- Providing Services. Customer or its Affiliates may enter SOWs with Provider. Provider will perform the Services as detailed in an applicable SOW. Each SOW together with the Key Terms and Standard Terms will constitute a separate agreement. Provider will comply with Customer Policies, if any. If a Customer Affiliate enters an SOW with Provider, references to Customer in the SOW, Key Terms, or Standard Terms will mean that Affiliate for that agreement.
- Cooperation. Customer will reasonably cooperate with Provider to allow the performance of Services. Provider is not responsible for an inability to perform the Services caused by Customer’s failure to cooperate as reasonably requested. Provider will provide its own equipment and tools to perform the Services.
- Change Orders.Provider or Customer may amend any SOW by entering a Change Order. If a party requests a Change Order, the other party will review and consider the proposed changes in good faith and respond to the Change Order request within a reasonable timeframe. However, a Change Order will not be binding until Provider and Customer agree in writing on the Change Order.
- Acceptance. If according to the SOW Deliverables are subject to this section , Customer will be deemed to have approved a Deliverable if Customer does not reject the Deliverable within the Rejection Period. If Customer rejects a Deliverable, Customer must notify Provider in writing with reasonable detail about why the Deliverable did not meet the requirements in the SOW. Provider will correct the issue and resubmit the Deliverable within the Resubmission Period.
- Subcontractors. Provider may use Subcontractors to perform the Services only with Customer’s prior permission. However, Provider may use its Affiliates to perform Services without Customer’s prior permission. If Provider uses Subcontractors to perform Services, Provider is responsible for (a) all acts and omissions of its Subcontractors, (b) ensuring its Subcontractors’ compliance with this Agreement and the applicable SOW, and (c) making all payments owed to its Subcontractors for their portion of the Services.
- Customer Obligations. Customer will comply with Customer Obligations, if any.
- Deliverables. Except for Pre-Existing Materials and Third-Party Materials , Provider assigns all right, title, and interest in the Deliverables (if any) to Customer at the Time of Assignment. Upon the Time of Assignment, Provider will assert no rights over such Deliverables.
- Customer Materials. Provider may copy, display, modify, and use Customer Materials only as needed to provide the Services. Customer is responsible for the accuracy and content of Customer Materials.
- Pre-Existing Materials. To the extent Provider incorporates Pre-Existing Materials into Deliverables, Provider grants Customer a non-exclusive, non-transferrable, perpetual, irrevocable, worldwide license to use Pre-Existing Materials only as necessary to use the Deliverables according to this Agreement.
- Third-Party Materials.
- Provider may incorporate Third-Party Materials into Deliverables only if allowed in the SOW and as authorized by Customer in writing (including by email).
- Provider is responsible for obtaining all rights, licenses, consents, approvals, and authorizations necessary to use and incorporate the Third-Party Materials procured by Provider and incorporated into the Deliverables. This includes securing the ability to grant Customer rights in the Deliverables under this Agreement and ensuring that Customer has all rights necessary in these Provider-procured Third-Party Materials so that Customer may use Deliverables according to this Agreement.
- Customer is responsible for obtaining all rights, licenses, consents, approvals, and authorizations necessary to use and incorporate the Third-Party Materials procured by Customer and incorporated into the Deliverables. This includes securing the ability to grant Provider rights in the Customer-procured Third-Party Materials so Provider can incorporate these Third-Party Materials into Deliverables. Provider will reasonably assist Customer in obtaining the necessary rights, licenses, consents, approvals, and authorizations for the Third-Party Materials that Provider recommends but that Customer procures.
- Personal Data. If the parties have a DPA, each party will comply with its obligations in the DPA, the terms of the DPA will control each party’s rights and obligations as to Personal Data, and the terms of the DPA will control in the event of any conflict with this Agreement.
- Security . Provider will comply with the Security Policy, if any.
- Fees and Invoices. Unless the currency is specified in the SOW, all Fees are in U.S. Dollars and are exclusive of taxes. Except for the prorated refund of prepaid Fees allowed with specific termination rights, Fees are non-refundable. Provider will send invoices for Fees as described in the SOW.
- Payment . Customer will pay Provider the Fees and taxes in each invoice in U.S. Dollars, unless the SOW specifies a different currency, within the Payment Period.
- Taxes. Customer is responsible for all duties, taxes, and levies that apply to Fees, including sales, use, VAT, GST, or withholding, that Provider itemizes and includes in an invoice. However, Customer is not responsible for Provider’s income taxes.
- Payment Dispute. If Customer has a good-faith disagreement about the amounts charged on an invoice, Customer must notify Provider about the dispute during the Payment Period for the invoice and must pay all undisputed amounts on time. The parties will work together to resolve the dispute within 15 days after the end of the Payment Period. If no resolution is agreed, each party may pursue any remedies available under the Agreement, the applicable SOW, or Applicable Laws.
- Term. This Agreement will start on the Effective Date and continue until 12 months have elapsed since the end of the latest SOW Term end date.
