Computer Services Agreement (UK)
Updated 23 July 2026
COMPUTER SERVICES AGREEMENT
Governed by the law of England and Wales
Note: This template is for use between two businesses for the supply of computer or technology-related services: software development, IT support, hosting, integration, managed services, or similar. Complete every yellow field, choose one Option in each Option block and delete the others, and complete Schedule 1 once all choices are made. Schedule 3 only applies if the Contractor will handle personal data on the Client's behalf.
0. PARTIES
This Computer Services Agreement (the "Agreement") is made on [effective date] between:
(1) [full legal name of the client], a company incorporated in England and Wales with company number [company number of the client] whose registered office is at [registered office address of the client] (the "Client"); and
(2) [full legal name of the contractor], [contractor entity description (e.g. a company incorporated in england and wales with company number [number], or a sole trader trading as [trading name])] whose registered or principal address is at [registered or principal address of the contractor] (the "Contractor").
Each a "Party" and together the "Parties".
Note: If the Contractor is an individual or a personal service company, see Clause 10 (Independent Contractor and Tax). The way the engagement actually operates (who controls hours, location, methods, and substitution) affects tax status under the off-payroll working rules and the worker / employee tests, regardless of what this Agreement says.
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the following words have the following meanings:
"Agreement" this document and its Schedules.
"Background IPR" Intellectual Property Rights owned or licensed by a Party that exist before the Effective Date or that are created independently of this Agreement.
"Business Day" any day other than a Saturday, Sunday, or public holiday in England and Wales.
"Charges" the fees and other amounts payable by the Client to the Contractor as set out in Schedule 1 and Schedule 2.
"Confidential Information" any non-public information disclosed by one Party to the other (in any form) that is marked confidential or that a reasonable person would understand to be confidential given its nature or the circumstances of disclosure.
"Deliverables" the work product, software, code, designs, documentation, reports, and other materials created by the Contractor specifically for the Client in performing the Services, as identified in Schedule 2.
"Effective Date" the date stated at the top of this Agreement.
"Foreground IPR" Intellectual Property Rights created by the Contractor (alone or with others) in the Deliverables in performing the Services.
"Initial Term" the period set out in Schedule 1 starting on the Effective Date.
"Intellectual Property Rights" all patents, copyrights, database rights, trade marks, design rights, rights in confidential information and trade secrets, domain names, and all other intellectual property rights, registered or unregistered, anywhere in the world.
"Personal Data" has the meaning given to it in the United Kingdom General Data Protection Regulation ("UK GDPR") and the Data Protection Act 2018 ("DPA 2018").
"Services" the computer services described in Schedule 2.
"Term" the Initial Term and any agreed renewal periods.
1.2 In this Agreement: (a) references to "writing" include email; (b) "including" means including without limitation; (c) headings are for convenience only and do not affect interpretation; (d) a reference to a Party includes its permitted successors and assignees; (e) a reference to a statute or statutory instrument is to that statute or instrument as amended or replaced from time to time.
2. SERVICES AND SCOPE CHANGES
2.1 Appointment. The Client appoints the Contractor to provide the Services and the Contractor accepts the appointment, on the terms of this Agreement.
2.2 Performance standards. The Contractor shall: (a) perform the Services with reasonable skill and care, in accordance with good industry practice; (b) allocate suitably qualified personnel and sufficient resources to meet any timelines and milestones in Schedule 2; (c) comply with all laws and regulations applicable to its performance of the Services; and (d) tell the Client promptly about anything likely to affect its ability to deliver the Services on time or to the agreed standard.
2.3 Client cooperation. The Client shall: (a) give the Contractor timely access to the information, systems, personnel, and materials reasonably needed to perform the Services; (b) make decisions and give approvals within the timescales set out in Schedule 2 (or, if none, within a reasonable time); and (c) ensure that information it provides to the Contractor is accurate and complete.
2.4 Subcontracting. The Contractor shall not subcontract any material part of the Services without the Client's prior written consent. Where consent is given, the Contractor shall ensure each subcontractor is bound by terms at least as protective as those in this Agreement and remains responsible to the Client for the acts and omissions of any subcontractor as if they were its own.
2.5 Scope Changes. Either Party may propose a change to the scope, deliverables, or timetable of the Services (a "Scope Change") by submitting a written Scope Change request. The Contractor shall provide a written impact assessment (cost, timing, resource) within [scope change estimate response period (business days)] Business Days after receipt. A Scope Change becomes binding only when both Parties sign a written Scope Change order. The Contractor shall continue performing the existing Services while a Scope Change request is being assessed unless the Parties agree otherwise.
3. CHARGES AND PAYMENT
3.1 Charges. The Client shall pay the Charges in the amounts and at the frequency set out in Schedule 1 and Schedule 2. All Charges are exclusive of VAT, which the Contractor shall add to invoices at the prevailing rate where applicable.
3.2 Invoices. The Contractor shall issue invoices in accordance with Schedule 1. Each invoice shall include enough detail for the Client to verify what is being charged. The Client shall pay each undisputed valid invoice within [payment period (days)] days of receipt.
3.3 Disputed invoices. If the Client disputes an invoice in good faith, it shall notify the Contractor in writing within [disputed invoice notice period (business days)] Business Days of receipt giving reasons, pay any undisputed portion by the due date, and work with the Contractor to resolve the dispute promptly.
3.4 Late payment interest. If the Client fails to pay an undisputed invoice by the due date, interest accrues on the overdue amount as follows.
Note: Use either Option A or Option B.
Note: Use Option A where the Contractor wants the contractual rate to be explicit and to apply automatically without invoking statutory mechanics. Use Option B where the Parties prefer to rely on the existing statutory right that applies by default to commercial debts: it is shorter and avoids any argument about whether the contractual rate displaces the statutory remedy.
