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.
The person providing the services has several responsibilities under this kind of contract:
- work carefully
- act in the client’s best interests
- make sure the work is performed on time and in keeping with the contract
- follow the rules, standards and guidelines in her field, commonly called the “rules of art” or “good practices”.
Control and Supervision of the Work
The provider of services can choose how to perform the service. The client cannot tell her how she should provide 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 can require 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.
Keeping the Client Informed
Before the Contract Is Entered Into
Before the contract is entered into, the provider of services must, as far as possible, provide the client with all useful information about the service to be provided, including the materials and time required. This way, the client has an idea of the cost and can decide whether or not to commit by signing a contract.
For example, an accountant must give his client a fairly precise estimate of his fees. He must also inform the client that there is a chance his fees could change and that other professionals will work on the file, which could increase the total cost of the service.
During Performance of the Contract
If the provider of services is paid based on the value of the services provided (for example, if she’s paid by the hour), she must, on request, inform the client as much as possible of the progress of the work and the expenses incurred so far. This way, the client can evaluate how much the services will cost before getting a final bill and can settle any concerns with the provider.
The provider of services must also inform the client when she realizes that the service will cost more than what was discussed, that the nature of the service has changed or that it will take longer than expected. This lets the client decide what he wants to do in light of this new information.
A provider of services who has given a cost estimate cannot just bill a higher amount at the end of the contract than what was given in the estimate.
Supply the Tools and Materials
In a contract for services, the provider of services usually provides the tools, materials and other items required to perform the contract. However, she can agree with the client that the client will provide them.
When the provider of services supplies the tools, materials and other items, she must guarantee that they are of good quality and appropriate for the work.
When the client provides the tools, materials and other items, the contractor must use them with care. She must inform the client how she has used them. She must also notify the client if the materials provided are not suitable or have an apparent or hidden defect which a reasonable provider of services should notice.
Sub-Contracting
A provider can carry out a contract for services by asking another person (the “sub-contractor”) to provide all or part the service for her.
However, a provider of services cannot sub-contract if she has been hired because of her expertise or personal qualities, or if the very nature of the contract makes sub-contracting impossible.
For example, an urban planner asked to speak on behalf of a municipality in making an application to the government can ask various people to help him prepare the documents. The contract with the client will be complied with even if the urban planner did not do the work himself.
However, the situation is quite different if a lawyer was specifically hired to represent a client due to her experience, skills and reputation. In this situation, she cannot ask another person to act for her client during a court trial without first getting the client’s permission.
To avoid problems, the client can always specify directly in the contract that the provider of services cannot sub-contract the work.
Finally, even when a contract is sub-contracted out, the provider of services remains responsible toward the client. This means that, if the sub-contractor does not perform the work or performs it poorly, the provider of services cannot merely blame the sub-contractor: she must do whatever is possible to correct the situation.
Achieve the Results Provided for in the Contract
The provider of services must obviously respect the contract with the client. But does she have to achieve a particular result when provided the requested service? It all depends on the nature of the service.
In certain situations, the provider of services has an obligation to provide a specific result. In these cases, the law refers to an “obligation of result”.
For example, a lawyer must file a lawsuit before the legal deadline for suing someone runs out, and a computer technician must install software properly.
In this type of situation, the provider of services is always responsible toward the client if she does not provide the expected result, unless unexpected factors clearly beyond her control prevented her from doing so. These factors are sometimes called an “act of God”.
In other situations, the provider of services is required to use all reasonable means to provide the service but is not obliged to achieve a specific result. In these cases, the law refers to an “obligation of means”.
For example, a lawyer who represents a client in a case must take all reasonable means to win the case, but she doesn’t have to guarantee that she’ll win.
Similarly, a surgeon who conducts a tricky operation on a patient must take all reasonable means available to him for the operation to be a success, but he’s not automatically to blame if the operation is a failure.
In these kinds of situations, the provider of services will only be responsible if she did not take all reasonable means to achieve the result indicated in the contract.
A provider of services might have two types of obligations to respect for the same contract, depending on the circumstances.
Stopping the Work and Ending the Contract
The provider of services can end the contract in some situations, just as the client can end it in certain situations.
The provider of services can end a contract for services by stopping to provide the service. She can do this without the client’s consent, even if the service is not finished.
However, a supplier who wants to do this must respect some rules:
1. She must have a serious reason.
Here are examples of serious reasons allowing a provider of services to end the contract:
- The client interfered with the performance of the work several times.
- The client refused to cooperate with the provider of services.
- The client wanted to change the terms of the contract without the provider’s agreement.
- The client was abusive, disagreeable and impolite on several occasions.
Here are examples of when the provider of services cannot end the contract:
- She did not charge a high enough price in the contract, except it the price was set based on wrong information given by the client.
- The client is very demanding regarding performance of the service.
- The client has not paid certain small costs.
Every situation is unique and a reason which is considered serious in one situation might not be serious in another situation.
2. She must not end the contract at a time that causes the client damage.
The supplier of the service must do whatever is necessary to ensure that the client does not suffer any immediate damage due to the stopping of the service.
For example, a lawyer who stops representing her client the day before an important court case is ending the contract at a time that could harm the client. In this case, the lawyer must ensure that her client’s rights are protected, such as by having the case postponed.
If the service provider received a payment in advance from the client, she must repay the client any extra amount she received based on the services she had time to provide.