Contract for services

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- Length:10 pages (2900 words)
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About this contract for services
This contract for services could be tailored for any type of work. Most likely, the contractor would be a self-employed individual, either as a sole trader, or through a company, and perhaps subcontracting some of the work. The agreement has been designed, as far as possible, to distinguish the relationship as a business one, and not one of employment.
This contract for services can be edited and reused for each new client that you win. It should be presented to new clients before work starts. If you subsequently perform more work for the same client, this contract automatically covers that work (unless you want to specify otherwise) allowing you to focus on winning and doing the work rather than agreeing contracts.
It is suitable for any service provider, including:
- Professional tradesmen such as builders, plumbers, electricians, plasterers, decorators and gardeners.
- Self employed people undertaking specific pre-defined project work, e.g. commissioned artists, or graphic designers.
But note that we do have a range of contracts tailored for specific construction industry trade as well as a large number of contracts for many other business sectors.
The law relating to contracts for services
A contract for services is a common law term and not defined by legislation.
However, a contract of service is defined in employment and tax legislation, meaning an employment contract.
If you’re self employed, you should make sure that your contract with your client as far as possible, defines your relationship as a business to business one. If Canada Revenue Agency could argue that in reality your agreement was in fact a contract of service then your client would be deemed to be your employer and be compelled to hold back your tax.
It goes further than that for your client. If it could be argued that you are not self employed but rather an employee, then the client would have further costly obligations to you under employment law such as statutory holiday leave. Savvy clients are likely to reject any contract that may make them an employer. On the other hand, a well written contract for services, like this one, is likely to impart professionalism and signal that you take your business seriously as it protects your client as well as you.
A well written contract for services therefore identifies the issues that Canada Revenue Agency or labour relations board might consider and clarifies the terms of the agreement so that it would be difficult to argue that the relationship was not a contract for services. In practice, Canada Revenue Agency will “look through” the contract at the reality of the situation, but setting out the considerations in a contract supports a claim of self employment and ensures that both parties are clear as to how they should act to maintain the relationship as a one of service provision rather than employment.
Document features
“Over-arching” agreement designed for ongoing use to cover a series of assignments.
- Service provider to work from home or at client’s premises
- Provides a complete framework
- Reduces the chances for employer obligations to arise
Contents
- Client warranties
- The Assignments
- Fees and expenses
- Confidentiality
- Use of sub-contractors
- Disclaimers and limitation of liability
- Duration and termination
- Assignment of the contract
- Uncontrollable events (force majeure)
- Successors to the agreement
- Miscellaneous matters

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