Personal services contract
A personal services contract is an agreement for services that depend on the skill, talent or judgment of one specific person, such as a performer, an athlete, a surgeon or a consultant. Because the person matters, the contract usually cannot be assigned to someone else, and a court will not force the person to perform it.
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Sample Personal services contract clauses
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Ally Auto Assets LLC“Significant Personal Services Contract” means a contract where the fees and other compensation received by a person pursuant to personal services contract(s) with Ally Bank and any of its Subsidiaries exceeded or would exceed 5% of such person’s gross revenues during the last calendar year.
ASSIGNMENT. This Agreement is a personal services contract for Mr. Ayers’s Services, and, therefore, you may not assign your rights or transfer or delegate your duties or obligations hereunder without the prior written consent of the Company, which consent the Company is entitled to grant or refuse in its sole discretion. Any assignment in violation of the foregoing shall be deemed null and void. The Company may freely assign its rights and obligations under this Agreement at any time. Subject to the limits on assignment stated above, this Agreement will inure to the benefit of, be binding on, and be enforceable against each of the Parties hereto and their respective successors and assigns.
A person shall be deemed to have “significant personal services contract(s) with the Corporation or its subsidiaries” if the fees and other compensation received by the person pursuant to personal services contract(s) with the Corporation or its subsidiaries exceeded or would exceed five percent (5%) of his gross revenues during the last calendar year.
Assignment. It is agreed that Bank shall have the right to assign this Agreement to any purchaser of the business of or substantially all of the assets of Bank. This is a personal services contract, and may not be assigned by Executive.
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CEN BIOTECH INCThis Agreement is in the nature of a personal services contract and the duties assigned to Employee hereunder are non-delegable. Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder will not be assignable, transferable or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by the Executive’s will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 8(c), the Company will have no liability to pay any amount so attempted to be assigned, transferred or delegated.
This is not to be construed or interpreted to establish any degree of Government control that is inconsistent with a non-personal services contract.
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KALTURA INC (KLTR)The Executive’s duties shall be in the nature of management duties that demand a special level of loyalty and accordingly the Law of Work Hours and Rest 5711 - 1951 shall not apply to this Agreement. The parties hereto confirm that this is a personal services contract and that the relationship between the parties hereto shall not be subject to any general or special collective employment agreement or any custom or practice of the Company in respect of any of its other employees or contractors.
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Eventbrite, Inc. (EB)Although this Agreement is executed solely with Advisor, it is not a personal services contract.
This Agreement is a personal services contract which may not be assigned by Arrow or the Bank to, or assumed from Arrow or the Bank by, any other party without the prior consent of the Executive.
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SmartRent, Inc. (SMRT)Notwithstanding the foregoing, this Agreement is a personal services contract and, as such, you may not assign any of your duties or obligations hereunder.
The parties hereto confirm that this is a personal services contract and that the relationship between the parties hereto shall not be subject to any general or special collective employment agreement or any industry custom or practice, or practice of Company in respect of any of its other employees or contractors. Employee agrees that the execution and delivery by Employee of this Agreement and the fulfillment of the terms hereof (i) does not conflict with any agreement or undertaking by which Employee is bound; and (ii) does not require the consent of any person or entity.
Except as otherwise provided in an Award Agreement, any Award, or portion thereof, under this Plan, whether or not vested, made to a Grantee who is discharged from the employ of the Company or any of its subsidiaries (or whose personal services contract is terminated in the case of a consultant or independent contractor) for Cause may be automatically terminated, or rescinded and revoked by determination of the Committee.
“Personal Services Contract” means any written contract or agreement pursuant to which a corporation, partnership, limited liability company or other entity is to provide to the Company or a Subsidiary the services of one or more individuals.
“Personal Service Corporation” means a corporation, partnership, limited liability company or other entity that has a Personal Services Contract in effect.
What is a personal services contract?
A personal services contract is a contract for work that depends on who does it: the skill, talent, reputation or judgment of one specific person. A singer booked for a concert, a football player signed to a club, a surgeon hired for an operation and a consultant chosen for their expertise all sign personal services contracts. Someone else doing the same job would not be the same performance.
That focus on the person has legal effects. The person cannot hand the work to someone else, the contract usually ends if they die or become unable to perform, and courts will not order them to perform it.
