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A professional services agreement is established between an individual or company and a contractor providing specific services. Professional services encompass various industries, including lawyers, electricians, carpenters, financial advisors, and architects, while consulting is typically not classified as a professional service. Providers of professional services usually require specialized licenses or certificates mandated by their state. When hiring a contractor or onboarding a new client, it’s crucial to draft a clear contract that outlines responsibilities, addresses questions, and avoids misunderstandings throughout the business relationship. The video also promises a free contract template at the end.