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A professional services agreement is established between an individual or company and a contractor providing specific services. Professional services can cover various industries, including lawyers, electricians, carpenters, financial advisors, and architects, but consulting is typically not classified as a professional service. Professionals in these roles usually hold specialized licenses or certificates mandated by their state. When hiring a contractor or engaging a new client, it's essential to draft a solid contract to clarify expectations, define responsibilities, and minimize misunderstandings throughout the business relationship. At the end of the video, a free template for a professional services agreement will be provided.