Professional Services Contract (UK)
This Professional Services Contract (the “Agreement”) is entered into on [Effective Date] (the “Effective Date”) by and between:
[Client Name], [Who Client], with its registered or principal address at [Client Address], [Client City], [Client County], [Client Postcode], England (hereinafter referred to as the “Client”); and
[Provider Name], [Who Provider], with its registered or principal address at [Provider Address], [Provider City], [Provider County], [Provider Postcode], England (hereinafter referred to as the “Provider”).
The Client and the Provider are referred to collectively in this Agreement as the “Parties” and individually as a “Party”.
BACKGROUND
WHEREAS, the Client wishes to engage the Provider to provide professional services in the field of [Professional Field] as described in this Agreement; and
WHEREAS, the Provider has represented that it possesses the necessary qualifications, professional expertise, and experience to perform such services to the requisite professional standard; and
WHEREAS, the Parties wish to set out in writing the terms and conditions upon which the Provider shall provide the Professional Services to the Client;
NOW, THEREFORE, in consideration of the mutual promises and undertakings set out herein, and for other good and valuable consideration, the receipt and adequacy of which the Parties hereby acknowledge, the Parties agree as follows:
1. ENGAGEMENT AND PROFESSIONAL SERVICES
1.1 The Client hereby engages the Provider, and the Provider hereby accepts the engagement, to provide the following professional services (the “Professional Services”):
[Services Description]
1.2 The Provider shall perform the Professional Services with [Standard Of Care], and in compliance with all applicable laws, regulations, and professional standards in England and Wales. This obligation is in addition to and not in substitution for the implied term under Section 13 of the Supply of Goods and Services Act 1982 that the Provider will carry out the services with reasonable care and skill.
1.3 The Provider owes a duty of care to the Client in the performance of the Professional Services. The standard of care required shall be that of a reasonably competent professional in the Provider’s field of expertise.
1.4 Any material change to the scope of the Professional Services must be agreed in writing between the Parties by way of a written change order signed by both Parties. Work performed outside the agreed scope without prior written authorisation shall not entitle the Provider to additional remuneration.
2. TERM
Term Type: [Term Type]
3. INDEPENDENT CONTRACTOR STATUS
3.1 The Provider is an independent contractor and not an employee, worker, or agent of the Client. Nothing in this Agreement shall create or be deemed to create an employment relationship, partnership, or joint venture between the Parties.
3.2 The Provider shall be solely responsible for the payment of all income tax, National Insurance contributions, and any other taxes or levies arising from the Fees received under this Agreement.
3.3 The Provider acknowledges the off-payroll working rules contained in Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003. The Parties intend that this engagement is a genuine business-to-business arrangement and, if the Provider were engaged directly, the relationship would not constitute employment.
4. FEES AND PAYMENT
4.1 In consideration of the Professional Services, the Client shall pay the Provider [Fee Type] of £[Fee Amount] (the “Fees”), exclusive of VAT.
4.2 The Provider shall submit invoices to the Client, and the Client shall pay each invoice [Payment Terms].
4.3 All payments shall be made in pounds sterling (£) by bank transfer to an account nominated in writing by the Provider.
4.4 If the Client fails to pay any sum due under this Agreement by the due date, the Provider shall be entitled to charge interest on the overdue amount at the rate of 8% per annum above the Bank of England base rate, in accordance with the Late Payment of Commercial Debts (Interest) Act 1998, accruing daily from the due date until payment is received in full. The Provider shall also be entitled to recover the fixed-sum compensation and reasonable recovery costs permitted by the 1998 Act.
5. PROFESSIONAL STANDARD AND DUTY OF CARE
5.1 The Provider warrants that it shall perform the Professional Services to [Standard Of Care].
5.2 The Provider warrants that all personnel assigned to perform the Professional Services shall possess the qualifications, skills, and experience necessary to perform their allocated tasks to the standard required by this Agreement.
5.3 The Provider shall comply with all applicable professional codes of conduct, ethical standards, and regulatory requirements relevant to the provision of the Professional Services in England and Wales.
