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Whether you hire or complete the work for a one-time fee or a weekly fee, purchase or sell any services, you want to stay on the safe side and have everything settled. The fee agreement contract helps both a client and a hired person know exactly how much to expect for the work or service completed. Explore what is a fee agreement, how to draft it, and reasons why you need to incorporate it into your business processes.
A fee agreement is a document signed between a client requesting the services and a service professional that sets out the terms under which a service provider will do the work. It expresses what services will be delivered based on time spent and explicitly states how much money should be paid to avoid any misunderstandings between the parties.
In general, a fee agreement should explain the payment type (hourly, monthly, or per-project), timeframe (paid in advance, upon completion, or during the work), any dispute management instructions, and other essential fee-related details.
There are many types of fee agreement forms, including general fee agreements, contingent fee agreements, hybrid fee agreements, fixed fee agreements, success fee agreements, and other fee agreement samples.
A fee agreement letter is usually a simple form of agreement that also features the specific details of the agreement and should be signed by both parties. The letter usually has basic fee details and the services provided.
It is always a good idea to have a written fee agreement, even in situations where one is not required. The following are some of the cases when you should consider using a fee agreement:
When you request any services without fee agreement, you may be asked to pay an upfront fee when you normally pay only after work is completed. Or, vice versa, assume you are a service provider and want a fee paid upfront. In both cases, fee agreement is helpful to define the rules and make sure both parties follow them.
To monetize referral services, finder organizations, such as sales representatives or referral companies, use fee agreements. Uber collects a finders fee and must sign a fee agreement with drivers when it accepts an offer for private transportation.
Another case when you need fee agreement is when there are very specific conditions according to which fee will be paid. In this case, a Conditional Fee Agreement (CFA) becomes a foundational legal safety. For example, assume you’ve hired a solicitor. With CFA, you can ensure you only pay if your case is won.
💡 Note that not all cases can be taken on a CFA basis. Your attorney will first assess the merits of your claim and then decides whether the case can be taken on a CFA basis.
Fee agreements may come in different shapes and sizes. However, you can get a general ideal of what a simple fee agreement form should look like. The most common clauses in every type of fee agreement are listed below:
The standard fee agreement contract starts by clearly defining the business names of both parties and their residing or registered address.
A fee clause is the most important part of agreements that includes the entire fee for the services provided as agreed upon (either a flat fee or the formula fee that depends on different conditions).
💡 The amount of time and fees accordingly may change as the service is being provided. For instance, when you hire an attorney, your case may need more hours than you initially agreed upon. So, the amount of time and fee here is not 100% fixed.
Ask the lawyer to estimate the amount of time your case will take, so you understand what your total costs may be. Remember that circumstances may change, and your case may require more hours than the lawyer initially expected.
Every fee agreement template should include the explicit list of services provided with the description of every service to make sure both parties understand the requirements. The services should be defined in accordance with required industry standards. For example, when you fill in the service fee agreement template, consider including the list of KPIs, certifications, or other relevant success criteria.
In this clause, you should describe under which terms and conditions the services will be considered completed. Make sure that you include as much information as possible.
In case some damages are caused as a result of the services' delivery, either incidental or directly resulting from execution of conditions described in the Services clause. This clause ensures that the contractor is protected, and the client does not initiate any lawsuit against a person providing services.
This clause defines the governing law under which the agreement will be executed, specifying regulations and jurisdiction.
As has already been mentioned, fee agreements may vary depending on the industry and your business goals. Above are described some of the key terms, but your jurisdiction may require some specific clauses that haven’t been mentioned here.
To create a legally binding fee agreement, follow these steps:
1. Negotiate terms with another party
Before you create and sign any agreement, always make sure all the details are orally negotiated and agreed upon. A throughout negotiation process will help you to define a clear fee structure template and ensure a final agreement will satisfy the needs of both parties.
2. Fill out all the essential details
Once all the details are agreed upon, start with feeling in all the essential details in your contract. You can find simple fee agreement forms to streamline the process of drafting, including success fee agreement templates and other types of fee agreements.
3. Print out your agreement & sign
For sure, it’s always recommended to consult a lawyer before you finalize any contracts. However, a printable Lawrina agreement in PDF format will give you a great head-start and a good framework to start with. After you fill in all the required details, you can easily download the fee agreement form.
With a well-drafted fee agreement, you can ensure the fee for services provided is reasonable and paid on time and after all the services are successfully completed. It does not take much effort to create the fee agreement. However, having it will bring significant short-term and long-term benefits.
When you use this Fee Agreement template PDF, you assume all responsibility and liability. Lawrina retains no legal responsibility for the legal document's accuracy, reliability, or functionality.
The unprofessional use of this legal form or other templates on this website could result in direct or indirect losses or damages. By downloading, printing, or using this agreement, you accept all liability for any loss or damage you may suffer.
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