- Termination.
- Either party may terminate this Agreement or an SOW immediately if the other party (i) fails to cure a material breach of the Agreement or SOW within 30 days after receiving notice of the breach; (ii) materially breaches the Agreement or SOW in a manner that cannot be cured; (iii) dissolves or stops conducting business without a successor; (iv) makes an assignment for the benefit of creditors; or (v) becomes the debtor in insolvency, receivership, or bankruptcy proceedings that continue for more than 60 days.
- Either party may terminate an affected SOW immediately if a Force Majeure Event prevents Provider from providing the Services for 30 or more consecutive days.
- Either party may terminate this Agreement for any or no reason if there are no active SOWs.
- A party must notify the other of its reason for termination.
- Termination of the Agreement pursuant to Section 5.2(a) or the Key Terms will automatically terminate all SOWs.
- Provider will no longer have to provide the Services.
- Each Recipient will return or destroy Discloser’s Confidential Information in its possession or control.
- Except where Customer terminates pursuant to Section 5.2(a), Provider will submit a final invoice for all outstanding Fees accrued before termination and Customer will pay the invoice according to Section 4 (Payment & Taxes).
- Except where Provider terminates pursuant to Section 5.2(a), Provider will issue a refund for any unearned, prepaid Fees.
- The following sections will survive expiration or termination of the Agreement: Section 2.1 (Deliverables), Section 2.3 (Pre-Existing Materials), Section 2.5 (Feedback and Usage Data), Section 2.6 (Reservation of Rights), Section 4 (Payment & Taxes) for fees accrued or payable before expiration or termination, Section 5.3 (Effect of Termination), Section 5.4 (Survival), Section 6 (Representations & Warranties), Section 7 (Disclaimer of Warranties), Section 8 (Limitation of Liability), Section 9 (Indemnification), Section 10 (Insurance) for the time period specified, Section 11 (Confidentiality), Section 12 (General Terms), Section 13 (Definitions), and the portions of a Cover Page referenced by these sections.
- Each Recipient may retain Discloser’s Confidential Information in accordance with its standard backup or record retention policies maintained in the ordinary course of business or as required by Applicable Laws, in which case Section 3 (Privacy & Security) and Section 11 (Confidentiality) will continue to apply to retained Confidential Information.
- Mutual. Each party represents and warrants to the other that: (a) it has the legal power and authority to enter into this Agreement; (b) it is duly organized, validly existing, and in good standing under the Applicable Laws of the jurisdiction of its origin; (c) it will comply with all Applicable Laws in performing its obligations or exercising its rights in this Agreement; and (d) it will comply with the Additional Warranties.
- From Customer. Customer represents and warrants to Provider that (a) Provider’s use of Customer Materials and Customer-procured Third-Party Materials under this Agreement does not and will not infringe or misappropriate anyone else’s copyright, trademark, trade secret, or right of publicity; and (b) it has all rights necessary to provide Customer Materials and Customer-procured Third-Party Materials under Section 2.
- From Provider. Provider represents and warrants to Customer that: (a) it will perform the Services in a timely, competent, and professional manner; (b) the Deliverables (if any, however excluding Customer Materials and Customer-procured Third-Party Materials) do not and will not infringe or misappropriate anyone else’s copyright, trademark, trade secret, or right of publicity; (c) the Deliverables (if any) will conform to the requirements in the SOW; and (d) it has all rights necessary to perform the Services and convey the Deliverables (if any, however excluding Customer Materials and Customer-procured Third-Party Materials) under Section 2 (Intellectual Property).
- Warranty Remedy. If Provider breaches the warranty in Section 6.3(c), Customer must give Provider notice (with enough detail for Provider to understand or replicate the issue) within 45 days of discovering the issue. Within 45 days of receiving sufficient details of the warranty issue, Provider will reperform the Services. If Provider cannot resolve the issue, Customer may terminate the affected SOW and Provider will pay to Customer a prorated refund of prepaid Fees for the remainder of the SOW Term. Provider’s reperformance obligations and Customer’s termination right are Customer’s only remedies if Provider does not meet the warranty in Section 6.3(c).
- Except for the warranties in Section 6 (Representations & Warranties), Provider and Customer each disclaim all other warranties, whether express or implied, including the implied warranties of merchantability, fitness for a particular purpose, title, and non-infringement. These disclaimers apply to the maximum extent permitted by Applicable Laws.
- Liability Caps. If there are Increased Claims, each party’s total cumulative liability for the Increased Claims arising out of or relating to this Agreement will not be more than the Increased Cap Amount. Each party’s total cumulative liability for all other claims arising out of or relating to this Agreement will not be more than the General Cap Amount.
- Damages Waiver. Each party’s liability for any claim or liability arising out of or relating to this Agreement will be limited to the fullest extent permitted by Applicable Laws. Under no circumstances will either party be liable to the other for lost profits or revenues, or for consequential, special, indirect, exemplary, punitive, or incidental damages relating to this Agreement, even if the party is informed of the possibility of this type of damage in advance.