5.4 Where the Provider provides advice, reports, or recommendations, the Client is entitled to rely upon such advice, reports, or recommendations as having been prepared with the requisite professional skill and care. The Provider shall be liable in damages for any loss suffered by the Client as a direct result of negligent advice, subject to the limitation provisions in Clause 10.
6. CONFIDENTIALITY
6.1 Each Party undertakes that it shall not disclose to any person any Confidential Information belonging to the other Party, except as permitted by this Agreement. “Confidential Information” means any information of a confidential or proprietary nature disclosed by one Party to the other in connection with this Agreement, including but not limited to business plans, financial data, customer lists, trade secrets, technical information, and professional work product.
6.2 The confidentiality obligations in this Clause shall survive termination of this Agreement for a period of [Confidentiality Period].
6.3 The restrictions in this Clause shall not apply to information that: (a) is or becomes publicly available other than through breach of this Agreement; (b) was already known to the receiving Party before disclosure; (c) is independently developed without reference to the Confidential Information; or (d) is required to be disclosed by law, regulation, professional obligation, or order of a court of competent jurisdiction.
7. LIMITATION OF LIABILITY
7.1 Nothing in this Agreement shall limit or exclude either Party’s liability for: (a) death or personal injury caused by that Party’s negligence; (b) fraud or fraudulent misrepresentation; or (c) any other liability that cannot be limited or excluded by applicable law, including under Section 2(1) of the Unfair Contract Terms Act 1977.
7.2 Subject to Clause 10.1, neither Party shall be liable to the other for any indirect, consequential, or special loss or damage (including but not limited to loss of profit, loss of business, loss of data, loss of anticipated savings, or loss of goodwill), however arising and whether in contract, tort (including negligence), breach of statutory duty, or otherwise.
8. INTELLECTUAL PROPERTY
IP Ownership: [Ip Ownership]
8.2 Nothing in this Agreement shall affect the Provider’s ownership of any pre-existing intellectual property (“Background IP”). Where Background IP is incorporated into the Deliverables, the Provider grants the Client a non-exclusive, perpetual, royalty-free licence to use such Background IP to the extent necessary to exploit the Deliverables.
8.3 The Provider warrants that the Deliverables and work product are original and do not infringe any third-party intellectual property rights.
9. TERMINATION
9.1 Either Party may terminate this Agreement at any time by giving the other Party not less than [Termination Notice Days] days’ written notice.
9.2 Either Party may terminate this Agreement immediately by giving written notice if the other Party commits a material breach and (where capable of remedy) fails to remedy that breach within [Cure Notice Days] days after receipt of written notice specifying the breach.
9.3 Either Party may terminate this Agreement immediately by giving written notice if the other Party: (a) becomes insolvent or unable to pay its debts as they fall due; (b) has a receiver, administrator, or liquidator appointed; or (c) enters into a voluntary arrangement with its creditors.
9.4 Upon termination: (a) the Provider shall deliver to the Client all completed and partially completed Deliverables and work product; (b) the Provider shall return or securely delete all Confidential Information and personal data; (c) the Client shall pay for all Professional Services completed up to the date of termination; and (d) the provisions of Clauses 7 (Insurance), 8 (Confidentiality), 10 (Limitation of Liability), 11 (Intellectual Property), and 14 (Governing Law) shall survive termination.
10. GENERAL PROVISIONS
10.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior discussions, correspondence, negotiations, and arrangements relating to its subject matter.
10.2 Variation. No variation of this Agreement shall be effective unless it is in writing and signed by both Parties.
10.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable, that provision shall be severed from the remainder of this Agreement, which shall continue in full force and effect.
10.4 Waiver. A failure or delay by a Party to exercise any right or remedy shall not constitute a waiver of that or any other right or remedy.
10.5 Third Party Rights. No person other than a Party to this Agreement shall have any rights to enforce any term of this Agreement under the Contracts (Rights of Third Parties) Act 1999.