Option A: Interest accrues on overdue amounts at [late payment interest rate (e.g. 8)]% per annum above the Bank of England official dealing rate (Bank Rate), accruing daily from the due date until paid in full and compounding annually.
Option B: The Contractor may claim statutory interest, statutory compensation, and reasonable recovery costs on the overdue amount in accordance with the Late Payment of Commercial Debts (Interest) Act 1998.
Note: UK law gives a business supplier an automatic right to claim statutory interest on overdue commercial invoices at 8% per annum above the Bank of England official dealing rate (the rate is fixed by reference to the official dealing rate in force on the preceding 30 June or 31 December and runs for the following six months, so it does not float daily). A fixed compensation amount of £40 to £100 (depending on the size of the debt) and reasonable recovery costs are also recoverable. These rights apply by default; the contract does not need to mention them, but a contractual rate can be agreed if it provides a substantial remedy.
3.5 Expenses. The Client shall reimburse the Contractor for reasonable, pre-approved out-of-pocket expenses incurred in performing the Services, supported by receipts.
4. INTELLECTUAL PROPERTY
4.1 Background IPR. Each Party retains ownership of its Background IPR. Each Party grants the other a non-exclusive, royalty-free licence to use its Background IPR only to the extent necessary (a) for the Contractor to perform the Services, or (b) for the Client to use the Deliverables as contemplated by this Agreement.
4.2 Foreground IPR - choose one option.
Note: Use either Option A or Option B.
Note: Use Option A where the Contractor is supplying a product, platform, or framework it intends to reuse for other clients: the Client gets full rights to use the Deliverables but does not own them, and the Contractor can keep building on its own work. Use Option B where the Client is paying for bespoke work and needs to own and freely commercialise the output: the Contractor cannot reuse the work for other clients without the Client's permission. Under Option B the assignment takes effect when the Charges for the relevant Deliverables are paid in full: until payment, ownership stays with the Contractor.
Note: Default position: under English law an independent contractor (not an employee) is the first owner of copyright in the work it creates, even if the work was commissioned and paid for. Without a written, signed assignment (Option B) or an adequately scoped licence (Option A), the Client has no guaranteed right to use, copy, modify, or commercialise the Deliverables. A copyright assignment must be in writing signed by the assignor to take effect.
Option A: The Contractor retains ownership of all Foreground IPR. On payment in full of the Charges due for the relevant Deliverables, the Contractor grants the Client a non-exclusive, perpetual, irrevocable, royalty-free, worldwide licence to use, copy, and modify the Deliverables for the Client's [scope of client's use licence (e.g. internal business purposes)]. The Contractor may continue to use the Foreground IPR for its own business and for other clients.
Option B: Upon receipt in full of the Charges due for the relevant Deliverables, the Contractor assigns to the Client, with full title guarantee, all right, title, and interest in and to the Foreground IPR in those Deliverables. The Contractor waives, and shall procure that its personnel and subcontractors waive, all moral rights in the Deliverables to the fullest extent permitted by law. The Contractor grants the Client an irrevocable, royalty-free, perpetual, worldwide licence to use any Background IPR embedded in the Deliverables to the extent necessary for the Client to use, modify, and commercialise the Deliverables.
4.3 Further assurance. The Contractor shall, on the Client's request and at the Client's reasonable cost, sign any document and do any act reasonably necessary to give full effect to this Clause 4 (including any document required to perfect any assignment of registered or registrable rights).
4.4 IPR warranty. The Contractor warrants that (a) it has the right to grant the rights described in this Clause 4; and (b) the Deliverables, when used as authorised by this Agreement, will not infringe any third party's Intellectual Property Rights. The Contractor shall promptly notify the Client of any third-party claim of infringement and the Parties shall cooperate in good faith to address it.
4.5 IPR indemnity. The Contractor shall indemnify the Client against all losses, damages, costs, and expenses (including reasonable legal costs) arising from any third-party claim that the Deliverables, when used as authorised by this Agreement, infringe that third party's Intellectual Property Rights. The Contractor has no liability under this Clause 4.5 to the extent a claim arises from (a) materials provided by the Client, (b) modification of the Deliverables by anyone other than the Contractor, or (c) use of the Deliverables in combination with items the Contractor did not supply or approve, where the claim would not have arisen without that modification or combination. The Client shall notify the Contractor promptly of any claim, allow the Contractor to conduct the defence and any settlement, and give reasonable assistance at the Contractor's cost. The Contractor may, at its own cost, procure the Client's right to continue using the affected Deliverable, or replace or modify it so that it no longer infringes, provided it performs materially the same function.
Note: An indemnity means the Contractor covers the Client's losses from third-party IP claims pound for pound, without the Client having to prove breach of contract. It sits outside the liability cap (Clause 8.1(c)). A Contractor may push to cap the indemnity (for example at 2x Charges); the exclusions in (a) to (c) are the standard counterweight and keep the risk with the Party who caused it.
Note: If the Contractor incorporates open-source software or AI-generated content into the Deliverables, the warranty in 4.4(b) requires care: open-source licences impose obligations (attribution, share-alike) and AI-generated content can carry uncertain provenance. Schedule 2 should list any third-party, open-source, or AI-generated components included in the Deliverables and any licence obligations attached to them.
5. CONFIDENTIALITY
5.1 Each Party shall keep the other Party's Confidential Information confidential, use it only to perform or benefit from this Agreement, and not disclose it to any third party except (a) to its employees, contractors, and professional advisers who need to know and are bound by equivalent confidentiality obligations, or (b) to the extent required by law, court order, or regulator (in which case the disclosing Party shall, where lawful, give the other Party prompt notice and cooperate to limit the scope of disclosure). The obligations in this Clause 5 do not apply to information that (i) is or becomes public through no breach of this Agreement, (ii) was already known to the recipient (with prior written records) before disclosure, (iii) is independently developed by the recipient without reference to the Confidential Information, or (iv) is received from a third party without obligation of confidence. The obligations in this Clause 5 survive termination or expiry for [confidentiality survival period (years)] years, save that they continue indefinitely in respect of information that constitutes a trade secret.
