personal services

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Personal services, in contract law, refers to the special and oftentimes unique abilities and talents of individuals that cannot be replaced by the abilities and talents of another person. Therefore, personal services are more greatly valued than general labor. A contract for personal services usually imposes a duty to render the service, as well as a duty to forbear from rendering the service to a competitor. Some example of individuals who can perform personal services are actors, singers, athletes. 

According to the Restatement (Second) of Contracts § 367, “a promise to render personal service will not be specifically enforced” and “a promise to render personal service exclusively for one employer will not be enforced by an injunction against serving another if its probable result will be to compel a performance involving personal relations the enforced continuance of which is undesirable or will be to leave the employee without other reasonable means of making a living.” The rationale for this refusal to require specific performance of a personal services contract is that it would not be desirable to further personal associations between parties if there have already been disputes leading to a loss of confidence and loyalty. In addition, the quality of the personal services performance may be lowered if an individual’s sole motivation for performing is because he or she compelled to fulfill a contract obligation under law, but quality of performance is difficult to judge and quantify.

Furthermore, in some states, like California, if a company’s principal activity is the performance of personal services and owner employees substantially perform those personal services, they may be classified as a special type of corporation called a personal service corporation.

[Last updated in November of 2020 by the Wex Definitions Team]