- Exceptions. The liability caps in Section 8.1 do not apply to any Unlimited Claims . The damages waiver in Section 8.2 does not apply to any Increased Claims or a breach of Section 11 (Confidentiality).
- Protection by Provider. Provider will indemnify, defend, and hold harmless Customer from and against all Provider Covered Claims made by someone other than Customer or its Affiliates , and all out-of-pocket damages, awards, settlements, costs, and expenses, including reasonable attorneys’ fees and other legal expenses, that arise from the Provider Covered Claim.
- Protection by Customer. Customer will indemnify, defend, and hold harmless Provider from and against all Customer Covered Claims made by someone other than Provider or its Affiliates , and all out-of-pocket damages, awards, settlements, costs, and expenses, including reasonable attorneys’ fees and other legal expenses, that arise from the Customer Covered Claim.
- Procedure. The Indemnifying Party’s obligations in this section are contingent upon the Protected Party: (a) promptly notifying the Indemnifying Party of each Covered Claim for which it seeks protection; (b) providing reasonable assistance to the Indemnifying Party at the Indemnifying Party’s expense; and (c) giving the Indemnifying Party sole control over the defense and settlement of each Covered Claim. A Protected Party may participate in a Covered Claim for which it seeks protection with its own attorneys only at its own expense. The Indemnifying Party may not agree to any settlement of a Covered Claim that contains an admission of fault or otherwise materially and adversely impacts the Protected Party without the prior written consent of the Protected Party.
- Exclusive Remedy. This Section 9 (Indemnification) describes each Protected Party’s exclusive remedy and each Indemnifying Party’s entire liability for a Covered Claim.
- During the term of the Agreement and for six months after, each party will carry commercial insurance policies with coverage limits that meet the relevant Insurance Minimums required in the SOW, if any. Upon request, each party will give the other a certificate of insurance evidencing its insurance policies that meet the required Insurance Minimums. A party’s insurance policies will not be considered as evidence of its liability. Insurance coverage will be on a date of occurrence form and waive rights of subrogation or crossclaim.
- Non-Use and Non-Disclosure. Unless otherwise authorized in the Agreement, Recipient will (a) only use Discloser’s Confidential Information to fulfill its obligations or exercise its rights under this Agreement; and (b) not disclose Discloser’s Confidential Information to anyone else. In addition, Recipient will protect Discloser’s Confidential Information using at least the same protections Recipient uses for its own similar information but no less than a reasonable standard of care.
- Exclusions. Confidential Information does not include information that (a) Recipient knew without any obligation of confidentiality before disclosure by Discloser; (b) is or becomes publicly known and generally available through no fault of Recipient; (c) Recipient receives under no obligation of confidentiality from someone else who is authorized to make the disclosure; or (d) Recipient independently developed without use of or reference to Discloser’s Confidential Information.
- Required Disclosures. Recipient may disclose Discloser’s Confidential Information to the extent required by Applicable Laws if, unless prohibited by Applicable Laws, Recipient provides the Discloser reasonable advance notice of the required disclosure and reasonably cooperates, at the Discloser’s expense, with the Discloser’s efforts to obtain confidential treatment for the Confidential Information.
- Permitted Disclosures. Recipient may disclose Discloser’s Confidential Information to employees, advisors, contractors, and representatives who each have a need to know the Confidential Information, but only if the person or entity is bound by confidentiality obligations at least as protective as those in this Section 11 and Recipient remains responsible for everyone’s compliance with the terms of this Section 11.
- Entire Agreement. This Agreement is the only agreement between the parties about its subject and this Agreement supersedes all prior or contemporaneous statements (whether in writing or not) about its subject. Provider expressly rejects any terms included in Customer’s purchase order or similar document, which may only be used for accounting or administrative purposes.
- Modifications, Severability, and Waiver. Any waiver, modification, or change to the Agreement must be in writing and signed or electronically accepted by each party. However, this does not limit Provider’s or Customer’s ability to update an SOW by following the Change Order procedures. If any term of this Agreement is determined to be invalid or unenforceable by a relevant court or governing body, the remaining terms of this Agreement will remain in full force and effect. The failure of a party to enforce a term or to exercise an option or right in this Agreement will not constitute a waiver by that party of the term, option, or right.
- Governing Law and Chosen Courts. The Governing Law will govern all interpretations and disputes about this Agreement, without regard to its conflict of laws provisions. The parties will bring any legal suit, action, or proceeding about this Agreement or an SOW in the Chosen Courts and each party irrevocably submits to the exclusive jurisdiction of the Chosen Courts .
- Injunctive Relief. Despite Section 12.3 (Governing Law and Chosen Courts), a breach of Section 11 (Confidentiality) or the violation of a party’s intellectual property rights may cause irreparable harm for which monetary damages cannot adequately compensate. As a result, upon the actual or threatened breach of Section 11 (Confidentiality) or violation of a party’s intellectual property rights, the non-breaching or non-violating party may seek appropriate equitable relief, including an injunction, in any court of competent jurisdiction without the need to post a bond and without limiting its other rights or remedies.