Note: Three years post-termination is the common position for ordinary commercial confidential information. Trade secrets (technical know-how, source code, customer lists with competitive value) need indefinite protection; the indefinite survival language in 5.1 covers that.
6. DATA PROTECTION
6.1 Each Party shall comply with all applicable data protection law, including the UK GDPR and the DPA 2018, in carrying out its obligations under this Agreement.
6.2 Processing of Client Personal Data - choose one option.
Note: Use either Option A or Option B.
Note: Use Option A where the Contractor will not access, store, transmit, or otherwise handle any Personal Data on the Client's behalf, for example infrastructure-only work that does not touch Client data, or a self-contained build delivered without Client data being shared. Use Option B where the Contractor will process Personal Data on the Client's instructions, for example hosting, support requiring access to Client systems, integration with Client databases, or any service involving Client customers' or employees' data.
Option A: The Contractor shall not access, receive, store, or otherwise process any Personal Data on the Client's behalf. If processing of Personal Data on the Client's behalf becomes necessary, the Parties shall sign Schedule 3 (or a separate written data processing agreement) before any such processing begins. Each Party remains independently responsible for its own data protection compliance.
Option B: Where the Contractor processes Personal Data on behalf of the Client, the Client is the controller and the Contractor is the processor. The Parties shall comply with Schedule 3 (Data Processing Terms), which forms part of this Agreement and contains the Article 28 UK GDPR processor terms.
Note: UK data protection law requires a written data processing agreement covering eight specific items (instructions, confidentiality, security, sub-processors, data-subject rights, controller assistance, deletion or return on termination, and audits) before any processing on the Client's behalf begins. Without those terms in place, both Parties are exposed to enforcement action: the regulator can impose substantial fines (the higher tier is 4% of worldwide annual turnover or £17.5 million, whichever is greater).
7. WARRANTIES
7.1 Mutual. Each Party warrants that it has full authority to enter into and perform this Agreement.
7.2 Contractor. The Contractor warrants that (a) it will perform the Services with reasonable skill and care using suitably qualified personnel; (b) the Deliverables will, at the time of delivery, materially conform to any specification set out in Schedule 2; (c) the Services and Deliverables will not, to the Contractor's knowledge, breach any applicable law; and (d) it has all licences, consents, and permissions required to provide the Services.
7.3 Client. The Client warrants that any data, content, or materials it provides to the Contractor for use in the Services do not infringe any third party's rights.
7.4 Warranty remedy - choose one option.
Note: Use either Option A or Option B.
Note: Use Option A to limit the Contractor's exposure on warranty claims to re-performance or a refund, typical for fixed-fee SME engagements where the Contractor wants predictable risk. Use Option B where the Client needs broader protection because the Deliverables are mission-critical and a defect could cause significant downstream loss: the Client can claim damages in addition, subject to the cap in Clause 8.
Option A: If the Contractor breaches the warranty in Clause 7.2(b), the Client's sole remedy is for the Contractor to re-perform the relevant part of the Services or, at the Contractor's election, to issue a proportionate refund of the Charges paid for the non-conforming Deliverable.
Option B: If the Contractor breaches any warranty in Clause 7.2, the Client may require re-performance or a proportionate refund and may also claim damages, subject to Clause 8.
7.5 Exclusion. Except as expressly set out in this Agreement, all other warranties, conditions, and representations (whether express, implied, statutory, or otherwise) are excluded to the fullest extent permitted by law.
Note: Some implied terms cannot be excluded under English law, for example the implied term that services will be performed with reasonable care and skill. Even between businesses, broadly worded exclusion clauses are subject to a reasonableness test and may be cut down by the court if found unreasonable in context. The wording in 7.5 is qualified accordingly.
8. LIMITATION OF LIABILITY
8.1 Uncapped liabilities. Nothing in this Agreement limits or excludes either Party's liability for: (a) death or personal injury caused by its negligence; (b) fraud or fraudulent misrepresentation; (c) the Contractor's indemnification or assignment obligations under Clause 4; (d) breach of confidentiality under Clause 5; (e) breach of data protection obligations under Clause 6 and Schedule 3; or (f) any other liability that cannot lawfully be limited or excluded.
Note: Items (a) and (b) are mandatory under English law: they cannot be excluded. Items (c) to (e) are common Contractor-side carve-outs in UK SME services agreements: they sit outside the cap because IP infringement claims, confidentiality breaches, and data protection breaches can produce losses far exceeding the contract value. Negotiation point: a Contractor may push to remove or sub-cap items (c) to (e) (for example, capping IP indemnity at 2x Charges and data breach liability at a separate fixed amount). Adjust to reflect what the Parties actually agree.
8.2 Excluded losses. Subject to Clause 8.1, neither Party is liable for: (a) loss of profit or revenue; (b) loss of business or contracts; (c) loss of anticipated savings; (d) loss of goodwill; (e) loss or corruption of data, save where the Contractor is engaged under this Agreement to store or back up that data; or (f) any indirect or consequential loss.
8.3 Cap on liability - choose one option.
Note: Use either Option A or Option B.
Note: Use Option A for most ongoing services engagements: the cap scales with contract value and is the market default for UK SME services agreements (typically 1x annual fees, sometimes 2x for higher-risk work). Use Option B where the Parties want a fixed, agreed maximum from day one, sensible for short engagements where 12 months of fees would be too low to give the Client meaningful protection, or where the Contractor wants certainty about its insurance position.
