Service Contract (Self-Employed Persons)

What to include in a service contract for a successful business partnership.

Who Is Considered a Self-employed Person

Self-employed Persons (SEP) are individuals who operate their own trade or business. They include freelancers such as graphic designers, sport coaches and tourist guides.

Why a Fair Service Contract Matters

It is important to draw up a contract that clearly states the terms of engagement to avoid disputes during or after the course of engagement. A fair contract with SEPs also builds trust and fosters a long and healthy working relationship. This is true for both service buyers and third parties acting on behalf of a client.

What You Should Do to Be Progressive

Here are some progressive employment practices you can consider. These are based on the Tripartite Standard on Contracting with Self-Employed Persons, which you can adopt to distinguish your organisation.

Discuss and Document Key Contract Terms

Before any product or service is delivered, you should discuss and agree on the following terms:

  • Names of contracting parties.
  • Each party's obligations, such as nature of services to be provided (e.g., outcome; output; duration; location)
  • Payment
    • Payment due for each product or service (or part thereof).
    • Due date of payments (e.g., a fixed number of days after the SEP issues an invoice for delivered services or milestones, or periodic payments for services rendered during that period).
  • If applicable, how either party can vary the key terms or terminate the agreement (e.g., by mutual agreement)
  • If applicable, how each party can resolve and mediate disputes, without it being a barrier to either party bringing any dispute directly to the Small Claims Tribunals.

The document of agreed terms, or the contract, should be sent to the SEP in hard or soft copy for agreement in writing.

Sign Off on the Contract and Keep a Copy

Both you and the SEP should sign off on the written key terms and keep a copy of the document in case a dispute arises.

If you or the SEP need to change the terms of the contract in the middle of the project, the new terms should be agreed upon and documented too.

We encourage you to go beyond the practices presented here. You can browse our resource collection to get tips, tools and ideas and learn from case studies and interviews with progressive employers.