A professional services agreement is essentially a form that collects all the relevant information in a professional endeavor between two parties. Its purpose is to aid in preparing a functional contract for said services between the parties. It is typically divided into two sections – the agreement, and the exhibit. The agreement works to declare, in writing, that both parties intend to work on a particular project and freely agree to do so. The exhibit pertains to the specifics and typically contains the description and scope of the job that needs to be done, the time frame within which it should be completed, and even details the compensation package. Additional particulars and/or deliverables that the client expects from the service provided may also be outlined in this section.
When is a Professional Services Agreement Necessary?
According to the University of California, a professional services agreement works as a “blanket agreement” to contract a specialist for a particular job. For the purposes of this agreement, the term ‘Professional’ is very clearly defined – It is a person who holds a license issued by a governmental body in the field in which they specialize. Subsequently, a “Professional Service” is one where such a license is required. As a result, a professional services agreement is typically used when a client needs to contract a licensed specialist for assistance with a particular task. Most commonly, it is used by organizations for consultancy reasons, and typically includes clauses like a non-disclosure agreement and a confidentiality clause. For these reasons, the exhibit section requires both parties to explicitly state what they expect from each other by way of a professional services agreement.
What is an Exhibit in a Professional Services Agreement?
An exhibit is a separate section that is attached to a professional services agreement form. It goes over the specifics and particulars of the contract and explicitly states the details, terms, conditions, and expectations of each party as they prepare to formalize their agreement. Generally, this includes things like defining the service(s) that the client requires, the timeframe and if applicable, a schedule that the contract is obligated to abide by, the specifics that pertain to payment, i.e., the amount to be paid, method of payment and date on which payment is due. This section may also include other specifics, such as protocol in case of breach and other professional expectations the client may have.
Drafting a Professional Services Agreement
Drafting a professional services agreement is a fairly straightforward affair. It functions as a precursor to a legal contract, a declaration of intent to engage in a professional relationship, and a hard copy of the expectations both parties have from one another. As a result, drafting such an agreement isn’t very tricky. To help you out, we’ve written a sample agreement that also functions as a template, so feel free to use this resource when drafting your own professional services agreement!
PROFESSIONAL SERVICES AGREEMENT TEMPLATE
This Professional Services agreement, dated _ (Date) between the parties, who will hereby be referred to as “The Client” _ with a mailing address located at ________________________________________________ and “The professional” with a mailing address located at _____________________________________________________
The purpose of this agreement is for the client to enlist the professional in a working capacity, which the professional, who agrees that he/she is in possession of the requisite skills and is competent to perform the necessary task(s), willingly agrees to.
I. SERVICE(s) OFFERED
(Here, the professional is required to list out what exactly they are offering to do for the client. This must also be added to the Exhibit Section. )
II. REQUIREMENTS PERTAINING TO SERVICES OFFERED
(Here, Clients must explicitly state what they need to be done. Additionally, if they have requirements that have been clearly listed, they must attach those here as well.)
III. NATURE OF SERVICES
(Here, the client will generally add a number of clauses and stipulations. These typically include non-disclosure, exclusivity, copyright, trademark use, professional conduct, and other similar clauses.)
The client agrees to pay the professional an amount of __$ for the entirety of the work that is stated to be done within the terms of this contract and outlined further in Exhibit A. The method of payment, protocol in case of breach and timeframe for payment will remain as they are presented in Exhibit A.
The term of the agreement will begin on (START DATE) and end on _ (END DATE) The exception to this will be if the contract is terminated prematurely according to clauses laid out in the exhibitor within the body of this contractual agreement.
VI. ADDITIONAL CLAUSES
(Here, the client may choose to add additional clauses and/or stipulations. Common examples include things like copyright ownership, non-disclosure, confidentiality, etc.)
VII. THE AGREEMENT IN ITS ENTIRETY
The agreement explicitly detailed above hereby represents the entirety of the arrangement between the parties and hereby overrides any previous or existing agreement, contractual or not, that may have been in place prior to the signing of this contract. No additional clauses will be binding unless agreed upon by both parties.
PROFESSIONAL SIGNATURE _ DATE _
CLIENT NAME __
CLIENT SIGNATURE ____ DATE __
A professional services agreement is essentially a form that collects all the relevant information in a professional endeavor between two parties. Its purpose is to aid in preparing a functional contract for said services between the parties.
An exhibit is an additional sheet that is attached to a professional services agreement. It contains all the specifics and particulars that will later be attached to the body of the contract and works as a simple sheet of reference for both parties until a formal contract is signed. It contains details like payment, job description, the timeframe within which the work is to be completed, and other particulars depending on the job itself.