Note: UK courts will not enforce limitation clauses that are unreasonable in context. A cap that bears some relationship to fees and insurable risk is much more likely to stand than a token figure. Whichever Option is chosen, the carve-outs in Clause 8.1 always sit outside the cap.
Option A: Subject to Clause 8.1, each Party's total aggregate liability under or in connection with this Agreement (whether in contract, tort including negligence, misrepresentation, breach of statutory duty, or otherwise) shall not exceed the Charges paid or payable by the Client to the Contractor in the twelve (12) months immediately before the event giving rise to the claim, save that this cap does not apply to the Client's obligation to pay undisputed Charges properly invoiced under this Agreement.
Option B: Subject to Clause 8.1, each Party's total aggregate liability under or in connection with this Agreement (whether in contract, tort including negligence, misrepresentation, breach of statutory duty, or otherwise) shall not exceed £[fixed liability cap amount in gbp], save that this cap does not apply to the Client's obligation to pay undisputed Charges properly invoiced under this Agreement.
9. TERM AND TERMINATION
9.1 Term. This Agreement starts on the Effective Date and continues for the Initial Term, unless terminated earlier in accordance with this Clause 9. At the end of the Initial Term it expires automatically unless the Parties agree in writing to renew.
9.2 Termination for cause. Without affecting any other right or remedy available to it, either Party may terminate this Agreement with immediate effect by written notice if the other Party: (a) commits a material breach that is incapable of remedy; (b) commits a material breach that is capable of remedy and fails to remedy it within [breach remedy period (business days)] Business Days after written notice requiring it to do so; or (c) suffers an Insolvency Event, to the extent termination on that ground is permitted by applicable law.
Note: The two termination routes work differently in an insolvency. The Client can always terminate if the Contractor suffers an Insolvency Event. The Contractor's mirror right is restricted by law: section 233B of the Insolvency Act 1986 makes a clause allowing a supplier to terminate because its customer has entered administration, liquidation, a CVA, or a similar corporate insolvency procedure ineffective while the procedure is ongoing. Termination rights that accrued before the procedure (for example for unpaid invoices) are also suspended, and continued service cannot be made conditional on paying those arrears. The Contractor can still terminate with the consent of the office-holder or the company (depending on the procedure), with the court's permission on hardship grounds, or for new defaults arising after the procedure begins. The Contractor's practical protection is frequent invoicing and acting on payment default early under Clause 9.2(b), before arrears build up.
9.3 Insolvency Event. An "Insolvency Event" means in relation to a Party (so far as applicable to that Party's legal form): (a) it is, or is deemed to be, unable to pay its debts as they fall due; (b) it ceases or threatens to cease carrying on all or a substantial part of its business; (c) (if a company or LLP) it enters into administration, receivership, liquidation (other than for a solvent reconstruction), a company voluntary arrangement, a scheme of arrangement, or a restructuring plan; or (d) (if an individual or sole trader) a bankruptcy petition is presented or a bankruptcy order is made against it, or it enters into an individual voluntary arrangement.
Note: The insolvency triggers cover both companies and individuals, so the clause works whether the Contractor is a limited company, an LLP, or a sole trader. The cash-flow test applies to both forms but the procedural triggers differ.
9.4 Termination for convenience - choose one option.
Note: Use either Option A, Option B, or Option C.
Note: Use Option A for ongoing service relationships where flexibility matters to both sides (equal exit rights, balanced position). Use Option B where the Contractor needs revenue certainty for its initial commitment: the Client can still exit early but pays for doing so. Use Option C where both Parties want certainty for the Initial Term and can only exit for cause during it: neither Party has a unilateral exit until the Initial Term ends.
Option A: Either Party may terminate this Agreement for any reason by giving [termination for convenience notice period (days)] days' written notice to the other, including during the Initial Term.
Option B: The Client may terminate this Agreement for any reason by giving [termination for convenience notice period (days)] days' written notice to the Contractor. If the Client terminates during the Initial Term, it shall pay an early termination fee of [early termination fee (description, e.g. £[amount] or Charges that would have fallen due in the remainder of the Initial Term)] within [early termination fee payment period (days)] days of the termination date. The Contractor may not terminate this Agreement for convenience.
Option C: Neither Party may terminate this Agreement for convenience during the Initial Term. After the Initial Term, either Party may terminate for any reason by giving [termination for convenience notice period (days)] days' written notice to the other.
9.5 Consequences of termination. On termination or expiry of this Agreement (or earlier on the Client's request):
(a) the Client shall pay all Charges accrued up to the termination date, including [work in progress percentage (e.g. 50)]% of the Charges attributable to work in progress at the termination date;
(b) the Contractor shall promptly deliver to the Client all Deliverables (whether complete or not) and all property belonging to the Client in its possession or control;
(c) the Contractor shall return to the Client (or, at the Client's election, irretrievably destroy) all Confidential Information of the Client (including all copies in any medium) and all Personal Data of the Client, except to the extent retention is required by law;
(d) the Contractor shall revoke or transfer all access the Contractor (and any of its personnel or subcontractors) has to the Client's systems, accounts, credentials, shared drives, repositories, and communication channels; and
(e) the Contractor shall, on the Client's written request, certify in writing that it has complied with paragraphs (b) to (d).
9.6 Exit and transition assistance. On notice of termination or expiry of this Agreement, the Contractor shall, at the Client's request and for up to [transition assistance period (days, e.g. 30)] days after the termination date, provide reasonable assistance to enable the orderly transfer of the Services to the Client or a replacement supplier, including exporting Client data in a portable, machine-readable format, handing over documentation on configurations and dependencies, and cooperating with any replacement supplier. Transition assistance is charged at the rates in Schedule 2 (or, if none, the Contractor's reasonable standard rates), except that it is provided at no additional charge where the Client terminates for the Contractor's material breach.
