Services Agreement

What is a Services Agreement?

A Services Agreement is a contract wherein one party, the service provider, agrees to provide, perform, or render certain services to the other party, the client. The services can be a one-time service such as being a clown for a birthday party or painting a room, or it can be a continuing service such as writing an article for a blog or providing accounting services.

What are the different types of Services Agreement?

This document is a catch-all Services Agreement that may be used for any kind of service. For a Services Agreement with a more specific purpose, the following types can be used:

• Recruitment Agreement. This is used by a person called the client together with another person also known as the recruiter, to engage the latter's services to seek, search, and recruit potential candidates for employment or other engagements.
• Volunteer Agreement. This is a document that can be used by a non-profit organization that wishes to utilize volunteers for their service.
• Performance Agreement. This is a document that is used when one person or business, the client, will hire another person or business, the performer, to perform at a specific venue for a specific event.
• Catering Agreement. This is an agreement entered into where one party, the Caterer, offers food catering services to the other party, the client.
• Tutoring Agreement. This is a document that is used when a person or the "client" wants to hire the services of a tutor. A tutor helps students learn certain academic topics.
• Consulting Agreement. This is used by a consultant for the provision of consulting services rendered in favor of another called the client, where the consultant assists the client by giving advisory opinions or guidance to enable the client to navigate a certain business or industry.
• Social Media Marketing Agreement. This is an agreement between two parties called the "marketer" and the "client", whereby the marketer provides a wide array of marketing services through the client's social media platforms to help the business of the client grow.
• Coaching Agreement. This is an agreement whereby two parties agree on the provision of coaching services.
• Photography Services Agreement. This is a document used by a photographer and their client when the services of the photographer is engaged for some purpose.
• Translation Contract. This is an agreement whereby one party called the translator renders translation services or agrees to translate one language to another language in favor of another party or the client.

What is the difference between a Services Agreement and an Employment Agreement?

A Services Agreement and an employment agreement are both ways to contract the service of a person.

The main difference lies in the fact that for a Services Agreement, the service provider (also called an independent contractor) has discretion with the performance of his work, which means he has the discretion to work using his own methods and generally on his own time. With employment agreements, on the other hand, the employee's performance of work is under the control of the employer, not only in the manner by which it is performed but also in its results. The following guide will explain this in detail: The Difference Between Independent Contractors and Employees.

What is not allowed in a Services Agreement?

It is not allowed in the Services Agreement that the way the services are performed by the service provider is under the control of the client. Thus, if according to the Services Agreement, every aspect of the services is under the control of the client, such that the service provider has no say in doing his work, then the Services Agreement may in reality become an employment contract. In this case, the service provider is an employee of the client and cannot be denied the proper benefits mandated by law such as SSS, Pag-Ibig, and Philhealth, and cannot be paid a wage lower than the prevailing minimum wage. (The prevailing minimum wage is PHP610.00). If the employee is denied of said rights, the client will be liable to pay the proper wages and benefits not paid for the duration of the Services Agreement.

Who can sign a Services Agreement?

The service provider and the client must sign the Services Agreement. If the service provider or the client is an organization, the signatory may be the organization's representative.

The organization's representative must be equipped with a Secretary's Certificate if the service provider or the client is a corporation, a Partners' Certificate if the service provider or the client is a partnership, or a Special Power of Attorney if the service provider or the client is a sole proprietorship or individual before they sign the Services Agreement.

Note that minors or persons below 18 years of age cannot by themselves enter into a Services Agreement. Their parents or legal guardians should sign the agreement for them in their exercise of parental authority over the said minor.

What can be the duration of a Services Agreement?

The service provider or the client is free to choose how long the Services Agreement can last, it may be months or years. It may also last indefinitely so long as the client and the service provider maintain a good working relationship or until the main purpose of the Services Agreement is accomplished.

What has to be done once the Services Agreement is ready?

Once the document is completed, at least two original copies of the document should be printed and all of the attachments described in the document should be attached if there are any. The service provider and the client, or their authorized representatives, should read, and then sign all the copies of the document and each should keep an original copy. After this, the document may be notarized.

Which documents should be attached to the Services Agreement?

The proof of authorization for the representatives can be attached if there are any:

• A Secretary's Certificate if the service provider or the client is a corporation.
• A Partners' Certificate if the service provider or the client is a partnership.
• A Special Power of Attorney if the service provider or the client is a sole proprietorship or individual.

Is it necessary to notarize a Services Agreement for it to be valid?

No, however, notarization will make the existence of the Service Agreement easier to prove in case a dispute concerning the same is brought to court. Further, notarization makes the Service Agreement a public document, which forces other persons who are not parties to the Service Agreement to respect the terms and conditions in the Service Agreement.

What are the costs involved in the finalization of Services Agreement?

Notarization fees for a Services Agreement are typically PHP100 to PHP500.

However, some notaries public may charge based on the percentage of the amount of service fees involved, which is usually at 1%. Thus, if the service fees are P500,000.00 the notarial fee could be P5,000.00.

What must a Services Agreement contain?

The following information should be provided to complete the document:

• Information concerning the identity of the service provider and the client,
• The services that will be rendered by the service provider,
• The duration of the services agreement,
• The time required for the performance of the services,
• The location where the services will be performed, and
• The service fees and manner of payment.

Which laws are applicable to Services Agreement?

The laws on Contracts and Obligations found in the Civil Code of the Philippines apply to this document. The Labor Code of the Philippines as well as orders, rules, and regulations from the Department of Labor and Employment may also apply to guide the user as to what can and cannot be contracted to service providers.

How to modify the template?

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.