Definition and classification
A Service contract is a contract under § 611 BGBin which the provision of services is owed – not, as with a statement of work, a particular result, but the activity itself. Typical examples are consulting, care or ongoing services.
The service contract is therefore independent of success: the person providing the service owes careful work, not a defect-free result.
How is a service contract distinguished?
Under a Werkvertrag (§ 631 BGB) a result is owed, under a service contract the activity. Both differ from Staff Leasing in that there is no integration into the client's operation and no being bound by instructions as with the client's own employees.
What are the risks with a service contract?
If the person is in fact integrated and bound by instructions like an employee, that risks False self-employment and – with contracts for work or services using other people's staff – concealed staff leasing. What always counts is how the work is actually carried out, not what the contract is called. Where there is uncertainty, the status determination procedure brings clarity.