A contract for services is a contract by which a provider of services agrees to provide a service to a client in exchange for a payment.
Here’s an overview of the rights and responsibilities of a client who hires a provider of services.
Important! Other rules apply if the provider of services is considered to be an itinerant (door-to-door) merchant. Other rules also apply to certain types of contracts for services:
Respect the Provider’s Independence
A provider who enters into a contract for services can choose how to perform the service. The client therefore can’t tell her how she should perform the service.
However, the client can tell her what he wants, oversee progress on the work and express his preferences regarding the result.
This independence of the provider of services is the main difference between a contract for services and an employment contract.
For example, in a contract for services where a marketing agency agrees to find sponsors for a company, the company (the client) can require that that the agency hire competent individuals and use certain advertising documents. However, the marketing agency always retains control and direction over the research methods used and the people it hires. It also decides what potential sponsors it wants to meet.
Keep the Provider Informed
A client who enters into a contract for services must give the provider all the information he has about the service to be provided, either before the contract is entered into or while it is being carried out. The client must not give wrong information.
A client who’s an expert in a field related to the requested service must give the provider of services more information than a client who’s not an expert.
Take the example of a client who borrows money from a bank. She’s a seamstress and doesn’t know anything about finance. In this case, she only has to give the bank information she reasonably believes to be useful.
However, the situation would be quite different if this client is an experienced accountant. As someone who knows a lot about finance, she would have an obligation to provide all the specific information she has about her financial situation. It would be hard for her to defend herself by claiming that she didn’t know that certain information was important or that the bank didn’t ask enough questions about her finances.
Pay for the Services
A client who has entered into a contract for services must pay for the service she received. Remember that a client can ask for an estimate of the costs before signing the contract.
Ending the Contract
In some situations, the client can put an end to the contract, just as the provider can end the contract in some situations.
For Poor Service
A client can end a contract for services if the provider of services doesn’t do good work. This could be the case, for example, if she is seriously behind schedule or her work doesn’t meet industry standards.
A client can also be compensated for damage caused by the provider’s fault.
For Another Reason
A client can decide to end a contract for services at any time and for no particular reason, even if the provider of services is doing a good job. However, to do this, the client must follow certain rules:
1. Client must act in good faith:
This means that he can’t end the contract just to needlessly harm the provider of services. A client who ends a contract abusively might have to pay the provider of services damages.
2. Client usually has to pay the provider of services for the following:
- the work performed (e.g., the number of hours already worked)
- the expenses incurred (e.g., equipment rental costs)
- materials used that can’t be removed by the provider of services (e.g.,. metal parts welded to the body of a car being repaired) or that can’t be used for something else (e.g., motorcycle parts that can only be used for a very rare model)
- losses suffered by the provider of services due to the cancellation of the contract
With respect to these losses, the provider of services can’t be compensated for the profit she would have made from the contract if the client had not ended it. But the provider of services can sometimes be compensated if she proves that he had to turn down other contracts to accept the one the client is ending. However, the provider of services must minimize her financial losses, for example by looking for new clients or using materials already bought in another contract, if possible.
Reasons in the Contract
Important! Unless it’s a contract between a consumer and a merchant, the provider of services and the client can agree that neither side can cancel it without the other’s consent.
A contract could also say that the client must have a valid reason to end the contract or that he has to give 30 days’ notice to end it.