- Non-Exhaustive Remedies. Except where the Agreement provides for an exclusive remedy, seeking or exercising a remedy does not limit the other rights or remedies available to a party.
- Assignment. Neither party may assign any rights or obligations under this Agreement or any SOW without the prior written consent of the other party. However, Customer may assign this Agreement upon notice if Customer undergoes a merger, change of control, reorganization, or sale of all or substantially all its equity, business, or assets to which this Agreement relates. Any attempted but non-permitted assignment is void. This Agreement will be binding upon and inure to the benefit of the parties and their permitted successors and assigns.
- No Publicity. Neither party may publicly announce the existence of this Agreement or any SOW without the prior written approval of the other party.
- Notices. Any notice, request, or approval about the Agreement must be in writing and sent to the Notice Address. Notices will be deemed given (a) upon confirmed delivery if by email, registered or certified mail, or personal delivery; or (b) two days after mailing if by overnight commercial delivery.
- Independent Contractors. The parties are independent contractors, not agents, partners, or joint venturers. Neither party is authorized to bind the other to any liability or obligation.
- No Third-Party Beneficiary. There are no third-party beneficiaries of this Agreement.
- Force Majeure. Neither party will be liable for a delay or failure to perform its obligations of this Agreement if caused by a Force Majeure Event. However, this section does not excuse Customer’s obligations to pay Fees.
- Export Controls. Customer may not remove or export from the United States or allow the export or re-export of the Service, Deliverables, or any related technology or materials in violation of any restrictions, laws, or regulations of the United States Department of Commerce, the United States Department of Treasury Office of Foreign Assets Control, or any other United States or foreign agency or authority.
- Anti-Bribery. Neither party will take any action that would be a violation of any Applicable Laws that prohibit the offering, giving, promising to offer or give, or receiving, directly or indirectly, money or anything of value to any third party to assist Provider or Customer in retaining or obtaining business. Examples of these kinds of laws include the U.S. Foreign Corrupt Practices Act and the UK Bribery Act 2010.
- Titles and Interpretation. Section titles are for convenience and reference only. All uses of “including” and similar phrases are non-exhaustive and without limitation.
- Signature. This Agreement may be signed in counterparts, including by electronic copies or acceptance mechanism. Each copy will be deemed an original and all copies, when taken together, will be the same agreement.
- “Affiliate” means an entity that, directly or indirectly, controls, is under the control of, or is under common control with a party, where control means having more than fifty percent (50%) of the voting stock or other ownership interest.
- “Agreement” means these Standard Terms, the Key Terms between Provider and Customer, and the policies and documents referenced in or attached to the Key Terms.
- “Applicable Laws” means the laws, rules, regulations, court orders, and other binding requirements of a relevant government authority.
- “Change Order” means a document that identifies the SOW being changed, describes what the parties are changing, and is approved by an authorized representative of each party.
- “Confidential Information” means information in any form disclosed by or on behalf of a Discloser, including before the Effective Date, to a Recipient in connection with this Agreement that (a) the Discloser identifies as “confidential”, “proprietary”, or the like; or (b) should be reasonably understood as confidential or proprietary due to its nature and the circumstances of its disclosure. Confidential Information includes the existence of this Agreement and the information on each Cover Page.
- “ Cover Page” means a document that is signed or electronically accepted by the parties that incorporates these Standard Terms, identifies Provider and Customer, and may include a SOW, Key Terms, or both.
- “Covered Claim” means either a Provider Covered Claim or Customer Covered Claim.
- “Customer Materials” means data, information, or materials owned or provided by or on behalf of Customer for use with the Services, but excludes Feedback and Customer-procured Third-Party Materials.
- “Discloser” means a party to this Agreement when the party is providing or disclosing Confidential Information to the other party.
- “Feedback” means suggestions, feedback, or comments about the Services or related offerings.
- “Force Majeure Event” means an unforeseen event outside a party’s reasonable control where the affected party took reasonable measures to avoid or mitigate the impacts of the event. Examples of these kinds of events include unpredicted natural disaster like a major earthquake, war, pandemic, riot, act of terrorism, or public utility or internet failure.
- “Indemnifying Party” means a party to this Agreement when the party is providing protection for a particular Covered Claim.
- “Key Terms” means a Cover Page that includes the key legal details and definitions for this Agreement that are not defined in the SOW or Standard Terms. The Key Terms may include details about Covered Claims, set the Governing Law, or contain other legal details about this Agreement.
- “Pre-Existing Materials” means any information, tools, materials, or intellectual property that Provider developed or owned before the Effective Date or developed after the Effective Date that are independent from or outside the scope of the Agreement, and any derivatives of these items that are not unique to Customer or that have generally applicable use and do not incorporate or disclose any Customer Confidential Information.