Note: This matters where the Services include hosting, infrastructure, or managed services: without an express obligation the Contractor has no duty to help the Client move away, and access can simply stop at termination. The assistance is paid for at Schedule 2 rates so it does not become an open-ended free workstream.
9.7 Survival. Termination or expiry does not affect any rights, remedies, or obligations that have already accrued, and nothing in this Clause 9 limits either Party's rights and remedies at law, including the right to treat this Agreement as at an end for the other Party's repudiatory breach. Clauses 1, 3 (to the extent of accrued payment obligations), 4 (to the extent necessary to give effect to surviving licences, assignments, and indemnities), 5, 6, 8, 9.5, 9.6, 9.7, 11.1 (to the extent of the run-off cover), 12 (where in force), and 13 survive termination or expiry of this Agreement.
10. INDEPENDENT CONTRACTOR AND TAX
10.1 Status. The Contractor is engaged as an independent contractor. Nothing in this Agreement creates a partnership, joint venture, agency, employment, or worker relationship between the Parties or between the Client and any of the Contractor's personnel.
10.2 Tax. The Contractor is responsible for accounting to HM Revenue & Customs for all tax and national insurance contributions in respect of payments made under this Agreement, except where the off-payroll working rules require the Client (or another party in the contracting chain) to operate PAYE on those payments.
10.3 Off-payroll cooperation. Where the off-payroll working rules apply to this engagement, the Parties shall cooperate in good faith (including by sharing information about working practices and the contracting chain) so that the Client (or the relevant deemed employer) can issue a Status Determination Statement, take reasonable care in reaching its conclusion, operate the statutory client-led status disagreement process, and (if the determination is "inside") deduct PAYE and national insurance lawfully from payments. Lawful statutory deductions do not breach Clause 3. Each Party shall promptly notify the other of any material change in working practices or contracting chain that may affect the status determination.
Note: The off-payroll working rules (commonly called IR35) apply where services are provided through an intermediary such as a personal service company. Where the Client is a public authority, or is medium or large in the private sector, the Client (not the Contractor) is responsible for issuing a Status Determination Statement and operating PAYE if the engagement is found to be "inside". A private-sector Client is currently treated as small (and so does not have these obligations) if it meets at least two of: turnover not more than £15 million, balance sheet total not more than £7.5 million, no more than 50 employees. Where a small Client is in scope, the intermediary handles tax status under the original IR35 regime. Confirm Client size before relying on this Clause; if the Client is medium or large, additional process will be needed.
11. INSURANCE
11.1 Cover. The Contractor shall maintain with a reputable insurer, throughout the Term and for 12 months after termination or expiry: (a) professional indemnity insurance of at least £[professional indemnity cover amount in gbp]; (b) public liability insurance of at least £[public liability cover amount in gbp]; and (c) where the Contractor processes Personal Data or hosts Client systems or data, cyber liability insurance of at least £[cyber liability cover amount in gbp].
11.2 Evidence. The Contractor shall provide certificates of insurance evidencing the required cover on the Client's request, and shall notify the Client promptly if any required cover lapses or is materially reduced.
Note: Insurance is what makes the liability cap in Clause 8 worth something: a cap is only as good as the Contractor's ability to pay. Professional indemnity cover of £1 million is a common minimum for small technology suppliers, and the 12-month run-off period protects against defects that surface after the engagement ends. Align the cap chosen in Clause 8.3 with the cover actually held.
12. EXCLUSIVITY [optional]
12.1 Exclusivity - choose one option.
Note: This Clause is optional. Include it only if the Parties have agreed a genuine exclusivity arrangement; delete the entire Clause and renumber if it does not apply. Exclusivity restrictions are only enforceable if they protect a legitimate business interest and are no broader than reasonably necessary: keep the scope, duration, and geography narrow.
Note: Use either Option A or Option B.
Note: Use Option A where the Contractor is making a significant investment to serve the Client and needs protection against being replaced mid-contract: the Client gives up the ability to use other suppliers for the same scope. Use Option B where the Client needs protection against the Contractor sharing expertise with direct competitors during the engagement.
Option A: During the Term, the Client shall not engage any third party to provide services that are the same as or substantially similar to the Services without the Contractor's prior written consent.
Option B: During the Term, the Contractor shall not provide services that are the same as or substantially similar to the Services to any business that directly competes with the Client in [exclusivity sector or territory], without the Client's prior written consent.
13. GENERAL PROVISIONS
13.1 Entire agreement. This Agreement (including its Schedules) is the entire agreement between the Parties about its subject matter and supersedes all earlier agreements, representations, and understandings on that subject matter. Each Party confirms it has not relied on any statement or representation not set out in this Agreement. Nothing in this Clause 13.1 limits or excludes liability for fraudulent misrepresentation.
Note: An entire agreement clause does not on its own prevent a claim for misrepresentation about something said before the contract was signed. The fraudulent misrepresentation carve-out in the last sentence is required by law (it cannot be excluded) and is included expressly. Other forms of misrepresentation can be limited but only if reasonable.
13.2 Variation. No variation of this Agreement is effective unless it is in writing and signed by an authorised representative of each Party.
13.3 Assignment and Novation. Neither Party may assign, novate, charge, subcontract, or otherwise transfer its rights or obligations under this Agreement without the other Party's prior written consent (not to be unreasonably withheld or delayed). Either Party may, on notice but without consent, assign the benefit of this Agreement to a group affiliate or to a successor as part of a transfer of the whole or substantially the whole of its business.
13.4 Waiver. A failure or delay by either Party to exercise any right or remedy under this Agreement is not a waiver of that right or remedy. A waiver of a particular breach is not a waiver of any later breach.
