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A personal service contract establishes a working relationship between a company and an individual or business in the personal service industry. Personal services, as defined by the IRS, encompass activities in fields such as accounting, engineering, health, law, and performing arts. These services are typically intangible, meaning the final product cannot be physically held. Consulting is a major area within this industry, but any related trade can utilize a personal services contract. To ensure clarity before hiring an independent contractor, it’s essential to create a firm agreement that includes the names of the parties involved, the date, and other key terms.