What are Personal Service Contracts?

Kathy Heydasch

Whenever one party consents to perform a service for another, it is wise to have agreements in place called personal service contracts. This is so that neither party winds up with expectations that are not met. To protect both parties from liability, personal service contracts are drawn up that lay out the expectations of both parties. Personal service contracts can cover everything from lodging to money during the life of the contract, and it is important to be as specific and detailed as possible.

When signed, personal service contracts ensure expectations are met for the parties involved in the contract.
When signed, personal service contracts ensure expectations are met for the parties involved in the contract.

The service to be performed is arguably the most important part of personal service contracts. A strength trainer, for example, has practiced to be able to use his or her skills to train another person. Not just anyone can be a strength trainer; therefore, somebody is probably willing to pay a skilled person to help with this aspect of workouts. A person must have some skill or area of expertise in order to make a living performing services for others.

Time is one of the foremost elements of personal service contracts. A famous singer might sign a contract for a million dollars for a private one-hour concert, or a writer might sign a contract for the same amount for the duration of months or even years to write a biography. These are both examples of personal service contracts with vastly different time-of-completion expectations.

If one earns a living performing services for other people, then compensation is a highly important aspect of personal service contracts. Payment for the completion of a service usually takes the form of money, although trade can be a form of compensation as well. If the execution of the contract involves travel or other miscellaneous expenses, it is important that those items be as detailed as possible to ensure that each party knows what the other party will and will not pay for. For example, lodging and meals while performing the service will be the obligation of one or the other party and should be spelled out inside the framework of the contract.

The consequences of unfulfilled personal service contracts should also be outlined within the pages of the contract as well. For example, there may be a penalty assessed for each minute, hour, day or month that a personal service is unperformed. This might be a flat monetary penalty, a percentage of the value of the contract, or even cancellation of the entire contract. The agreement may even go so far as to stipulate who is responsible for attorney fees if any provisions of the contract are contested in court.

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