13.5 Severance. If any provision of this Agreement is or becomes invalid, illegal, or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal, and enforceable. If modification is not possible, the provision shall be deemed deleted. The rest of the Agreement shall continue in force.
13.6 Force majeure. Neither Party is liable for any failure or delay in performing its obligations (other than an obligation to pay money) to the extent caused by an event beyond its reasonable control, including natural disaster, fire, flood, epidemic, war, terrorism, civil unrest, industrial action affecting a third party, power or telecommunications failure, or failure of a third-party hosting or infrastructure provider (a "Force Majeure Event"). The affected Party shall promptly notify the other, use reasonable efforts to mitigate the effect, and resume performance as soon as reasonably possible. If a Force Majeure Event continues for more than [force majeure termination threshold (days, e.g. 60)] consecutive days, either Party may terminate this Agreement by written notice with immediate effect.
Note: Without this clause the Parties are left with the common law doctrine of frustration, which applies only where performance has become impossible or radically different, a much harder test than this clause sets. Charges for Services already performed remain payable.
13.7 Notices. Notices under this Agreement shall be in writing and delivered to the recipient's notice address set out in Schedule 1, by (a) email (deemed received on the next Business Day after sending, provided no bounce-back is received) or (b) first-class post or courier (deemed received two Business Days after posting in the case of post, or on delivery in the case of courier).
13.8 Third-party rights. No person other than a Party to this Agreement has any right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.
13.9 Counterparts. This Agreement may be signed in counterparts, including by electronic signature, each of which shall be an original and which together shall constitute one agreement.
13.10 Governing law. This Agreement, and any dispute or claim arising out of or in connection with it (whether contractual or non-contractual), is governed by the law of England and Wales.
13.11 Dispute resolution and jurisdiction. If a dispute arises out of or in connection with this Agreement, the Parties shall first attempt to resolve it through good-faith negotiation between senior representatives within [dispute escalation period (business days)] Business Days of one Party giving the other written notice of the dispute. If negotiation does not resolve the dispute, the Parties shall attempt to settle it by mediation under the CEDR Model Mediation Procedure, with the mediator nominated by CEDR if the Parties cannot agree one within 10 Business Days. If the dispute is not settled within 30 days of the mediation starting, or a Party refuses to take part in mediation, either Party may bring proceedings. The courts of England and Wales have exclusive jurisdiction over any dispute or claim arising out of or in connection with this Agreement (including non-contractual disputes). Nothing in this Clause 13.11 prevents either Party seeking urgent injunctive or other interim relief from the court at any time.
Note: Mediation is a structured settlement negotiation steered by an independent mediator: confidential, without prejudice, usually completed in a day, and a fraction of the cost of court proceedings that most SMEs cannot sensibly fund. CEDR (the Centre for Effective Dispute Resolution) is the leading UK mediation body and its Model Mediation Procedure is the standard set of rules for commercial mediations.
SIGNED BY THE PARTIES
This Agreement takes effect only when signed for each Party by a person authorised to bind it (an "Authorised Signatory").
Note: Check that each signatory has authority to bind the Party they sign for. For a company, that is a director or a person the board has expressly authorised; for an LLP, a member; a sole trader signs personally. If the signatory is not a director, obtain written confirmation of their authority (for example a board minute or an email from a director) before signing. Record the signatory's role in the Title field.
For and on behalf of the Client
Signature:
Name: [signatory name of the client]
Title: [signatory title of the client (e.g. director)]
Date: [signature date of the client]
For and on behalf of the Contractor
Signature:
Name: [signatory name of the contractor]
Title: [signatory title of the contractor (e.g. director)]
Date: [signature date of the contractor]
SCHEDULE 1 - KEY COMMERCIAL TERMS
Note: Complete every field in this Schedule before signing. Each entry corresponds to a placeholder or Option choice in the body of the Agreement. In case of conflict between this Schedule and the body, this Schedule prevails.
Part A - Parties and Term
Effective Date: [effective date]
Client: [full legal name of the client] (company number [company number of the client], registered office [registered office address of the client])
Contractor: [full legal name of the contractor] ([contractor entity description (e.g. a company incorporated in england and wales with company number [number], or a sole trader trading as [trading name])], address [registered or principal address of the contractor])
Initial Term: [initial term duration (e.g. 12 months from the effective date)]
Part B - Charges and Payment (Clause 3)
Charges summary: See Schedule 2, paragraph 3.