- “Protected Party” means a party to this Agreement when the party is receiving the benefit of protection for a particular Covered Claim.
- “Recipient” means a party to this Agreement when the party receives Confidential Information from the other party.
- “Services” means the services described in a SOW, including the creation of Deliverables (if any).
- “SOW” means a Cover Page that includes the key business details and definitions for this Agreement that are not defined in the Key Terms or Standard Terms. A SOW may include details about the Deliverables, Fees, or other details about the Services.
- “Subcontractors” means other people or companies engaged by Provider to perform some of the Services, including Provider’s Affiliates.
- “Third-Party Materials” means any information, tools, materials, or intellectual property owned by anyone other than Provider, its Affiliates, or Customer.
- “Usage Data” means data and information about the provision, use, and performance of the Services based on Customer’s use of the Services.
Common Paper Professional Services Agreement (Version 1.1) free to use under CC BY 4.0 .
The PSA, annotated
SOW
The SOW, or Statement of Work, contains the business details that you can customize from deal to deal.
The SOW is contained in a Cover Page. Learn about how standard agreements work in our anatomy of a contract blog post.
[ XX ]
Square brackets with text indicate a field you can fill in or customize before sending the agreement.
For this one, input the SOW number for a particular client. Many professional services relationships have multiple engagements that are governed by separate SOWs. They are generally numbered sequentially for each individual client.
The Agreement with the Key Terms below
If the Key Terms are not included in this same document, you can replace this first sentence with “This SOW incorporates the Agreement with a Key Terms Effective Date of [ enter Effective Date of Key Terms ] between [ enter name of Provider ] and [ enter name of Customer ].”
Enter a description of the Services to be performed under this SOW
Include details such as key individuals, overall project timeline, milestones, etc.
Deliverables
This is an optional field. Use it if the services include creating deliverables. Deliverables can be intangible items like software code or tangible items like murals or hardware. Most services that include delivering or giving something to someone (in physical or digital form) will use this field. Services such as cleaning or providing guidance generally do not involve creating deliverables.
If there are no deliverables, delete this entire row, along with the rows for Time of Assignment and Third-Party Materials.
Square brackets with blank space indicate choices that are optional. You can pick none, one, or more than one. Indicate selections by checking the box for those you wish to include and/or deleting the unused options.
Deliverables include in-progress but not complete drafts or components of Deliverables and their associated intellectual property.
Use this option if owning drafts, components, and incomplete projects is important to the client.
Deliverables generally include completed projects, but not always works-in-progress. Some states handle intellectual property ownership of drafts and incomplete components through the concept of work made for hire. However, this concept can create unintended employment relationships in some states. As a result, the PSA does not use the work made for hire concept.
Deliverables will meet the attached specifications.
Use this option if the client has specifications for the project.
Use this option if using the acceptance process in Section 1.4.
Rejection Period
The client will be deemed to have accepted the deliverable if the client does not reject the deliverable within this time period.
Resubmission Period
If the client does reject a deliverable, the provider will have this amount of time to correct the identified issues.
Time of Assignment
This field is only relevant if the services include deliverables.
Customer owns Deliverables as they are created.
Select this option if the client will own deliverables as they are created, regardless of whether they have paid. This is a customer-favorable position, especially in situations where the provider is paid in arrears or after the performance of services.
From a customer’s perspective, assignment being contingent upon payment of fees could create a cloud over title to the intellectual property. It could also create lack of clarity as to when assignment happened for purposes of IP ownership.
Customer owns Deliverables upon payment of associated Fees.
Select this option if the client will own deliverables only after they have paid for them. This is a more provider-favorable position.
In a service relationship, often the only leverage a provider has is to withhold assignment and delivery of deliverables. Without this, there is little incentive to get a delinquent customer to pay outstanding fees.
Third-Party Materials
This field is only relevant if the services include deliverables.
Parentheses with blank space indicate a choice you need to make where one option must be chosen, but not more than one should be selected.
No Third-Party Materials will be incorporated into the Deliverables
Depending on the nature of services, some clients will prefer to have completely originally work created. In those situations, they do not want any third-party materials included and you should select this option.
Common third-party materials include open source software, music created by someone else, and hardware component parts.
Third-Party Materials will be incorporated into the Deliverables
Use this option if third-party materials such as sourced component parts, open source libraries, or licensed materials will be incorporated into deliverables.
Describe fees
Fees can be expressed by hourly rate, by project, by milestone, etc. Also include any pass-through or fractional charges such as for tooling or third-party license fees.
Select this option if the client has an express travel and expense policy they would like to include.
[ Fill in payment terms, e.g., 30 days from Customer’s receipt of invoice ]
Payment periods are how quickly a client must pay a bill. This is sometimes referred to as NET terms such as NET-30 (meaning bills must be paid within 30 days).
[ Fill in cadence of sending invoices ]
Invoice periods are how frequently the client will be billed. For example, monthly, bi-monthly, weekly, upon acceptance, after each milestone, etc.
