Service Agreement Checklist: 10 Clauses That Protect Your Business

1. Scope of Work

Vague scope = endless revisions. Define deliverables with measurable acceptance criteria. Example: "Mobile app that passes TestFlight review and achieves <1% crash rate in 30-day acceptance period."

2. Payment Milestones

Never: "50% upfront, 50% on completion." Always tie payments to deliverables: "30% on kickoff, 30% on beta delivery, 30% on final acceptance, 10% on 30-day warranty expiry."

3. Change Orders

Out-of-scope requests must be in writing with cost and timeline impact. Without this clause, clients can expand scope and demand the original price.

4. Acceptance Period

Client must accept or reject within 7-14 business days. If no response, deemed accepted. Prevents indefinite review cycles.

5. Limitation of Liability

Cap total liability at fees paid, not some arbitrary number. Exclude indirect/consequential damages. Without this, a $10K project could expose you to $1M in claimed losses.

6. Termination for Convenience

Either party can terminate with 30 days notice. Client pays for all work completed plus a kill fee (25-50% of remaining value). Covers your sunk costs.

7. IP Ownership

Client owns deliverables upon full payment. You retain pre-existing tools, libraries, and methods. Grant client a perpetual, royalty-free license to deliverables. Do not assign your pre-existing IP.

8. Confidentiality

Define what information is covered (mark as "Confidential" in writing). Carve out publicly available info, independently developed knowledge, and required legal disclosures.

9. Warranties

Warrant that you will perform professionally. Do NOT warrant "error-free performance" or "fitness for a particular purpose" — those are strict liability standards.

10. Dispute Resolution

Mediation first, then arbitration. Specify venue (your home state). Include attorney fees for the prevailing party. This deters frivolous claims.

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