Invoicing frequency: [invoicing frequency (e.g. monthly in arrears, milestone-based)]
Payment Period (Clause 3.2): [payment period (days)] days
Disputed Invoice Notice Period (Clause 3.3): [disputed invoice notice period (business days)] Business Days
Late payment interest option (Clause 3.4): [late payment interest option (a or b)]
Contractual rate (Option A only): [late payment interest rate (e.g. 8)]% above Bank of England official dealing rate
Expenses pre-approval required (Clause 3.5): [expenses pre-approval (yes / no)]
Part C - Scope Changes (Clause 2.5)
Scope Change Estimate Response Period: [scope change estimate response period (business days)] Business Days
Part D - Intellectual Property (Clause 4)
Foreground IPR option: [foreground ipr option (a or b)]
Client's licence scope (Option A only): [scope of client's use licence (e.g. internal business purposes)]
Part E - Confidentiality and Warranties (Clauses 5 and 7)
Confidentiality survival period (Clause 5.1): [confidentiality survival period (years)] years
Warranty remedy option (Clause 7.4): [warranty remedy option (a or b)]
Part F - Liability and Insurance (Clauses 8 and 11)
Liability cap option (Clause 8.3): [liability cap option (a or b)]
Fixed cap amount (Option B only): £[fixed liability cap amount in gbp]
Professional indemnity cover (Clause 11.1): £[professional indemnity cover amount in gbp]
Public liability cover (Clause 11.1): £[public liability cover amount in gbp]
Cyber liability cover (Clause 11.1, where applicable): £[cyber liability cover amount in gbp]
Part G - Term and Termination (Clause 9)
Breach Remedy Period (Clause 9.2): [breach remedy period (business days)] Business Days
Termination for convenience option (Clause 9.4): [termination for convenience option (a, b or c)]
Termination notice period: [termination for convenience notice period (days)] days
Early termination fee (Option B only): [early termination fee (description, e.g. £[amount] or Charges that would have fallen due in the remainder of the Initial Term)]
Early termination fee payment period (Option B only): [early termination fee payment period (days)] days
Work in progress percentage (Clause 9.5(a)): [work in progress percentage (e.g. 50)]%
Transition assistance period (Clause 9.6): [transition assistance period (days, e.g. 30)] days
Part H - Optional Clauses
Exclusivity included (Clause 12): [exclusivity included (no / yes - option a / yes - option b)]
Exclusivity sector or territory (if Option B): [exclusivity sector or territory]
Part I - Notices, Force Majeure and Disputes (Clauses 13.6, 13.7 and 13.11)
Client notice email: [notice email of the client]
Client notice postal address: [notice postal address of the client]
Client notice contact name: [notice contact name of the client]
Contractor notice email: [notice email of the contractor]
Contractor notice postal address: [notice postal address of the contractor]
Contractor notice contact name: [notice contact name of the contractor]
Force majeure termination threshold (Clause 13.6): [force majeure termination threshold (days, e.g. 60)] days
Dispute escalation period (Clause 13.11): [dispute escalation period (business days)] Business Days
Part J - Data Protection (Clause 6 and Schedule 3)
Data protection option (Clause 6.2): [data protection option (a - no processing / b - contractor acts as processor)]
Note: If Option B is chosen, complete the five mandatory processing-detail fields below. These five fields are required for the controller-processor contract to be valid.
Subject matter of processing: [subject matter of processing (e.g. provision of email marketing services)]
Duration of processing: [duration of processing (e.g. duration of the agreement and until deletion or return on termination)]
Nature and purpose of processing: [nature and purpose of processing (e.g. sending marketing emails on the client's behalf)]
Type of Personal Data: [type of personal data (e.g. names and email addresses of the client's customers)]
Categories of data subjects: [categories of data subjects (e.g. the client's customers / employees / users)]
Approved sub-processors: [approved sub-processors (list, or 'none approved at the date of signing')]
Sub-processor change notice period (Schedule 3, paragraph 2(d)): [sub-processor change notice period (days, e.g. 14)] days
SCHEDULE 2 - SERVICES SPECIFICATION
Note: Complete this Schedule in detail before signing. Vague scope is the single most common cause of disputes in technology services agreements: add detail rather than less.
1. Description of the Services
[description of the services: what the contractor will actually do (tasks, activities, outputs); technologies, platforms, and tools used; any hosting, infrastructure, or ongoing support obligations; anything expressly out of scope]
2. Deliverables
[deliverables: list each deliverable with a description, the acceptance criteria the client will use to verify it is complete and correct, and the target delivery date or milestone]
3. Charges
[charges: set out fees by item: rate, basis (fixed fee / time and materials / monthly retainer), payment trigger (on delivery / monthly / milestone), and any cap or included hours]
4. Programme and Milestones
[programme and milestones: kick-off date, key checkpoints, delivery dates, go-live or handover date]
5. Acceptance
Where this paragraph 5 applies, the Client shall have [acceptance review period (business days)] Business Days from delivery of a Deliverable to either (a) confirm acceptance in writing, or (b) provide the Contractor with a written list of defects with enough detail for the Contractor to identify and address each issue. The Contractor shall correct identified defects and resubmit the Deliverable; the review process continues until acceptance is confirmed or the Parties agree a different approach. If the Client does not respond within the review period the Deliverable is deemed accepted. Acceptance does not limit the Client's right to raise a warranty claim under Clause 7 in respect of defects not reasonably apparent on review.
Note: This paragraph 5 only applies where Schedule 2, paragraph 2 sets out express acceptance criteria for one or more Deliverables. For pure time-and-materials engagements with no defined Deliverables, leave Acceptance Review Period blank or delete this paragraph.
6. Key Contacts
Client primary contact: [primary contact name of the client] - [primary contact email of the client] - [primary contact phone of the client]
Contractor primary contact: [primary contact name of the contractor] - [primary contact email of the contractor] - [primary contact phone of the contractor]
7. Service Levels [optional]
Note: Include service levels only where the Contractor is providing ongoing or managed services with measurable performance requirements. Delete this paragraph for one-off project work.
[service levels: for each measured metric: target (e.g. 99.5% availability per calendar month, response to priority 1 tickets within 4 business hours), measurement period, and remedy for failure (e.g. service credit of [x]% of monthly Charges, capped at [Y]% per month). Service credits are the Client's sole remedy for a service-level failure unless the failure also constitutes a material breach of the Agreement.]
8. Third-Party Components
[third-party components: list any third-party software, open-source components, or ai-generated content incorporated into the deliverables, with the licence under which each is included and any obligations attached (attribution, share-alike, redistribution restrictions). write 'none' if none.]
SCHEDULE 3 - DATA PROCESSING TERMS
Note: This Schedule applies only where Option B is chosen in Clause 6.2. Complete the five processing-detail fields in Schedule 1 Part J: those five fields are required by data protection law for the controller-processor contract to be valid. Delete this Schedule entirely if Option A is chosen.
1. Roles
In relation to Personal Data processed under this Agreement, the Client is the controller and the Contractor is the processor. The processing details (subject matter, duration, nature and purpose, type of Personal Data, and categories of data subjects) are set out in Schedule 1 Part J.
