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Service Agreement

An agreement for a freelancer, consultant or agency to do work for a client: the scope, the fee and how it is billed, the timeline, and who owns what is produced. The assignment clause is the load-bearing one — a contractor is not an employee, so they remain the first owner of what they create, and copyright reaches the client only through a written assignment naming the rights, the term and the territory (s. 19, Copyright Act 1957).

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What this document contains

11 clauses every service agreement carries, plus 11 you can add.

  1. 01

    Introduction & Preamble

    Identifies the Service Provider and Client, effective date, and purpose of the engagement.

  2. 02

    Definitions

    Defines key terms: Services, Deliverables, Work Product, Milestones, Confidential Information, Background IP, Foreground IP.

  3. 03

    Scope of Services

    Detailed scope, deliverables, milestones, acceptance criteria, change request process, and exclusions.

  4. 04

    Payment Terms

    Compensation structure (fixed/hourly/milestone/retainer), invoicing, GST, TDS, late payment, and reimbursable expenses.

  5. 05

    Term and Termination

    Duration, auto-renewal, termination for convenience/breach/insolvency/non-payment, and survival.

  6. 06

    Intellectual Property

    IP ownership and assignment, Background IP licensing, moral rights waiver, source code delivery, and portfolio license-back.

  7. 07

    Confidentiality

    Mutual or one-way confidentiality obligations, standard of care, exclusions, and survival.

  8. 08

    Representations and Warranties

    Service Provider warranties (professional standard, no infringement, compliance) and Client warranties (authority, cooperation, accurate brief).

  9. 09

    Independent Contractor

    Clarifies that the Service Provider is an independent contractor, not an employee. Covers autonomy, no employee benefits, tax self-assessment, no authority to bind, misclassification indemnity, and own equipment.

  10. 10

    Governing Law and Dispute Resolution

    Applicable law, jurisdiction, and dispute resolution mechanism (courts or arbitration under Indian law).

  11. 11

    General Provisions

    Boilerplate: entire agreement, severability, waiver, amendment, notices, assignment, survival, compliance with laws, interpretation.

Optional clauses

  • Subcontracting

    Whether the Service Provider may subcontract, consent requirements, and subcontractor obligations.

    Worth adding when: Service Provider may use subcontractors or freelancers

  • Termination Consequences

    Payment for completed work, delivery of partial work product, transition assistance, refund of prepaid fees, and kill fee.

    Worth adding when: Early termination is possible — protect against kill fees and incomplete deliverables

  • Non-Solicitation

    Restrictions on soliciting employees, clients, or vendors of the other party.

    Worth adding when: Prevent poaching of employees, clients, or vendors

  • Non-Compete

    Restrictions on competing activities. Includes Section 27 enforceability disclaimer for Indian law.

    Worth adding when: Restrict competing activities (during-term only recommended for Indian law §27)

  • Data Protection and Privacy

    Compliance with DPDP Act 2023, IT Act 2000, data breach notification, and cross-border transfer restrictions.

    Worth adding when: Personal data involved (DPDP Act 2023)

  • Indemnification

    Obligations to indemnify against losses from breach, negligence, IP infringement, or third-party claims.

    Worth adding when: Breach, negligence, or IP infringement damages

  • Limitation of Liability

    Caps on liability, exclusion of indirect damages, and carve-outs for fraud, IP infringement, and wilful misconduct.

    Worth adding when: Cap total liability or exclude indirect damages

  • Force Majeure

    Relief from obligations due to events beyond reasonable control — acts of God, pandemics, government action.

    Worth adding when: Long-term engagements or disaster/pandemic protection

  • Insurance

    Professional indemnity, public liability, and cyber insurance requirements.

    Worth adding when: Require professional indemnity, cyber, or public liability insurance

  • Anti-Corruption and Anti-Bribery

    Compliance with Prevention of Corruption Act, 1988 and anti-bribery obligations.

    Worth adding when: Regulated industries or government dealings

  • Custom Clause

    A free-form clause for bespoke provisions not covered by standard clauses. Use clauseId 'custom-clause-1', 'custom-clause-2', etc. to add multiple. The LLM provides clauseTitle and clauseBody. Use the sequence parameter to control placement.

What the law requires

IP vests in author by default
Unlike employment, in freelance/contractor work the author retains copyright unless explicitly assigned. Always include an IP assignment clause covering all work product.
Section 17, Indian Copyright Act 1957
Contractor vs employee risk
If the engagement looks like employment (fixed hours, single client, employer control over manner of work), it may be reclassified as employment. Ensure the FSA maintains genuine independent contractor characteristics.
Industrial Relations Code 2020
Anti-corruption for govt-facing services
Services involving government-facing work must include anti-corruption representations and compliance obligations.
Prevention of Corruption Act 1988
TDS compliance is mandatory
Payer must deduct TDS at source — 1%/2% under 194C for contractors, 10% under 194J for professional services. Higher rate under 206AB if payee has not filed returns. Include TDS handling in the payment clause.
Sections 194C, 194J, 206AB, Income Tax Act 1961