. It just means the review you ran once does not have to be rebuilt from scratch next quarter.