Examples of personal services contracts
- Entertainment: recording, acting, booking and performance agreements
- Sports: player contracts and coaching agreements
- Professional services: consulting, legal, medical and design work by a named person
- Creative work: commissioned art, photography, ghostwriting
- Executive employment: contracts with a specific CEO or key person
- Caregiving: personal care agreements in which a family member is paid to care for an older relative
Key rules for personal services contracts
| Rule | What it means |
|---|---|
| No assignment or delegation | The person cannot pass the work to someone else without consent, because the other side bargained for them specifically |
| No specific performance | Courts will not force someone to perform personal services (Restatement (Second) of Contracts § 367). The remedy is damages |
| Negative injunctions | A court may stop the person from working for a competitor during the term, as in the English case Lumley v. Wagner (1852), where an opera singer was barred from singing at a rival theater |
| Death or incapacity ends it | If the person dies or cannot perform, the contract is usually discharged rather than breached (Restatement (Second) of Contracts § 262) |
Personal services contracts in government and Medicaid planning
The term has two special meanings that drive many searches:
- US federal government: under FAR 37.104, a personal services contract is one that makes contractor staff look like government employees, supervised directly by government officials. Agencies may only award one if a statute allows it.
- Medicaid planning: a personal services contract (or caregiver agreement) lets a family member be paid for care so that the payments are not treated as gifts when Medicaid eligibility is assessed. It generally has to be written before the care starts, pay fair market rates and describe the services, and the rules vary by state.
How to write a personal services contract
- Name the person, not just the company, and say that the services must be performed by them personally.
- Describe the services and any exclusivity during the term.
- Set the term and pay, including what happens if the person cannot perform because of illness.
- Restrict assignment and subcontracting without written consent.
- Add a non-compete or exclusivity clause for the term if you need protection from competitors, since you cannot force performance.
- Cover ownership of anything the person creates.
Personal services clause example
Sample clause: Personal services
Add this clause to a contract, send it and get it signed in fynk.
Use it in fynk for freeHow to manage personal services contracts
Personal services contracts carry dates that matter: the end of an exclusivity period, an option to extend, a non-compete that runs past the term. In fynk, these dates are fields in the contract, so the contract calendar and reminders flag them before they pass. Talent, consulting and player agreements can be built from templates with the personal services wording already approved, and signed electronically wherever the person is.
Which templates contain personal services terms?
These free templates already tie the work to a specific person:
Free templates with this clause
Recording artist agreement templateThe artist provides exclusive recording services to the company for the whole term.
Use the free template
Booking agreement template for professional wrestlingThe wrestler may not assign, transfer or delegate the agreement, while the promoter may assign it.
Use the free template
Independent contractor agreement templateThe contractor may only subcontract or assign the agreement with the company's written consent.
Use the free template
Related clauses
- Independent contractor An independent contractor clause establishes the relationship between the parties, specifying that the contractor is not an employee and will work independently, managing their own schedule and methods of completing the work. This clause typically outlines the responsibilities of the contractor, their lack of entitlement to employee benefits, and their obligation to pay their own taxes.
- No assignment The "No Assignment" clause prohibits either party in a contract from transferring their rights or obligations under the agreement to a third party without prior written consent from the other party. This clause helps maintain the original parties' control over the contractual relationship and ensures that any changes to involved parties are mutually agreed upon.
- Independent contractor relationship An independent contractor relationship clause defines the working relationship between parties, specifying that the contractor operates autonomously and is not an employee of the hiring party. This clause clarifies that the contractor is responsible for their own taxes, insurance, and adherence to laws, and it delineates the absence of benefits typically associated with employment.
- Personal guarantees A personal guarantee is a contractual promise made by an individual, typically a business owner or executive, to assume responsibility for a debt or obligation if the primary borrower defaults. This clause is often used to provide lenders or creditors with additional assurance of repayment, thereby reducing their risk when extending credit or loans.
Frequently asked questions
Not without the other party's consent. The person performing the services was chosen for their own skills, so they cannot pass the work to someone else.
No. Courts will not order specific performance of personal services. The other side can claim damages, and in some cases a court will stop the person from working for a competitor during the contract term.
The same as any contract: offer, acceptance, consideration, capacity and a lawful purpose. For Medicaid caregiver agreements and US government contracts, extra rules apply, such as a written agreement before services start or statutory authority to contract.
Not necessarily. Employment contracts are often personal services contracts, but so are many contracts with independent contractors, performers and consultants. What makes it personal is that one specific person must do the work.
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