Service Payment Agreement Template

Service Payment Agreement Template

This Service Payment Agreement (“Agreement”) is made as of [Date] (“Effective Date”) by and between:

Service Provider
[Provider Legal Name]
[Entity Type, e.g., “Limited Liability Company” or “Individual Contractor”]
[Registered Address or Principal Place of Business]
[City, State/Province, ZIP/Postal Code, Country]
Email: [Provider Email]
Phone: [Provider Phone Number]

Client
[Client Legal Name]
[Entity Type or “Individual”]
[Address]
[City, State/Province, ZIP/Postal Code, Country]
Email: [Client Email]
Phone: [Client Phone Number]

Service Provider and Client are each referred to as a “Party” and together as the “Parties.”

1. Purpose and Relationship to Other Documents

1.1 Purpose.
The purpose of this Agreement is to define the payment terms, fees, and invoicing rules for services that Service Provider performs for Client.

1.2 Service Description.
The services covered by this Agreement (“Services”) are described in:

• [Short description of Services, e.g., “marketing consulting,” “IT support,” “design services”]; and/or

• [Name of Statement of Work, Proposal, or Master Services Agreement] dated [Date], which is incorporated by reference.

2. Fees and Payment Structure

2.1 Fee Model.
The Parties agree that Client shall pay Service Provider according to the following structure (select and complete as applicable):

• Hourly / Daily Rate:

  • Rate: [Currency and Amount] per [hour/day]

  • Estimated hours/days (non-binding): [Number]

• Fixed Project Fee:

  • Total fixed fee: [Currency and Amount]

  • Payment timing: [e.g., “50% on signing, 50% on completion”]

• Retainer / Monthly Fee:

  • Recurring fee: [Currency and Amount] per [month/period]

  • Included hours/services: [Description]

• Milestone-Based Payments:

  • Milestone 1: [Description] – Fee: [Amount] – Due when: [Trigger event]

  • Milestone 2: [Description] – Fee: [Amount] – Due when: [Trigger event]

2.2 Additional Services.
Services outside the agreed scope will be billed at [Currency and Amount] per [hour/day/other] or according to a separately agreed fee, subject to Client’s prior approval in writing (including email).

3. Invoicing and Payment Terms

3.1 Invoicing Frequency.
Service Provider shall issue invoices to Client as follows:

• [Monthly / Biweekly / Upon completion of milestones / On project completion / Other].

3.2 Invoice Details.
Each invoice will include:

• Invoice date and number;

• Description of Services performed and/or milestones reached;

• Period covered by the invoice;

• Fees, taxes, and approved expenses;

• Total amount due and payment instructions.

3.3 Payment Due Date.
Unless otherwise stated on the invoice, Client shall pay all undisputed amounts within [Number] days from the invoice date (“Due Date”).

4. Payment Method and Currency

4.1 Currency.
All amounts under this Agreement shall be paid in [Currency].

4.2 Payment Method.
Client shall make payments by [bank transfer / credit card / PayPal / check / other] to the account or payment details designated below or as later updated in writing by Service Provider:

• Account Name: [Account Name]

• Bank Name: [Bank Name]

• Bank Address: [Bank Address]

• Account Number / IBAN: [Account Number / IBAN]

• SWIFT / BIC (if applicable): [SWIFT/BIC]

• Payment Reference: [Invoice Number / Client Name]

5. Late Payments and Disputed Invoices

5.1 Late Payment.
If Client fails to pay any undisputed amount by the Due Date, Service Provider may:

• Charge a late fee of [Amount or Percentage] on the overdue amount; and/or

• Charge interest at [Interest Rate]% per year (or the maximum permitted by law), calculated from the day after the Due Date until payment is received.

5.2 Suspension of Services.
If any invoice remains unpaid more than [Number] days after the Due Date, Service Provider may suspend or delay Services until all overdue amounts are paid, after giving Client prior notice where reasonable.

5.3 Disputed Amounts.
If Client disputes any portion of an invoice in good faith, Client shall:

• Notify Service Provider in writing within [Number] days of the invoice date;

• Specify the disputed amount and reasons; and

• Pay all undisputed portions of the invoice by the Due Date.

The Parties shall work together in good faith to resolve any billing dispute. Any agreed adjustment shall be reflected in a credit note or amended invoice.