If the SOW Date is different from the date of signature, then set that date using this option.
[ Fill in custom SOW Date ]
Use this option if there is no set end date for services. For example, if services will end upon completion of certain milestones or when the project is complete.
Customer Obligations
This is an optional field. Use it to identify dependencies on the client. If there are no customer obligations, delete the entire row.
[ Fill in Customer’s Obligations ]
Customer obligations can include anything a client must do in order for the provider to be able to provide services. For example, identifying a single point of contact, restricting use of deliverables to a particular purpose or geographic region, or cooperating by giving access to specific systems.
Other Changes to Standard Terms
Including Other Changes is optional. Examples of how to use this section can be found in the Language Library.
Changes made here will apply to this particular SOW only and not the overarching Agreement.
The Common Paper Professional Services Standard Terms Version 1.1
The Professional Services Agreement incorporates the Standard Terms by reference, with a link to commonpaper.com/standards/professional-services-agreement/1.1. Each version of the Standard Terms will remain unchanged and posted our website, and updates will get posted as new versions.
Incorporated by reference
Incorporating the Standard Terms by reference ensures there are no hidden changes in the Standard Terms.
However, if the Cover Page omits or does not define a highlighted word, the default meaning will be “none” or “not applicable” and the correlating clause, sentence, or section does not apply to this Agreement
Some variables are optional. When optional variables are removed from the Cover Page, the related clauses will not apply to the contract.
A copy of the Standard Terms is attached for convenience only
This allows including a copy of the text of the Standard Terms for convenience. You can find a version without the standard terms attached on the professional services agreement page).
Key Terms
The Key Terms contains the key legal details of each specific contract.
Effective Date
The Effective Date is when the Agreement starts. If the Effective Date is different than the SOW Date, then things like confidentiality obligations start on the Effective Date, while the services won’t start until the SOW Date.
Governing Law
Governing Law identifies the set of laws under which the contract will be interpreted.
Chosen Courts
Chosen Courts identifies where a lawsuit related to the contract can be filed in the event of a dispute.
Covered Claims
Including Covered Claims is optional. Use this Variable to set which claims the provider and/or customer will be responsible for under an indemnity obligation.
Section 9 of the Standard Terms includes the full language around indemnities and Covered Claims, including narrowing the obligation to claims brought by entities other than the provider, customer, end users, or their affiliates (i.e., third party claims).
If there are no Covered Claims, delete the entire row.
[ (a) the Deliverables (excluding any Customer Materials and Third-Party Materials procured by Customer), when used by Customer according to the terms of the SOW and the Agreement, violate, misappropriate, or otherwise infringe upon anyone else’s intellectual property or other proprietary rights; (b) Provider’s employees or Subcontractors are deemed to be Customer’s employees because of Provider’s actions or omissions; or (c) arises out of Provider’s gross negligence, fraud, or willful misconduct. ]
This reflects a default for Provider Covered Claims (i.e., what indemnification obligations the provider has) set by the Committee.
You should modify it to address your particular situation. For example, subpart (a) will not be relevant if the services do not include creating deliverables.
[ (a) Customer Materials or Third-Party Materials procured by Customer, when used by Provider according to the terms of the SOW and the Agreement, violate, misappropriate, or otherwise infringe upon anyone else’s intellectual property or other proprietary rights; or (b) arises out of Customer’s gross negligence, fraud, or willful misconduct. ]
This reflects a default for Customer Covered Claims (i.e., what indemnification obligations the provider has) set by the Committee.
You should modify it to address your particular situation. For example, subpart (a) will not be relevant if the services do not require the client to provide their own materials or third-party materials.
General Cap Amount
The General Cap Amount is the maximum dollar amount a party to the contract could be responsible for in the event of a legal dispute over the contract. It applies to all contract claims, except for Increased Claims (below), Unlimited Claims (below), and claims that cannot be limited as a matter of law.
Deleting the General Cap Amount does not set it to $0. Instead, it would mean there is no monetary limitation of liability that applies to the contract, and either party could be responsible for an unlimited amount of monetary damages in the event of a legal dispute over the contract.
[ x ]
This option sets a variable liability cap amount that fluctuates with the cost of the contract. It is expressed as a multiple of fees, for example 1x or 2x. This option sets the time period for calculating the fees to the 12 months before the claim.
This option sets a fixed liability cap amount. It is expressed as a monetary amount, for example $1,000,000.
In general, a $0 liability cap would be unenforceable.
This option sets a hybrid liability cap amount. It combines the two above options.
Paid or Payable
Including fees that are “paid or payable” (but potentially unpaid) helps balance the incentives between a provider and customer. If the liability cap is set to the fees paid but does not include payable but unpaid fees, a customer could pay a fraction of the cost they agreed to and limit their liability to that lower amount.
Greater
This is set to “greater” rather than “lesser” to avoid situations creating a $0 liability cap, for example where there are zero fees due.
