Service Agreement & Contractor Contract Review

IP Ownership & Assignment

Clauses assigning background IP — IP owned before the engagement began — to the client are disproportionate. Arbiter flags IP provisions that extend beyond foreground IP created specifically for the project.

Liability Caps & Exclusions

Mutual liability caps offer balanced protection. One-sided caps, or exclusions of consequential loss that only protect the client, create asymmetric risk for the supplier.

Termination for Convenience

Short-notice termination for convenience without adequate payment for work in progress or lost profit can leave contractors significantly out of pocket.

Payment Terms & Late Payment

Payment terms beyond 30 days, absent interest provisions, or subjective acceptance criteria that delay payment should be scrutinised carefully.

Confidentiality Obligations

Broad confidentiality clauses with no sunset period can create ongoing restrictions long after the engagement ends. Arbiter checks scope and duration.

Change Control Mechanism

Absent or weak change control procedures allow scope creep without corresponding fee adjustment — a common source of contractor disputes.

What should I check in a service agreement?

Key clauses to review include IP ownership and assignment provisions, liability caps and exclusions, termination rights (particularly termination for convenience), payment terms and late payment remedies, confidentiality obligations, and dispute resolution mechanisms.

Who owns the IP in a contractor or freelance agreement?

Unlike employment, IP created by a contractor does not automatically vest in the client. The agreement must contain an express assignment or licence. Many service agreements attempt to assign all IP to the client — including background IP the contractor brought to the project. VP Arbiter flags IP clauses that go beyond the scope of the engagement.

What is termination for convenience in a service agreement?

Termination for convenience allows the client to end the contract at any time, often with short notice, without needing a reason. Contractors should check whether termination for convenience entitles them to payment for work done and lost profit, or only work completed before the termination notice.

What liability cap should I expect in a service agreement?

Liability caps typically limit total claims to fees paid in the prior 12 months or a fixed sum. Caps that are very low relative to project value, or that exclude consequential loss without any balancing limitation on the client's claims, should be reviewed carefully.

Can VP Arbiter review my service agreement for free?

Yes. VP Arbiter offers one free analysis per 30 days with no account required. Unlimited service agreement reviews are available from £9/month.