Service engagement letter template — with late-fee clause that actually holds up

Variables to fill in

{{provider_name}}

Your business name as it appears on your bank account and tax filings.

{{provider_state}}

State of your business (governs the agreement). Use the full name, not abbreviation.

{{client_name}}

Client's full legal name. For businesses, the registered entity name (not the trade name).

{{scope}}

Description of the work, deliverables, and any exclusions. Be specific — vague scope is what makes invoices disputable later.

{{fee_amount}}

Total fee or hourly rate. If hourly, also state any cap.

{{payment_terms}}

Common values: 'Net 15', 'Net 30', '50% deposit, 50% on completion'.

{{late_fee_rate}}

1 to 1.5 percent monthly is typical and enforceable in most states. Above 24% annual triggers usury concerns.

{{governing_state}}

Usually same as {{provider_state}}, but can differ if both parties agree.

The template

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

SERVICE ENGAGEMENT LETTER

Date: [DATE]

Between:
{{provider_name}}, a {{provider_state}} entity ("Provider")
and
{{client_name}} ("Client")

1. SCOPE OF SERVICES
Provider will perform the following services for Client:
{{scope}}

Any work outside this scope requires a written change order signed by both parties before the additional work begins.

2. FEES AND PAYMENT TERMS
Client agrees to pay Provider {{fee_amount}} for the services described above.

Payment terms: {{payment_terms}}.

Invoices are sent on completion of milestones (or upon completion of services for fixed-fee engagements). Payment is due in full by the date stated on the invoice.

3. LATE PAYMENT
Invoices that remain unpaid after the due date accrue interest at {{late_fee_rate}} per month from the day after the due date until paid in full. Client agrees that this rate is reasonable, agreed-upon between the parties, and bears reasonable relation to Provider's actual costs of carrying unpaid balances.

4. RECOVERY COSTS
If any invoice remains unpaid more than thirty (30) days past due, Client agrees to pay Provider's reasonable costs of collection, including but not limited to court filing fees, process server fees, and reasonable attorney's fees, to the extent permitted by the law of {{governing_state}}.

5. DISPUTE RESOLUTION
Either party may raise a good-faith dispute about an invoice within ten (10) business days of receipt by sending written notice to the other party. The parties agree to discuss any dispute in good faith before pursuing legal remedies.

6. TERMINATION
Either party may terminate this engagement on fifteen (15) days written notice. Termination does not relieve Client of the obligation to pay for services rendered through the termination date.

7. GOVERNING LAW
This engagement is governed by the law of {{governing_state}}, without regard to conflict-of-law principles. Any dispute that cannot be resolved by good-faith discussion will be brought in the state or federal courts located in {{governing_state}}.

8. ENTIRE AGREEMENT
This document constitutes the entire agreement between the parties regarding the subject matter and supersedes any prior discussions or representations.

ACKNOWLEDGED AND AGREED:

Provider: __________________________  Date: __________
Print: ____________________________
Title: ___________________________

Client: ____________________________  Date: __________
Print: ____________________________
Title: ___________________________

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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.

Late-fee clause in writing? Connect QuickBooks and Syntharra makes the call when invoices go past due.

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