10.6 Notices. Any notice under this Agreement shall be in writing and delivered by hand, sent by pre-paid first-class post, or sent by email to the address of the relevant Party.
10.7 Force Majeure. Neither Party shall be liable for any failure or delay in performing its obligations where such failure or delay results from circumstances beyond the Party’s reasonable control.
11. GOVERNING LAW AND JURISDICTION
11.1 This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the laws of England and Wales.
11.2 The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
Client
________________
Signature
Date: ________________
Provider
________________
Signature
Date: ________________
What Is a Professional Services Contract (UK)?
A Professional Services Contract in the United Kingdom sets the services to be provided, the fees, the timetable, and each side's responsibilities for the engagement, with its requirements set by the Supply of Goods and Services Act 1982.
The legal framework governing professional services in England and Wales imposes a higher standard of care than that applicable to general service contracts. Under Section 13 of the Supply of Goods and Services Act 1982, every contract for the supply of services includes an implied term that the supplier will carry out the service with reasonable care and skill. For professional service providers, this standard is measured against the competence expected of a reasonably skilled practitioner in the relevant profession, as established in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 and subsequently applied across professional disciplines.
Professional service providers may also owe a concurrent duty of care in tort, particularly where the client relies on the provider's professional expertise in making decisions. The duty of care for negligent professional advice was established in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, which recognised that a professional who voluntarily assumes responsibility for providing information or advice to a client who reasonably relies on that information or advice owes a duty to exercise reasonable care. This means that a professional services provider may be liable not only for breach of contract but also for the tort of professional negligence.
Professional indemnity insurance is a critical requirement in professional services engagements. Many regulated professions in England and Wales require practitioners to maintain professional indemnity cover as a condition of practice. Even where not regulatory mandatory, PI insurance is considered standard practice and clients routinely require evidence of adequate cover before engaging a professional. A well-drafted contract should specify the minimum level of PI cover required and the duration for which it must be maintained after the engagement ends, typically 6 years to align with the limitation period under the Limitation Act 1980.
The Unfair Contract Terms Act 1977 imposes important constraints on liability limitation in professional services contracts. Liability for death or personal injury caused by negligence cannot be excluded under any circumstances. Clauses limiting liability for other types of loss must satisfy the reasonableness test, which considers factors including the parties' relative bargaining power, the availability of insurance, and the relationship between the liability cap and the fees charged.
The legal framework governing the Professional Services Contract (UK) in United Kingdom draws on several key statutes and regulatory bodies. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Parties executing a Professional Services Contract (UK) in United Kingdom should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2006 sets the foundational requirements.
When Do You Need a Professional Services Contract (UK)?
A UK Professional Services Contract is appropriate whenever a business or individual engages a specialist professional to deliver expert services requiring the exercise of professional judgment, skill, and care beyond the level expected in a general commercial service engagement.
When engaging an accountant, auditor, or tax adviser to perform a financial audit, prepare statutory accounts, provide tax compliance or advisory services, or conduct due diligence on a proposed transaction. Accounting professionals owe a duty of care that extends to the accuracy and reliability of their work product, and errors can cause significant financial loss.
When commissioning an architect, structural engineer, building surveyor, or quantity surveyor to provide design, advisory, or inspection services in connection with a construction or property project. The professional's duty of care encompasses the design integrity, compliance with Building Regulations 2010, and the accuracy of valuations, surveys, and certifications.
When engaging a management consultant, strategy adviser, or operational consultant to provide expert recommendations on business restructuring, market entry, process improvement, or organisational change. The client is entitled to rely on the consultant's professional expertise, and negligent advice can result in substantial economic loss.
When hiring an IT consultant, systems architect, or cybersecurity specialist to design, implement, or audit technology systems. IT professionals may handle sensitive data, making data protection compliance under the UK GDPR and Data Protection Act 2018 particularly important.
When the professional services provider operates through a limited company or personal service company and both parties need to document the genuine business-to-business nature of the engagement for IR35 purposes under the Income Tax (Earnings and Pensions) Act 2003.
