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Drafting a service agreement involves defining the core of the collaboration: which services, for what fee, for what period, with what liability, and under what conditions you can terminate it. Legally, it is a contract for services within the meaning of Article 7:400 of the Dutch Civil Code. A good contract makes the scope concrete, regulates payment and termination, and confirms that the service provider works independently and is not an employee.
The short answer
- Parties and scope: specify who provides which services, with a clear delineation.
- Remuneration: hourly or fixed rate, additional work, expenses and payment terms.
- Effort or result: specify whether it concerns an obligation of effort or an obligation of result.
- Duration and termination: period, notice period and settlement of ongoing work.
- Liability and independence: a reasonable limitation plus confirmation that there is no employment relationship.
What you determine in advance when drafting a service agreement
Before you begin drafting a service agreement, determine two things. First: does this genuinely concern service provision and not a contract for work or employment in a salaried position? Service provision falls under Article 7:400 of the Dutch Civil Code: the performance of activities that do not consist of creating a tangible work. Second: does the service provider work independently? If there is de facto authority, no entrepreneurial risk, and the assignment must be performed personally, there is a risk of a disguised employment contract resulting in retroactive payroll tax assessments.
Next, determine whether you agree on an obligation of effort or an obligation of result. Article 7:401 of the Dutch Civil Code imposes an obligation of effort on the contractor: to act as a good contractor. If you wish to enforce a specific result, you must include this explicitly; otherwise, the standard of effort applies.
The fixed components
- Parties. The Client and the Contractor, with their details.
- Scope. A clear description of the services and what is specifically not included.
- Remuneration. Hourly or fixed rate, additional work, expenses, invoicing and payment terms.
- Duration. Fixed-term or indefinite, with a notice period.
- Effort or result. Which obligation applies, and which standards or KPIs are applicable.
- Liability. A reasonable limitation, for example linked to the contract sum.
- Confidentiality and intellectual property. What remains confidential and who acquires the rights.
- Independence. Confirmation that the service provider is not an employee and pays their own taxes.
Compensation and payment
The remuneration must be explicitly stated in the contract. Specify whether you are agreeing on an hourly rate or a fixed price, how additional work is settled, and which expenses are to be borne by which party. Also regulate the payment term and what happens in the event of late payment, such as statutory commercial interest pursuant to Article 6:119a of the Dutch Civil Code and collection costs. Without an agreement on the price, you fall back on Article 7:405 of the Dutch Civil Code, which awards a customary or reasonable wage, and this almost always leads to dispute.
For long-term assignments, a clear invoicing schedule is advisable, for example, monthly in arrears. This way, you maintain control over cash flow and prevent a large amount from accumulating before you know whether the collaboration is satisfactory.
Termination, liability and self-employment
Arrange for termination explicitly. Pursuant to Article 7:408 of the Dutch Civil Code, the client can in principle always terminate the contract, whereas a professional contractor can only terminate a long-term agreement for a serious reason. Establish notice periods and determine how ongoing work and the final invoice will be settled. Additionally, include a liability clause that limits damages to a reasonable amount, because without such an agreement, the full provisions of Article 6:74 of the Dutch Civil Code apply.
Finally, pay attention to independence. Include provisions confirming that the service provider does not work under authority, may be replaced, and bears their own taxes and contributions. Ensure that practice matches the written word, because when enforcing against bogus self-employment, the Tax and Customs Administration looks at the actual situation and not just the text.
Practical example: an SME enters into an ongoing ICT management contract with an independent administrator. The service agreement specifies the scope, a monthly rate, a response time for malfunctions, a two-month notice period, a liability ceiling, and a provision regarding independence and substitution. When the company wanted to switch suppliers, the termination clause and transfer agreements made it immediately clear how the collaboration would be terminated properly.
Honest recommendation
You do not always need a lawyer to draft a service agreement. For a short-term, straightforward assignment with a trusted party and a limited amount, you can often create a solid contract yourself, provided you clearly define the scope, remuneration, termination, and liability. A good template that you understand and adapt to your situation is sufficient in such cases.
Do seek assistance in cases involving significant interests: a high contract sum, long-term collaboration, sensitive information or intellectual property, or doubts as to whether the relationship constitutes a disguised employment contract. In these areas, an error regarding liability or independence can lead to substantial damages or additional tax assessments. A legal expert ensures that the contract is legally sound and that the agreements align with your actual activities.
Read more or get started immediately? View the service agreement from MKB Juristen, first read what a service agreement is , and see when it is better to choose to have a service agreement drafted .
Frequently Asked Questions
At a minimum: the parties, a clear scope, the remuneration with payment term, the duration and notice period, whether it concerns an obligation of best efforts or an obligation of result, a limitation of liability, and provisions regarding confidentiality, intellectual property, and the independence of the service provider.
Determine whether to agree on an hourly rate or a fixed price, how additional work and expenses will be settled, and within what timeframe payment is due. Also arrange for statutory commercial interest and collection costs in the event of late payment. Without a price agreement, Article 7:405 of the Dutch Civil Code applies, which awards reasonable remuneration and quickly leads to disputes.
By default, an obligation of best effort applies pursuant to Article 7:401 of the Dutch Civil Code: acting as a good contractor. If you wish to enforce a concrete result, explicitly establish this with clear criteria or KPIs. Otherwise, you cannot hold the service provider to a specific end result.
Pursuant to Article 7:408 of the Dutch Civil Code, the client can in principle always terminate the contract; a professional contractor, however, can only do so for a serious reason. Establish notice periods and describe how ongoing work and the final invoice will be settled, so that you are not entirely dependent on the general statutory rule.
Include provisions confirming that the service provider works independently, may be replaced, and bears their own taxes, and ensure that practice corresponds with this. In cases of de facto authority without entrepreneurial risk, the relationship may be classified as an employment contract, resulting in the assessment of back taxes on payroll taxes.
Include a liability clause with a maximum, for example equal to the contract sum or the amount paid out by the insurer, and exclude indirect damage where possible. In the absence of an agreement, the full provisions of Article 6:74 of the Dutch Civil Code apply. The limitation must be reasonable to stand up in court.
For a simple assignment with limited interests, a good model may suffice, provided you understand it and adapt it to your situation. For a high contract value, sensitive intellectual property, or doubts regarding independence, a custom approach is wiser, as a mistake on these points can prove costly.
