Agreement & Contract

Know All About The Service Agreement

LegalKart Editor
LegalKart Editor 06 min read 759 Views
Last Updated: Nov 04, 2023
Know All About The Service Agreement

About Service Agreement 

A Service Agreement can be described as an agreement (in written form) between a service provider and a customer. Besides, a service contract which is also known as a general service agreement is a legally binding document that protects both the providers and customers.

This type of contract puts up what the provider can do, how long & how much they will be paid. Many of these service contracts also depict the rights and responsibilities of both the parties, for instance, liability and confidentiality rules. Many of them also mention what to do if one party breaks the contract.

Also, read How to Draft a Service Agreement?

Service Agreement – When Is It Needed?

A service agreement is made whenever your company gives to another company, a business to do or a service when your company hires someone. These agreements can be done for either one-time deliverables during a short period or long-term partnerships over a larger period of time.

Before you begin to consult, you should sign a service agreement. If you are writing a mutually beneficial service agreement, you can put up expectations and ensure that both you and the other person are protected under the agreement.

Who Is A Service Provider?

As we know about the service agreement, let us talk about service providers. Whether contractors or freelancers, you can do that too. In fact, you can provide any intangible service, from low-level work to high-level tasks like consulting. Service providers may encompass a wide range of people, but some common ones are:

  • Consultants for branding
  • Caterers
  • Providers of childcare
  • People who walk dogs
  • Those who work on their own as accountants
  • Some people work in the field of graphics
  • Hair Stylists
  • Some people do make-up
  • People who play music and DJs
  • They work in public relations
  • Some people work on the web
  • People who write and people who edit.

What is a Service Agreement?

Irrespective of how unique a service agreement may be, it usually has the same information:

Services: It tells about the general nature of services and often comes together with a schedule that talks about the scope of the work and the deliverables that will be made.

Compensation: This is the complete amount or the amount that the client is ready to pay to the service provider in exchange for the work. It may also hold a schedule.

Terms: It has the beginning and closing dates of the contract, or the time period (the number of days, weeks, or months for which) the contract is in effect, are called terms.

Ownership: This point makes it clear as to who owns any physical or intellectual property that was made during the project, whether the service provider or the client

Relationship: It states that the service provider is not an employee of the client

Liability: It clearly ensures that the client or the service provider is subject to only limited liability for any project parts that go wrong. This may include only Workers’ compensation, general commercial liability, and professional liability.

Insurance: It is a must for a service provider to have property insurance while doing their job. It states how either party can change the scope of work and how they must do so.

The Clause of Confidentiality: This clause can tell us if either party must keep the project confidential. It also tells us whether the service provider can work with one of the client’s competitors

The Clause of Non-Solicitation: This tells us if the service provider can or cannot get in touch with the client’s customers or peers. In this, it is clearly demarcated if the provider can outsource the project

Termination: This tells us how many days’ notice each party must give before ending the agreement.

You may like to read How to Write a Master Service Agreement?

How Can We Make a Contract for Services?

In order to make a service agreement, these seven things are to be done:

1. The Service Provider and Customer Ought To Be Named

As per this point, you should write down the legal names and mailing addresses of all the involved people

2. A Lot of Things Are To Be Do on the List

The main contract should make it clear what the services are. If it is a schedule that comes with a text, you will need to write down the scope of the work and any deliverables.

3. People should be aware of their pay

Also, along with the amount of money that you owe, you should also add payment dates or frequency dates.

4. Clarify About Who Owns The Thing

In case the service includes physical goods or may be intellectual property (IP), it should be clearly stated as to who owns them, the service provider, or the customer.

5. Keep in Mind, Whether Confidentiality or Competition

In case, the client doesn’t want that the service provider should talk about the project or work with various competitors, you should ensure that the provider knows the rules and must follow them.

6.  The Deal Should Be Executed

When both the parties agree to the terms and sign the contract, the agreement must be legally binding.

How Can We Create A Service Agreement? =

It is always better if you make an attorney write the contract, irrespective of whether you need to change a few things in the standard service agreement meaning or you want to make it a unique contract. Its always better to hire a lawyer to assist you with your legal problems because you can get many important things.

In case you need to add extra clauses to your contract, you need not use a contract template with standard language. A lawyer can assist you to change any part of your contract while ensuring that it protects your rights and binds both parties legally.

You may also read Service Agreement Vs Contract - How They Compare & Differ?

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