Service Agreement Template for the US: Clauses and Law That Apply (2026)

What is a US service agreement, and when do you need one? A US service agreement is a contract where one party agrees to perform services for another for payment. It covers consultants, agencies, IT and maintenance providers, marketing firms, and any work that is a service rather than a sale of goods. The agreement sets the scope, the fees, who owns the work, and how risk is shared. In the US a service agreement is governed by the common law of contracts of the state you choose, not by the Uniform Commercial Code, which governs the sale of goods. That line matters when a deal mixes both. This article is general guidance, not legal advice. Contract law is state law and worker classification rules change, so have a qualified professional review an agreement before you rely on it. Last verified October 2026. ## US service agreement template Copy the block below and fill the bracketed fields. ```

SERVICE AGREEMENT This Service Agreement ("Agreement") is made on [DATE] BETWEEN: [CLIENT NAME], a [STATE] [entity type] ("Client") AND [PROVIDER NAME], a [STATE] [entity type] ("Provider") 1. SERVICES The Provider will perform the services described in Exhibit A (the "Statement of Work"). Each new project may be added by a signed SOW that refers to this Agreement. 2. TERM This Agreement begins on [DATE] and continues until [END / ongoing until ended under clause 8]. 3. FEES AND PAYMENT The Client will pay [fees / rate] as set in the SOW. Invoices are due within [N] days. Late amounts carry interest at [rate allowed by law]. [Expenses reimbursed with prior approval.] 4. INDEPENDENT CONTRACTOR The Provider is an independent contractor, not an employee, partner, or agent of the Client. Each party pays its own taxes and is responsible for its own staff and benefits. 5. INTELLECTUAL PROPERTY [Deliverables created for the Client belong to the Client on full payment, assigned by the Provider.] The Provider keeps its pre-existing materials and grants the Client a licence to use them in the deliverables. 6. CONFIDENTIALITY Each party will keep the other's confidential information secret and use it only to perform this Agreement. 7. WARRANTIES AND DISCLAIMER The Provider will perform in a professional and workmanlike manner. Except as stated, the services are provided without other warranties to the extent the law allows. 8. TERM AND TERMINATION Either party may end this Agreement on [N] days written notice, or immediately for material breach not cured within [N] days. Fees earned before termination remain payable. 9. LIMITATION OF LIABILITY To the extent the law allows, neither party is liable for indirect or consequential loss, and each party's total liability is capped at [the fees paid in the prior [N] months]. 10. INDEMNITY Each party indemnifies the other against third-party claims arising from its own breach or wrongful act. 11. GOVERNING LAW AND DISPUTES This Agreement is governed by the laws of the State of [STATE], with disputes resolved in [courts / arbitration]. Signed - Client: __________ Provider: __________ Name / title / date Name / title / date

- **Fees and payment (clause 3).** Set the rate or fee, the invoice cycle, the payment window, and what happens if payment is late. Say whether expenses are reimbursed.
- **Independent contractor (clause 4).** State clearly that the provider is a contractor, not an employee. Saying so in the contract helps but does not settle the question; the tax and labor authorities look at the real relationship.
- **Intellectual property (clause 5).** Decide who owns the deliverables and whether ownership passes only on full payment. Let the provider keep its pre-existing tools and grant a licence instead.
- **Limitation of liability (clause 9).** A cap and an exclusion of indirect loss are standard and are usually enforced between businesses, subject to state limits. ## Common mistakes to avoid - A vague scope with no Statement of Work, which leads to arguments over what was promised.
- No IP clause, so ownership of the deliverables is unclear.
- Calling the provider a contractor while treating them like an employee, which can trigger reclassification and back taxes.
- No liability cap, leaving unlimited exposure.
- Payment terms with no late-payment remedy. ## A note on jurisdiction and current law - **State contract law.** A service agreement is governed by the common law of the state you choose in the governing-law clause. Core principles are broadly similar across states, but details such as enforceability of liability caps and interest on late payment differ.
- **Goods versus services.** The Uniform Commercial Code Article 2 governs the sale of goods, not services. If a deal mixes both, courts often apply the "predominant purpose" test to decide which law controls, so be clear whether your deal is mainly a service.
- **Worker classification.** Whether a provider is truly an independent contractor is decided by the facts, not just the label. The IRS uses a common-law control test, and some states, such as California, apply a stricter "ABC test." Getting this wrong can mean back taxes, penalties, and benefits claims. <!-- [VERIFY: state ABC-test adoption and scope changes; confirm current California and other state rules] -->
- **Sales tax on services.** Whether a service is taxable varies by state. Confirm locally. ## Where a contract workspace helps A template gets you a sound service agreement. The ongoing work is issuing consistent statements of work, checking each one for scope and liability risk before signing, and tracking renewals and obligations across many providers. Drafting each statement of work, reviewing scope and liability before you sign, and keeping renewal and obligation dates in view can all live in one AI workspace tuned to how your company buys or sells services in the US. [Adira](https://adiralaw.com) handles this in a single workspace for US service agreements and their SOWs. On its own this template is enough for a fair agreement; the workspace just keeps the SOWs and renewals connected.