When the provider will create valuable intellectual property such as reports, designs, software, or methodologies, and the parties need to establish clearly who owns the resulting IP under the Copyright, Designs and Patents Act 1988.
When the engagement requires a formal liability framework with a cap on aggregate liability, subject to the reasonableness test under the Unfair Contract Terms Act 1977, and evidence of professional indemnity insurance to underpin the provider's obligations.
What to Include in Your Professional Services Contract (UK)
Professional Standard of Care and Duty of Care -- The contract must define the professional standard to which services are to be performed. This typically requires the provider to exercise the standard of skill, care, and diligence expected of a reasonably competent professional in the relevant discipline, consistent with Section 13 of the Supply of Goods and Services Act 1982 and the Bolam test. Include an express warranty that the provider's personnel possess the necessary qualifications and experience. Address the provider's obligation to comply with all applicable professional codes of conduct and regulatory requirements.
Professional Indemnity Insurance -- Require the provider to maintain professional indemnity insurance throughout the engagement and for a run-off period of at least 6 years (matching the standard limitation period under the Limitation Act 1980). Specify the minimum level of cover in pounds sterling, require evidence of insurance upon request, and include an obligation to notify the client if cover is cancelled or materially reduced.
Limitation of Liability -- Cap each party's aggregate liability at a commercially reasonable level, typically linked to the fees payable or the PI insurance cover. The cap must satisfy the reasonableness test under Section 11 of the Unfair Contract Terms Act 1977. Always include mandatory carve-outs: no exclusion of liability for death or personal injury caused by negligence (Section 2(1) UCTA), fraud, or fraudulent misrepresentation. Exclude indirect and consequential losses, while acknowledging that the courts may interpret 'direct' versus 'indirect' loss narrowly.
Fees, Payment, and Late Payment Interest -- Specify the fee structure (fixed fee, hourly rate, daily rate, or retainer) in pounds sterling, invoicing procedures, and payment terms. Reference the Late Payment of Commercial Debts (Interest) Act 1998 to confirm the provider's right to statutory interest at 8% above the Bank of England base rate, plus fixed compensation charges and reasonable recovery costs.
Intellectual Property -- Determine whether IP in Deliverables vests in the client (requiring a written assignment under the Copyright, Designs and Patents Act 1988) or remains with the provider (with a licence to the client). Address Background IP separately and include a warranty that work product does not infringe third-party rights.
Data Protection -- Where the provider processes personal data, include provisions complying with Article 28 of the UK GDPR and the Data Protection Act 2018, covering processing instructions, security measures, breach notification, and data deletion on termination.
Termination and Survival -- Specify notice periods for termination for convenience and immediate termination for material breach, insolvency, or professional misconduct. Identify which provisions survive termination, particularly insurance run-off, confidentiality, limitation of liability, and IP.
Governing Law -- State that the Agreement is governed by the laws of England and Wales with exclusive jurisdiction in the courts of England and Wales.
Additional compliance elements for a Professional Services Contract (UK) used in United Kingdom include: Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Forms-legal.com provides this template as a starting point for United Kingdom-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Professional Services Contract (UK) (United Kingdom) [Legal document template]. Forms Legal. https://forms-legal.com/uk/business/contracts/professional-services-contract-uk
"Professional Services Contract (UK) (United Kingdom)." Forms Legal, 2026, https://forms-legal.com/uk/business/contracts/professional-services-contract-uk.
