Service Marketplace Critical Provisions

Essential clauses for gig economy and on-demand service platforms

Independent Contractor Classification

AB5 / Misclassification Risk

Clearly establish service providers as independent contractors, not employees. Critical for California AB5 compliance and avoiding costly misclassification lawsuits.

Background Check Disclosures

FCRA Compliance

Disclose background check requirements and obtain proper FCRA authorization. Include adverse action procedures for service provider screening.

Insurance Requirements

Liability Protection

Define required insurance coverage for service providers. Specify minimum liability limits, vehicle insurance (if applicable), and proof of coverage requirements.

Service Quality Standards

Platform Reputation

Establish minimum service standards, rating systems, and consequences for poor performance. Balance quality control with independent contractor autonomy.

Cancellation & No-Show Policies

Revenue Protection

Define cancellation windows, fees, and no-show policies for both service providers and customers. Balance flexibility with protecting provider compensation.

Payment & Fee Structure

FTC Transparency

Clearly disclose platform fees, service provider payouts, payment timing, and any deductions. Required for FTC compliance and avoiding deceptive practices claims.

Standard Legal Provisions

Essential clauses required in all Terms of Service

Agreement to Terms
Limitation of Liability
Dispute Resolution
Intellectual Property
Modification Rights
Governing Law
Indemnification
Severability

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