Are actors employees or independent contractors

Service contract, fee contract, work contract - what is behind it and what the differences are

The contract for work

In the contract for work, a self-employed person undertakes to produce the work formulated and promised in the contract. The contractual partner (purchaser) is obliged to pay for this work. The contract regulates both the production of a work and the modification of such a work.

Note: In contrast to the service contract, however, success is also the subject of the contract here. In other words: Not only the best possible doing in itself, but also the concrete success, is owed by the service provider. The person obliged to produce is entrepreneurially independent and can decide for himself how and in which way he carries out the necessary activities / work.

An example: You take your defective bike to a bike shop (with a repair shop). In doing so, you conclude a work contract with the shop (owner) for the repair, whereby the latter owes you the successful repair of your bike.

Conclusion: Since contracts for work and services are relatively similar, both clients and contractors are often unclear as to which contract should be considered.

A decision-making aid could be: The contract for work comes into effect when it is clearly defined how a "work" should ultimately be designed and function. So it's about measurable success. The service contract is purely about the work performance or the execution of a service independent of the work success.

The fee contract

This term refers to the establishment of agreements through which a service provided is directly remunerated. There are two variants: the fee is either fixed or success-related. The chosen remuneration method must be set out in writing in the contract. As a rule, the cooperation between a company (client) and freelancers or self-employed (contractors / freelancers) is regulated by means of a fee contract. The fee contract is, so to speak, a contract for freelance work. It is often referred to as a mixed form, because, as already mentioned, it is drawn up on the basis of a service or a work contract depending on the task and objective.

Nevertheless, there are also differences to service and work contracts, which is why you should be very careful when drafting and formulating a fee contract and pay attention to all eventualities. Otherwise you run the risk of high costs in the form of additional payments.

Important: The contractor / freelancer must work independently and not be bound by instructions. He can freely determine the place of work and the working hours. The client cannot issue any other instructions that the freelancer would have to follow on a fee basis. A fee contract can be used in different areas and can be concluded between different parties, for example between a company and a freelancer or between the self-employed and a private person.

The most common professions in which fee contracts are concluded include:

  • Tax and business consultants
  • Appraisers and experts
  • Teachers, lecturers, students
  • Journalists, copywriters and authors, as well as artists such as actors, musicians, painters

Note: With a fee contract, there is always the risk that the status of an employee is actually present and that there is an obligation to pay social security contributions. This means when an agreement is referred to as a fee contract, but de facto the wording of the contract refers to an employment contract in the employer-employee relationship. You should definitely avoid this. But even if this risk exists in principle, fee contracts are absolutely permissible and legitimate, as they do not in principle define an employment relationship, but a contract for work and services.

Important: If there is an examination of an existing fee contract (for example by the pension insurance) and it becomes clear from this that there is actually no free employment relationship, but a dependent employment relationship (due to the character and actual structure), the client is at risk of partly high additional demands on the part of the social security. More on that in a moment.

If you are now wondering how it was again with freelancers, freelancers and Co., then you can read here again What is the difference between self-employed, freelancers, freelancers, freelancers & Co.?

Legal consequences for work and service contracts

There are different legal consequences depending on the type of contract.

  • At the Contract for work: the services owed include the production of the work and the payment of a fee. If the "work" shows defects at the end, the customer has special warranty rights (similar to sales law). These are regulated in §§ 634 ff. BGB. Under certain circumstances, claims for damages, a reduction in price or a withdrawal from the contract can then be asserted.
  • At the Service contract: the focus here is on doing or taking action to the best of our knowledge and belief. Success is not guaranteed. In return, the remuneration is due. But there is generally no entitlement if the desired success does not occur. Compensation and withdrawal are only possible in individual cases if there is a breach of duty in the context of the activity. In particular, §§ 280 ff. BGB and §§ 320 ff. BGB apply.