2. Contractor's obligations as processor
The Contractor shall:
(a) process Personal Data only on the documented instructions of the Client (including those in this Agreement), unless required to do so by law, in which case the Contractor shall notify the Client of the legal requirement before processing, unless prohibited from doing so by law;
(b) ensure that all personnel authorised to process the Personal Data are subject to binding obligations of confidentiality;
(c) implement appropriate technical and organisational security measures to protect the Personal Data, having regard to the nature, scope, context, and purposes of processing and the risks involved (the minimum measures are set out in paragraph 4 below);
(d) not engage any sub-processor without the Client's prior written consent (general or specific), and keep an up-to-date list of approved sub-processors; where consent is general, the Contractor shall give the Client at least [sub-processor change notice period (days, e.g. 14)] days' prior written notice of any intended addition or replacement of a sub-processor, so the Client can object on reasonable grounds relating to data protection before the change takes effect; the Contractor shall ensure each sub-processor is bound by data processing terms at least as protective as those in this Schedule, and remains liable to the Client for the acts and omissions of any sub-processor;
(e) assist the Client (taking into account the nature of the processing) by appropriate technical and organisational measures, insofar as possible, to respond to requests by data subjects exercising their rights;
(f) assist the Client in meeting its obligations relating to security of processing, breach notification, data protection impact assessments, and prior consultation with the regulator;
(g) on termination or expiry of this Agreement (or earlier on the Client's request), and at the Client's election, either return all Personal Data to the Client in a portable, machine-readable format or securely delete all Personal Data and all existing copies, and certify in writing that it has done so within [personal data return or deletion period (days)] days, except to the extent retention is required by law; and
(h) make available to the Client all information reasonably necessary to demonstrate compliance with the obligations set out in Article 28 of the UK GDPR and this Schedule, and allow for and contribute to audits and inspections conducted by the Client or an auditor mandated by the Client (subject to the Client giving at least [audit notice period (business days)] Business Days' written notice and the audit being conducted during normal business hours and in a way that minimises disruption); the Contractor shall inform the Client immediately if, in its opinion, an instruction from the Client infringes the UK GDPR or other applicable data protection law.
3. Client's obligations as controller
The Client shall:
(a) issue, and may from time to time vary, documented processing instructions to the Contractor, and ensure those instructions comply with data protection law and that the processing they require has a lawful basis;
(b) respond within the notice period in paragraph 2(d) to any notice of a proposed sub-processor change, raising any objection on reasonable grounds relating to data protection;
(c) give the notice required by paragraph 2(h) when exercising its audit and inspection rights; and
(d) promptly make its election under paragraph 2(g) for the return or deletion of Personal Data on termination or expiry.
4. Security measures
The Contractor shall implement and maintain at least the following security measures:
(a) encryption of Personal Data in transit (using current industry-standard protocols) and at rest;
(b) access controls limiting access to Personal Data to authorised personnel on a need-to-know basis, with multi-factor authentication for administrative access;
(c) regular review and testing of technical and organisational security measures;
(d) a documented process for identifying, assessing, containing, and reporting Personal Data security incidents; and
(e) any additional measures specified in Schedule 1 Part J or otherwise agreed in writing.
5. Personal Data breaches
The Contractor shall notify the Client without undue delay, and in any event within [breach notification period (hours, e.g. 48)] hours, of becoming aware of a Personal Data breach affecting Personal Data processed on the Client's behalf. The notification shall include, to the extent then available: (a) a description of the nature of the breach; (b) the categories and approximate number of data subjects and records affected; (c) the likely consequences; and (d) the measures taken or proposed to address the breach. The Contractor shall provide updates as further information becomes available.
Note: The Client (as controller) must report certain Personal Data breaches to the regulator within 72 hours of becoming aware of them, and to affected individuals without undue delay where the breach is likely to result in a high risk to their rights and freedoms. A 48-hour notification window from the Contractor gives the Client time to assess the breach before its own deadline.
6. International transfers
The Contractor shall not transfer, store, or otherwise process Personal Data outside the United Kingdom without the Client's prior written consent. Where consent is given, transfers shall only take place where an appropriate transfer mechanism is in place as required by applicable data protection law (for example, an adequacy regulation, the International Data Transfer Agreement, or a UK Addendum to the EU Standard Contractual Clauses).
7. Liability
Liability under this Schedule 3 is subject to the carve-out in Clause 8.1(e) of the body of this Agreement (so it sits outside the liability cap in Clause 8.3) unless the Parties agree a separate sub-cap in writing.
About this template
What is this template?
Computer Services Agreement (UK) is a free, ready-to-use Data Protection & Privacy template you can open, customize, and download on GitLaw. It gives you a professionally structured starting point, so you never have to draft from a blank page. The wording is plain and modern, organized into clear sections that are easy to read, edit, and adapt to your own situation before you share or sign it.
When should you use it?
Reach for this Data Protection & Privacy template whenever you need a reliable agreement quickly and want to be sure the essentials are covered. It suits individuals, freelancers, startups, and established businesses alike. Instead of paying for a document drafted from scratch, you can start here, tailor the details to your arrangement, and have a polished draft ready in minutes. This version is drafted with England & Wales in mind, though you should always review the final wording against the laws that apply to you.
What's typically included?
A well-drafted Data Protection & Privacy usually sets out the parties involved, the scope of the agreement, and each side's rights and responsibilities. Expect sections covering key terms and definitions, how long the agreement lasts, how it can be ended, and what happens if something goes wrong. This template brings those building blocks together in a sensible order, so you can focus on the specifics rather than worrying about what to include. Open it to read the full document, then sign up to edit, negotiate, and e-sign it directly in GitLaw.