Contract

What is a contract?

A contract is a formal agreement that creates legal obligations. When you sign a contract with a client, both parties are committing to specific terms—what work will be done, when, for how much, and under what conditions. Contracts protect both you and your clients by putting expectations in writing.

For contractors and service providers, contracts are essential protection against misunderstandings, scope creep, and payment disputes.

Key elements of a service contract

A solid contract typically includes:

• Scope of work — Exactly what services or products will be delivered
• Timeline — Start date, milestones, and completion date
• Payment terms — Total amount, payment schedule, accepted methods
• Change orders — How changes to the scope will be handled and priced
• Cancellation terms — Conditions for either party to end the agreement
• Liability and warranties — Who's responsible for what, and for how long

Contract vs. estimate vs. quote

An estimate is an approximation of costs. A quote is a fixed price offer. A contract is the binding agreement that formalizes the arrangement. Many contractors use quotes or estimates to win work, then create a contract before starting.