Increased Claims
Including Increased Claims is optional. If using this variable, it will define certain claims that are not subject to the General Cap Amount, but are instead subject to the Increased Cap Amount (below). In addition, Increased Claims are not subject to the damages waiver in Section 8.2.
If there are no Increased Claims, delete the entire row.
Increased Cap Amount
Including an Increased Cap Amount is optional, but it must be set if you are including Increased Claims. If there are no Increased Claims, delete the entire row.
Unlimited Claims
Including Unlimited Claims is optional. If using this variable, it will define certain claims that are not subject to any monetary liability cap.
Additional Warranties
Including Additional Warranties is optional. If there are no Additional Warranties, delete the entire row.
Insurance Minimums
Including Insurance Minimums is optional. If there are no Insurance Minimums, delete this entire row.
[ ] For Provider
Use this portion to set insurance minimums for the services provider.
[ ] For Customer
Use this portion to set insurance minimums for the client. This can be relevant if, for example, the provider must be onsite at the client’s property or office to perform the services.
Attachments and Supplements
All sections in the Attachments and Supplements section are optional. Delete any rows that do not apply.
DPA
A Data Processing Agreement is commonly used by companies that need to comply with the GDPR. GDPR is the legal regulation that protects an individual’s personal data in Europe (EU) and the European Economic Area (EEA). It restricts what companies can and cannot do with the personal data of EU/EEA individuals.
Customer Policies
This allows the client to attach any relevant policies, such as sustainable practices requirements, network access restrictions, or vendor management policies.
Security Policy
Security policies are more relevant if the provider will be using its own systems in a way that interacts with or hosts the client’s data, product, or systems.
Publicity Rights
By default, the Standard Terms prohibit identifying the client as a customer. Use this section to override that default.
Using this override is optional. If you prefer to keep the default of no publicity rights, delete this entire row.
This option allows the provider to identify the client as a customer on its website and in marketing such as on customer lists.
This option allows the provider to identify the client as a customer only in non-public settings, such as to potential investors.
Other Changes to Standard Terms
Including Other Changes is optional. Examples of how to use this section can be found in the Language Library.
Changes made here will apply to the Agreement and all SOWs that incorporate the Agreement.
Providing Services
The PSA works for professional services that result in deliverables, as well as services that do not.
The SOW allows each engagement identify whether there are deliverables under the SOW. If so, several provisions below (e.g., Section 1.4 (Acceptance) and the intellectual property provisions in Sections 2.1–2.4) apply. If no deliverables are identified on the SOW, then the sections specific to deliverables do not apply.
Change Orders
Some companies have very strict change order processes and policies. In those situations, a more specific change order process can be attached and incorporated on the Cover Page.
However, a Change Order will not be binding until Provider and Customer agree in writing on the Change Order
By default, change orders require written approval by both parties, giving some assurance that people will not inadvertently issue a change order.
If you need more flexibility for Change Orders, you could use the Other Changes to the Standard Terms section on the SOW to permit other forms of approval (e.g., verbal, by email, etc.) for Change Orders .
If according to the SOW Deliverables are subject to this section
The acceptance and rejection process only applies if the SOW indicates deliverables are subject to this section.
Customer will be deemed to have approved a Deliverable if Customer does not reject the Deliverable within the Rejection Period
The default in the event of inaction is approval and acceptance by the Customer.
Provider may use Subcontractors to perform the Services only with Customer’s prior permission
Due to the personal nature of professional services, subcontracting is prohibited without prior permission. If a provider knows they will need to use subcontractors, they can get permission in the SOW directly, either in the Services description field or in the Other Changes to the Standard Terms field.
Except for Pre-Existing Materials and Third-Party Materials
Pre-Existing Materials and Third-Party Materials are not assigned as part of Deliverables. They are handled by license grants in Section 2 below.
Provider assigns all right, title, and interest in the Deliverables (if any) to Customer at the Time of Assignment
The assumption is that the customer will own the deliverables created under this agreement. The question that remains is when the legal intellectual property rights transfer to the customer.
You can use the Time of Assignment field in the SOW to set whether the customer will own deliverables as they are created or when then are paid for.
Third-Party Materials
Third-party materials are items created by someone other than the provider or customer, and that are used as part of the deliverables. Some common examples of third-party materials include open source software, song clips, and pre-existing or outsourced designs.
Provider may incorporate Third-Party Materials into Deliverables only if allowed in the SOW and as authorized by Customer in writing (including by email)
The SOW must explicitly authorize use of third-party materials. In addition, the customer may provide additional restrictions around third-party materials by email.
Conversely, the authorization for third-party materials can be broad. For example, “Provider may use any permissive open source software licensed under terms such as the MIT, BSD, or similar license.”
Provider may use all Feedback freely without any restriction or obligation
Many customers bristle at seeing an assignment in their purchase contracts. This is a lightweight approach to clarify that a provider may use any and all feedback that’s given. If you prefer to be more explicit about intellectual property ownership over Feedback, you could use the Other Changes to the Standard Terms section on the Cover Page to add an assignment for Feedback.
