The Service Provider Agreement is a contract that involves the performance of services in exchange for a certain consideration. The party providing the service is often called the “service provider” while the party receiving and paying for the services may be called the “client” or “service recipient.”
The Service Provider Agreement is a common designation for service contracts involving independent contractors and includes provisions on the rate of compensation, the description of services to be performed, and the length or duration of the engagement.
As compared to employment contracts or agreements, service provider agreements are more flexible in terms of the rights and obligations that the parties can agree upon in the contract. For example, employment contracts under the labor laws in most countries around the world, may need to contain specific clauses and benefits such as holiday pay, paid time-off and sick leaves. Such agreements must also comply with the local laws in order to be enforceable.