Template · Contract

Engagement letter with deposit requirement — free template

An engagement letter with a deposit clause establishes the scope of work, pricing, payment schedule, and a required upfront deposit before work begins. The deposit clause is the most effective single protection against nonpayment for project-based service businesses. This template is a starting point — have an attorney review before using for high-value engagements.

Use it for

  • Any project-based service business taking on a new client or large project.
  • Design, development, consulting, construction, photography, and similar services where work is delivered over time.
  • Situations where the full project scope and price can be defined before work starts.

Do not use for

  • Ongoing retainer relationships where billing is monthly — use a retainer agreement instead.
  • Emergency work where there is no time for a signed engagement — follow up with written confirmation immediately after.

Variables to fill in

YOUR_BUSINESS_NAME
Your legal business name
YOUR_NAME
Your name and title
YOUR_ADDRESS
Your business address
YOUR_EMAIL
Your contact email
YOUR_PHONE
Your contact phone
CLIENT_NAME
Client's legal name or business name
CLIENT_ADDRESS
Client's address
PROJECT_DESCRIPTION
Plain-language description of the work being performed
TOTAL_PROJECT_FEE
Total project price
DEPOSIT_AMOUNT
Deposit amount required before work begins (typically 25%–50%)
DEPOSIT_DUE_DATE
Date by which deposit must be received
MILESTONE_SCHEDULE
Description of any milestone payments (e.g., 25% at midpoint)
FINAL_PAYMENT_TRIGGER
When final payment is due (e.g., on delivery, before file transfer)
LATE_FEE_RATE
Late fee percentage per month (e.g., 1.5%)
GOVERNING_STATE
[STATE-SPECIFIC] State whose law governs this agreement
DATE
Date the engagement letter is signed

The template

Select all and copy. Replace the {{double-brace}} placeholders with your details.

ENGAGEMENT LETTER
{{YOUR_BUSINESS_NAME}}
Date: {{DATE}}

────────────────────────────────────────────────
PARTIES
────────────────────────────────────────────────

Service Provider:
{{YOUR_BUSINESS_NAME}}
{{YOUR_ADDRESS}}
{{YOUR_EMAIL}} | {{YOUR_PHONE}}

Client:
{{CLIENT_NAME}}
{{CLIENT_ADDRESS}}

────────────────────────────────────────────────
SCOPE OF WORK
────────────────────────────────────────────────

{{YOUR_BUSINESS_NAME}} agrees to perform the following services for {{CLIENT_NAME}}:

{{PROJECT_DESCRIPTION}}

Any services not described above are outside the scope of this engagement. Changes to scope require a written change order signed by both parties before additional work begins.

────────────────────────────────────────────────
FEES AND PAYMENT SCHEDULE
────────────────────────────────────────────────

Total Project Fee: ${{TOTAL_PROJECT_FEE}}

Payment Schedule:

1. Deposit (due before work begins): ${{DEPOSIT_AMOUNT}} — due by {{DEPOSIT_DUE_DATE}}
   Work will not commence until the deposit is received.

2. Progress Payments: {{MILESTONE_SCHEDULE}}

3. Final Payment: Remaining balance is due {{FINAL_PAYMENT_TRIGGER}}.

All payments are due within 10 days of the applicable invoice or milestone date unless otherwise specified above.

Late Payments: Invoices not paid within 10 days of the due date will be subject to a late fee of {{LATE_FEE_RATE}}% per month on the outstanding balance.

────────────────────────────────────────────────
DELIVERY AND OWNERSHIP
────────────────────────────────────────────────

Deliverables will be provided upon receipt of all payments owed under this agreement. {{YOUR_BUSINESS_NAME}} retains all rights to work product until payment in full is received.

────────────────────────────────────────────────
GOVERNING LAW
────────────────────────────────────────────────

[STATE-SPECIFIC] This agreement is governed by the laws of the State of {{GOVERNING_STATE}}.

────────────────────────────────────────────────
SIGNATURES
────────────────────────────────────────────────

By signing below, both parties agree to the terms of this engagement letter.

Service Provider:
Signature: ________________________________  Date: ____________
Name: {{YOUR_NAME}}
Title: _____________________________

Client:
Signature: ________________________________  Date: ____________
Name: _____________________________
Title: _____________________________

---

This template is general-purpose educational content, not legal advice. State law varies and attorney review is recommended before use. Syntharra is not your attorney.

A signed engagement letter prevents most disputes. Syntharra handles follow-up automatically when invoices age — so you never have to chase manually.

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