If the parties have a DPA
You can incorporate your own DPA or use the Common Paper DPA.
Payment
This standard intentionally does not include fines for late payments. In the experience of Committee members, payment disputes were more often an oversight by the customer rather than an intentionally bad act. Moreover, the time and expense of enforcing late payment fines tend to be more than what a provider recoups; not to mention the strained customer relationship these actions can create.
If adding a late payment penalty is important for you, you could use the Other Changes to the Standard Terms section on the Cover Page to do so.
Continue until 12 months have elapsed since the end of the latest SOW Term end date
The Agreement will last through the duration of all SOWs + a trailing period of 12 months following the end of the latest SOW. This allows time to elapse between SOWs without expiring (or ending) the Agreement. Oftentimes, a client will work with the same services provider on multiple projects, but have time between projects. This bridges the time gap between projects so that the parties do not have to sign a new contract and can instead continue to issue SOWs if the last SOW ended less than 12 months ago.
Either party may terminate this Agreement or an SOW immediately
This section creates termination rights that extend to the entire Agreement or an individually impacted SOW.
Either party may terminate an affected SOW
This section creates a termination right that extend only to an impacted SOW, but not the overall Agreement.
Either party may terminate this Agreement for any or no reason if there are no active SOWs
If the engagement has ended and the parties prefer to not allow the Agreement extend for an additional 12 months, they can terminate the Agreement.
Termination of the Agreement pursuant to Section 5.2(a) or the Key Terms will automatically terminate all SOWs
This clarifies that if the Agreement is terminated, then all SOWs that incorporate the Agreement are also terminated.
If there are Increased Claims, each party’s total cumulative liability for the Increased Claims arising out of or relating to this Agreement will not be more than the Increased Cap Amount
This sets the Increased Cap Amount, or supercap, for matters identified as an Increased Claim.
All other claims arising out of or relating to this Agreement will not be more than the General Cap Amount
All other claims are subject to the General Cap Amount.
The liability caps in Section 8.1 do not apply to any Unlimited Claims
This creates a carve-out for Unlimited Claims, where neither the Increased Cap Amount nor the General Cap Amount apply. However, the damages waiver in Section 8.2 still applies to Unlimited Claims. The one exception is if Breach of Section 11 (Confidentiality) is an Unlimited Claim, in which case the General Cap Amount, Increased Cap Amount, and Section 8.2 damages waiver do not apply to a breach of confidentiality.
The liability provisions are set this way because the trend in commercial contracting has been to use an Increased Cap Amount, or supercap, for higher risk concerns such as personal data issues. In addition, having fully uncapped and unlimited claims has come to be seen as a risk that is hard to justify. As a result, companies have more and more relied on the damages waiver to have some measure of risk mitigation when they do remove a monetary liability cap on certain claims.
Made by someone other than Customer or its Affiliates
This excludes claims by the customer or its affiliates so that provider is not responsible for first party claims. In other words, a customer could not sue the provider and then seek indemnification coverage for the lawsuit they filed.
Made by someone other than Provider or its Affiliates
This excludes claims by the provider or its affiliates, so that the customer is not responsible for first party claims. In other words, a provider could not sue the customer and then seek indemnification coverage for the lawsuit they filed.
Exclusive Remedy
It is very common for indemnification obligations to be the sole and exclusive remedy for claims that are subject to indemnity. This is important in situations where there is overlap between other contractual obligations or commitments (such as representations and warranties) and claims that are subject to indemnity.
Governing Law and Chosen Courts
Common Paper standard agreements were created with the laws of the United States in mind by a committee of US-based attorneys.
The parties will bring any legal suit, action, or proceeding about this Agreement or an SOW in the Chosen Courts and each party irrevocably submits to the exclusive jurisdiction of the Chosen Courts
Some companies prefer arbitration for speed and confidentiality reasons. You could use the Other Changes to the Standard Terms section on the Cover Page to add mandatory arbitration.
Some companies prefer arbitration for speed and confidentiality reasons. You could use the Other Changes to the Standard Terms section on the Cover Page to add mandatory arbitration.
However, Customer may assign this Agreement upon notice if Customer undergoes a merger, change of control, reorganization, or sale of all or substantially all its equity, business, or assets to which this Agreement relates
This only allows the client to make an assignment for an acquisition or change of control. It intentionally does not give the same right to the provider. Generally, professional services providers are not seen as easily interchangeable. Clients may pick a particular provider for reasons other than skill or experience, and allowing the provider to assign the contract for services erodes that trust and client decision making.
No Publicity
This prohibits all publicity about the relationship by either party.
For situations where the provider can identify the customer in customer lists, you can adjust the default by using the Other Changes to the Standard Terms section on the Cover Page.
Free to use under CC BY 4.0
All Common Paper agreements are released under the Creative Commons CC BY 4.0 license, which enables you to use the agreements in any way, as long as you leave in the attribution.
