Professional Contracts: Everything You Need to Know
Professional contracts, also known as professional services contracts or personal services contracts, are agreements entered into by organizations and their contractors to provide specialized services, normally for a short time. 3 min read
Professional contracts, also known as professional services contracts or personal services contracts, are agreements entered into by organizations and their contractors to provide specialized services, normally for a short time. Such services include legal services, technical advice, feasibility studies, and the services of sports athletes. The agreement is signed when one party procures the services of another and it states the benefits, responsibilities, and rights of both parties. The contract also puts in place safeguards to prevent the violation of the terms of the agreement.
According to the laws of most states, a contract is valid only if the following basic requirements are met:
- The contract must give details about the parties involved and the services to be procured.
- It should mention consideration. Consideration refers to the price the person who promises to offer a service asks in return for the service. Consideration can be in form of money or something else.
- The contract must be legal because courts cannot hear disputes related to illegal activities. Many states cannot enforce contracts related to gambling, for example.
- Consent to sign the contract should not be made under duress or deception.
A professional services agreement protects both the hiring company and the service provider and will ensure that services are provided on time and at the agreed cost.
The following details should be stated in a proper professional services agreement:
- The name of the procuring party
- The name of the service provider
- An introduction to the service provider
- An explanation of the services to be provided
- The minimum desired quality of the services
- Specifications of the services
- The duration of the contract
- Rates and payments
- The terms and conditions of the contract
- The procedure of termination of the agreement
- Penalties in case of violation of the contract
- Validation of the agreement
- The signatures of the project manager, service provider, and witnesses.
Sports contracts are different from normal contracts, and they are classified as personal services contracts because athletes provide unique talents. Athletes in the US normally get Standard Player Contracts (SPK). These are “boilerplate” contracts and are uniform for all players in the league. The only details that are unique to each athlete's contract are terms of financial compensation.
Although it not a requirement to hire agents or lawyers during contract negotiations, athletes can get invaluable help and maximize benefits by hiring qualified agents and lawyers. Athletes may also use other types of professional contracts, including the following:
Unlike normal sports contracts, endorsement contracts are not made based on the relationship between an employee and an employer. The contract gives a sponsor the right to use an athlete's name and image in advertisement. Endorsement agreements don't have many rules, although most sports leagues do not allow players to endorse alcohol, tobacco, and some nutritional supplements.
Appearance contracts set terms of compensation for an athlete appearing in a sports event.
These are similar to endorsement contracts. They are signed by some players' associations to allow sponsors to use the names and images of a group of athletes.
Termination of a Professional Contract
A professional contract can be terminated in any of the following situations:
- Lapse of the agreed time
- The death or disability of any of the parties involved
- Carrying out the contract has become illegal
Minors and Professional Contracts
There can be challenges with minors signing contracts because of questions about the capacity of the minor. This is especially the case in the sports fields. The laws of many states allow minors to sign professional contracts if some conditions are fulfilled. Sometimes the law requires the signature of a parent or guardian. Minors also have the right to void contracts at any time without serious consequences.
Situations in Which a Contract Can Be Voided
- If pressure or deception was used to facilitate the signing of the contract. The consent to such a contract is not considered voluntary.
- The contract can also be affected by certain mistakes by any of the parties involved.
To minimize risks of loss or litigation that could arise after signing of professional contracts, it is best to err on the side of caution when signing. It is important to carefully scrutinize all the terms and think of what could go wrong. A knowledgeable lawyer can help you to mitigate some of the risks.
If you need help with professional contracts, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.