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title = {Professional Services Contract (UK) (United Kingdom)},
year = {2026},
howpublished = {\url{https://forms-legal.com/uk/business/contracts/professional-services-contract-uk}},
note = {Free legal document template. Based on Companies Act 2006}
}Also available for these jurisdictions:
Frequently Asked Questions
Under English law, a professional services provider owes a duty of care to the client in both contract and tort. In contract, Section 13 of the Supply of Goods and Services Act 1982 implies a term that the provider will carry out the services with reasonable care and skill. The professional standard is higher than the general standard: a provider must exercise the degree of skill, care, and diligence that would be expected of a reasonably competent professional in the same field. This standard was articulated in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 and has been applied across professional disciplines. In tort, the duty arises under the principles established in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, which recognised a duty of care in respect of negligent misstatement where there is a special relationship of reliance. Professional service providers including accountants, architects, engineers, surveyors, and consultants may therefore be liable for losses caused by negligent advice or work product even where the loss is purely economic, provided the client reasonably relied on the provider's professional skill and judgment.
Professional indemnity (PI) insurance protects the provider against claims for loss or damage arising from acts of negligence, errors, or omissions in the delivery of professional services. For many regulated professions in England and Wales, PI insurance is a mandatory requirement imposed by the relevant professional body or regulator. For example, solicitors must hold PI insurance as required by the SRA Indemnity Insurance Rules, and chartered accountants are required to hold PI cover by ICAEW regulations. Even where not legally mandatory, PI insurance is considered best practice for all professional service providers, as a single negligence claim can exceed the provider's personal assets or company reserves. A well-drafted professional services contract should require the provider to maintain PI insurance throughout the engagement and for a specified run-off period (commonly 6 years, reflecting the limitation period for breach of contract under the Limitation Act 1980), and to provide evidence of cover upon request.
The Unfair Contract Terms Act 1977 (UCTA) imposes significant constraints on the ability of professional services providers to limit or exclude their liability. Under Section 2(1), liability for death or personal injury caused by negligence cannot be excluded or restricted by any contract term. Under Section 2(2), liability for other types of loss (including economic loss) caused by negligence can only be excluded or restricted by a contract term that satisfies the reasonableness test set out in Section 11. The reasonableness test considers factors including the relative bargaining strength of the parties, whether the client received an inducement to agree to the term, whether the client knew or ought to have known of the term, and the availability and cost of insurance cover. Schedule 2 of UCTA provides further guidelines for assessing reasonableness. In the context of professional services, courts will examine whether the liability cap bears a reasonable relationship to the fees charged, the provider's insurance cover, and the potential scale of loss. A liability cap set significantly below the fees payable may be struck down as unreasonable.
The Supply of Goods and Services Act 1982 (SGSA) and the Consumer Rights Act 2015 (CRA) both imply terms into contracts for services, but they apply to different types of relationship. The SGSA applies to business-to-business (B2B) contracts for services. Section 13 implies a term that the supplier will carry out the service with reasonable care and skill, Section 14 implies a term that the service will be performed within a reasonable time where no time is fixed, and Section 15 implies a term that the client will pay a reasonable charge where no price is fixed. Between businesses, these implied terms can be excluded or restricted subject to the reasonableness test under the Unfair Contract Terms Act 1977. The CRA applies where the provider supplies services to a consumer (an individual acting outside their trade, business, craft, or profession). Section 49 of the CRA implies a term that the service will be performed with reasonable care and skill. Section 50 implies a term that information said or written by the provider is binding where the consumer relies on it. Sections 54 to 56 give consumers the right to require repeat performance or receive a price reduction where the service does not conform to contract. These consumer rights cannot be excluded or restricted by any contract term.
Under the Limitation Act 1980, the standard limitation period for breach of contract claims is 6 years from the date of breach (Section 5). For claims in tort (including professional negligence), the limitation period is 6 years from the date on which the cause of action accrued (Section 2), which is typically the date on which the damage occurred. However, where the damage is latent and not reasonably discoverable at the time it occurred, Section 14A of the Limitation Act 1980 provides an alternative 3-year limitation period running from the date on which the claimant first knew or ought to have known of the damage. There is a longstop date of 15 years from the date of the negligent act or omission under Section 14B. For contracts executed as deeds (rather than simple contracts), the limitation period is 12 years under Section 8. Professional services contracts should address the limitation period expressly, particularly in relation to professional indemnity insurance run-off cover, which should be maintained for at least the duration of the applicable limitation period.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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