6. Taxes and Expenses

6.1 Taxes.
Unless expressly stated otherwise, all fees are [exclusive / inclusive] of applicable taxes. Client is responsible for any sales, value-added, or similar taxes arising from this Agreement, except taxes based on Service Provider’s income.

6.2 Withholding.
If Client is required by law to withhold tax from payments to Service Provider, Client shall:

• Withhold only the minimum amount required; and

• Provide Service Provider with official documentation of the withheld tax, where available.

6.3 Reimbursable Expenses.
If agreed, Client shall reimburse Service Provider for reasonable, pre-approved out-of-pocket expenses directly related to the Services, such as travel or materials. Service Provider shall provide receipts or appropriate proof of such expenses with the invoice.

7. Changes in Scope or Fees

7.1 Change Requests.
If either Party requests changes to the Services that affect time, cost, or resources, the Parties shall discuss and agree in writing on any revised fees, milestones, or timelines before the changes take effect.

7.2 Rate Adjustments (for ongoing engagements).
For ongoing engagements longer than [Number] months, Service Provider may adjust its standard rates upon [Number] days’ prior written notice. If Client does not agree to the updated rates, Client may terminate this Agreement in accordance with Section 9.

8. Term, Termination, and Final Payments

8.1 Term.
This Agreement starts on the Effective Date and continues until:

• Completion of the Services and payment of all amounts due; or

• Termination by either Party in accordance with this Section 8.

8.2 Termination for Convenience.
Either Party may terminate this Agreement for any reason by giving [Number] days’ prior written notice to the other Party.

8.3 Termination for Cause.
Either Party may terminate this Agreement immediately by written notice if the other Party materially breaches this Agreement and fails to cure the breach within [Number] days after receiving written notice describing the breach.

8.4 Effect of Termination.
Upon termination:

• Service Provider shall invoice Client for all Services performed and approved expenses incurred up to the effective termination date;

• Client shall pay all undisputed amounts in accordance with the payment terms in this Agreement; and

• Any prepaid but unearned fees or agreed refunds shall be handled as follows: [e.g., “non-refundable” / “prorated refund”].

9. Basic Legal Terms (Payment-Focused Summary)

9.1 Confidentiality (Short Form).
Each Party agrees to keep confidential any non-public information received from the other Party in connection with the Services, and to use it only as needed to perform this Agreement.

9.2 Limitation of Liability (Payment Context).
To the extent allowed by law, Service Provider’s total liability for claims directly arising out of this Agreement shall not exceed the total fees actually paid by Client to Service Provider under this Agreement during the [Number]-month period before the event giving rise to the claim. Neither Party is liable for indirect or consequential damages related solely to payment terms, except where prohibited by law.

9.3 Governing Law and Disputes.
This Agreement shall be governed by the laws of [State/Province, Country], without regard to conflict-of-law rules. If a dispute arises relating mainly to payment or invoices, the Parties shall first attempt to resolve it in good faith through informal discussions. If unresolved after [Number] days, either Party may pursue [court proceedings / mediation / arbitration] in [City, State/Province, Country].

10. Miscellaneous

10.1 Entire Agreement (Payment Terms).
This Agreement sets out the Parties’ complete understanding regarding payment terms for the Services and, if applicable, operates together with any broader service agreement or statement of work referenced in Section 1.2.

10.2 Amendments.
Any amendment to this Agreement must be in writing and signed (including electronically) by both Parties.

10.3 No Waiver.
If either Party does not enforce a right under this Agreement, that does not mean the right is waived for future situations.

10.4 Assignment.
Client may not assign its rights or obligations under this Agreement without Service Provider’s prior written consent, except to a successor in interest of Client’s business. Service Provider may assign its rights to receive payments to a third party (e.g., factoring company) upon written notice to Client, to the extent permitted by law.

10.5 Notices.
Formal notices under this Agreement shall be sent to the contact details set out at the beginning of this Agreement (or any updated contact details provided in writing) by email, courier, or registered mail.

11. Signatures

IN WITNESS WHEREOF, the Parties have executed this Service Payment Agreement as of the Effective Date written above.

Service Provider

Signature: _______________________________
Name: [Authorized Signatory Name]
Title: [Title]
Date: [Date]

Client

Signature: _______________________________
Name: [Authorized Signatory Name]
Title: [Title, if applicable]
Date: [Date]