Core Clauses of a Service Agreement
Scope of Work and Deliverables
Write what will be delivered, in what format, by when, and what counts as done. "Website design" is a hope. "Five-page responsive website, three design rounds, delivered as a staging link and source files" is a scope. Add a line on what is excluded: hosting, copywriting, photography, post-launch support. Anything not in writing will be argued about later.
Include a change-request process. When the client asks for more, the provider quotes it and the client approves before work starts.
Acceptance and Review
Say how long the client has to review a deliverable and what happens if they stay silent. A common drafting choice is that silence after a set number of days counts as acceptance. Without this, payment can hang on a client's convenience.
Payment Terms
This is the clause people skim and later regret. Spell out:
The fee, and whether it is fixed, hourly, or a retainer.
Milestones. Tie instalments to deliverables, not to calendar dates alone. An advance before work begins is reasonable.
The invoice due date, counted from invoice or from acceptance.
Interest or a late fee on overdue sums.
Whether GST is added on top, and who bears TDS. Corporate clients often deduct tax at source, so state that the provider will receive a TDS certificate. Check current thresholds and rates, since tax rules and section numbering changed with the new Income-tax Act in 2026.
Expenses and whether they need pre-approval.
If the provider is a registered micro or small enterprise, the MSMED Act, 2006 sets a statutory ceiling on payment time (45 days from acceptance of goods or services, as I understand the provision) with interest for delay. Such a provider can raise delayed-payment complaints through MSME Samadhaan. Confirm the current position before relying on it. If this applies to you, see our guidance on
MSME registration.
Intellectual Property
Here is the trap for clients. Under the Copyright Act, 1957, the author is the first owner of a work, and the exception is work made by an employee under a contract of service, which belongs to the employer. A freelancer is not an employee, so the freelancer owns the code, design, or text they create unless they assign it.
Assignment under Section 19 must be in writing and signed by the assignor. It should identify the work, the rights transferred, the duration, the territory, and the consideration. Where duration is left out, the law presumes five years. Where territory is left out, it presumes India. A client who forgets to specify "worldwide, for the full term of copyright" can find rights limited in ways they never intended. The Copyright Office's site is copyright.gov.in.
Practical drafting choices:
Assign IP on full payment, not on signing, so the provider keeps leverage.
Let the provider keep pre-existing tools, templates, and code libraries, and give the client a licence to use them inside the deliverable.
Let the provider show the work in a portfolio unless the client needs it kept confidential.
Cover third-party material: stock images, fonts, open-source libraries, and their licences.
Confidentiality
Define what is confidential, limit use to the project, and say how long the duty lasts. If the relationship starts with sensitive disclosures, a separate NDA signed first is cleaner.
Warranties and Indemnity
The provider usually promises that the work is original and does not knowingly infringe anyone's rights, and that it will be done with reasonable skill. The client promises that materials they supply are theirs to use. An indemnity clause says who pays if a third party sues over those promises. Keep indemnities mutual and specific. One-way, open-ended indemnities are a sign the draft was written by the stronger side and tend to attract pushback.
Limitation of Liability
Providers should cap their exposure, commonly at the fees paid for the engagement or the preceding few months. Clients should ask for carve-outs for fraud, wilful misconduct, confidentiality breach, and IP infringement. Courts apply the Section 73 and 74 principles of reasonable, provable loss, so an extreme cap or an extreme penalty is more likely to be challenged than a balanced one.
Excluding liability for deliberate wrongdoing is generally unsafe as a matter of public policy.
Term and Termination
State the start date, end date, or completion event. Then give each side a way out:
For convenience
With written notice and payment for work done to date.
For cause
After a stated cure period for an uncured breach.
Immediately
For insolvency or serious misconduct.
Spell out what happens on exit: handover of files, payment for completed milestones, return of confidential material. Clients should keep the right to the work-in-progress they have paid for.
Dispute Resolution and Jurisdiction
Choose the governing law (Indian law, for Indian parties) and a route.
Courts
Name a city whose courts will have exclusive jurisdiction. For commercial disputes above the specified value, the Commercial Courts Act, 2015 requires pre-institution mediation in many cases unless urgent interim relief is sought, so factor that in.
Arbitration
Under the Arbitration and Conciliation Act, 1996, name the seat, the number of arbitrators, and the language. Arbitration is private and often quicker, but costs can run high on small claims.
Many agreements start with a negotiation step, then mediation, then arbitration or court. Whatever you choose, keep it consistent. A clause that names three different forums creates the very dispute it was meant to prevent.