Business template
Professional Services Agreement
Use this template to formalise client engagements, set expectations on scope, and handle change requests without damaging the relationship.
Overview
A clear services agreement keeps projects on time and on budget. This template combines a master services agreement with a statement of work, enabling you to reuse the legal terms while swapping in project-specific details.
It covers scope definition, change control, payment schedules, confidentiality, data protection, liability limitations, and dispute resolution. The commentary explains how to calibrate each clause depending on whether you are the service provider or client.
The guide also shares best practices for stakeholder communication, milestone tracking, and documenting acceptance criteria—helping both parties achieve a smooth engagement.
Who should use this template?
Agencies and studios
Agree on deliverables, iterations, and intellectual property ownership before launching creative or marketing campaigns.
Technology vendors
Capture implementation phases, service levels, and data processing obligations for software rollouts or integrations.
Corporate clients
Maintain procurement standards by ensuring indemnities, confidentiality, and compliance requirements are covered in every engagement.
Key clauses to review
Scope and deliverables
Detail exactly what is being delivered, including formats, quantity, and acceptance criteria. Attach statements of work for clarity.
Change management
Provide a structured process for requesting and approving scope changes, including fee adjustments and revised timelines.
Payment terms
Outline invoicing milestones, payment methods, currency, taxes, and late payment interest to keep cash flow predictable.
Liability and indemnities
Limit exposure by capping liability to contract value and clarifying indemnities for third-party claims, IP infringement, or data breaches.
Drafting tips
- Break down large projects into phases with acceptance checkpoints so both sides can evaluate progress before releasing further payments.
- Include service level agreements (SLAs) for response times and maintenance windows if you provide ongoing support.
- Add a dispute escalation ladder so project managers can resolve issues before they reach senior leadership or arbitration.
- Reference data processing agreements if personal data flows between the parties, satisfying PDPA obligations.
Detailed playbook
Drafting a strong scope of work
The scope sets expectations for deliverables and responsibilities. Use precise language: list features, file formats, quantity, and revisions. Attach creative briefs or technical specifications so the contract references detailed annexes. Encourage clients to nominate a single point of contact who will consolidate feedback.
For agile projects, define sprint cadence, backlog grooming responsibilities, and demo schedules. Clarify who owns product backlog decisions to avoid conflict between client stakeholders.
Setting project governance
Establish a governance structure with weekly status meetings, progress reports, and escalation pathways. Include a RACI matrix in the annex to clarify who is responsible, accountable, consulted, and informed. These mechanisms keep everyone aligned and reduce surprises.
If the project involves third-party vendors, ensure the client provides timely access and that subcontractors sign confidentiality agreements mirroring the main contract.
Payment schedules and incentives
Link payment milestones to tangible deliverables—such as design approval, beta launch, or go-live. Require deposits to cover mobilisation costs and set late payment interest to protect cash flow. For long-term retainers, include annual rate reviews and price adjustment formulas tied to CPI.
Incentivise on-time delivery with early completion bonuses or shared savings clauses. Conversely, outline penalties for persistent delays caused by either party, encouraging proactive communication.
Managing intellectual property
Decide whether IP transfers upon full payment or remains with the service provider under a licence. Creative agencies may retain moral rights, while software vendors typically grant licences for specific environments. If open-source components are used, disclose the licences and obligations.
For sensitive projects, add confidentiality and data protection clauses referencing PDPA requirements, especially when handling customer data or proprietary algorithms.
Dispute resolution roadmap
Not all projects run smoothly. The template suggests a three-stage escalation: project manager dialogue, senior management negotiation, and mediation or arbitration as a last resort. Documenting this process encourages collaboration before legal action.
Include governing law and jurisdiction clauses. Malaysian companies often select Kuala Lumpur courts or the Asian International Arbitration Centre. Legalise AI lets you swap venues instantly.
Leveraging Legalise AI for engagements
Use Legalise AI to create statements of work from structured questionnaires. The AI assistant can generate project plans, risk registers, and change orders based on your contract data. Share templates with your delivery team so every proposal, contract, and invoice stays aligned.
Track revisions and approvals with activity timelines. When the project closes, export the signed agreement alongside completion reports for auditing and knowledge management.
Sample clause excerpt
Any Change Request shall describe the proposed amendment to the Services, associated fees, and impact on the Project Timeline. The Parties shall not implement a Change Request until a written Variation Order is executed by authorised representatives of both Parties. Upon completion of each Deliverable, the Client shall review and either accept or provide consolidated feedback within five (5) Business Days. Failure to respond shall be deemed acceptance of the Deliverable.
Frequently asked questions
How do I handle scope creep?
Use the change management clause to formalise new requirements. Document the change, agree on revised fees and timelines, and execute a variation order before work proceeds.
Should I cap my liability?
Yes. Limit liability to the fees paid or payable under the contract, excluding wilful misconduct or gross negligence. This protects your business from disproportionate claims.
Can I reuse this contract for multiple projects?
Absolutely. Treat the master terms as evergreen and attach new statements of work for each engagement. Legalise AI can duplicate the template and swap out project details instantly.
What if the client delays feedback?
Include deemed acceptance language so the project timeline stays on track. You can also add standby fees if delays extend beyond a specified buffer.