Does A Service Contract Have To Be In Writing

Before yous begin working with a client, draw up a service agreement to ensure that you share the same expectations well-nigh the work to exist performed, fees, and other details of your working arrangement.

A service agreement is a written contract between a service provider and a client. It spells out the work to be performed and the responsibilities of both parties in getting the piece of work washed and paid for.

Sometimes called a professional person services agreement, service contract, or customer services agreement or contract, a service agreement besides includes time frames for beginning and completing the work, boosted due dates if needed, and other procedures and details involved in the job.

Why Use a Written Service Agreement?

Oral understandings are risky. Your client might run into with several providers and confuse the telescopic of the work you lot described with someone else's. You might neglect to mention important details like situations when additional charges would apply. Written service agreements minimize the run a risk for disputes and fifty-fifty lawsuits that might ascend due to these types of omissions and misunderstandings.

Who Needs a Service Agreement?

When you purchase a auto, a figurer, or an appliance, you usually get your buy on the spot. Even if you society it and wait for delivery, you know exactly what to wait and what you are getting. Just you lot can't look at a service beforehand the mode you would an appliance. Many services are performed over a long menstruum of time, and customers often pay the fee, or at least a portion of it, well before they see what their money bought.

For instance, a developer who creates customized software for a company will likely get through several steps—from determining the company's needs to designing, installing, and testing the software—earlier delivering whatsoever work.

A written service agreement is a style to manage expectations while the work is underway. It also assures both parties that they volition get the work and fees they bargained for in the time frame they expect.

Not all services require agreements. For example, when you take your car to a quickie oil change shop, chances are that you lot and the owner concord orally about the price, what volition exist done, and when. But when work is performed over time, both parties need the protection of written standards, goals and pricing.

Some of the businesses and professionals who rely on service agreements include:

direction consultants
graphic designers and illustrators
photographers and videographers
website developers and IT service providers
real estate brokers
full general contractors and construction companies
accountants and lawyers
advertising and marketing professionals, and
caterers

How to Write a Service Agreement

The title of the agreement should include your visitor name and "service understanding," "client agreement," "customer agreement," or some other title that best describes your situation. Real estate brokers use the term "listing agreement," for instance, for contracts to represent properties for auction. An auditor might use a "taxation preparation agreement," and then on.

Many aspects of a service agreement can be standardized, and you tin can create what'south called a template that provides the nuts y'all'll need for your concern nearly of the time. Yous might take to arrange your template to accommodate specific arrangements y'all make with an private client. Simply you'll usually be able to fill up in the blanks without reinventing the cycle each fourth dimension yous get a new customer.

Some industries and professions might crave additional specialized sections, just in general, a service agreement should include these sections and topics:

A description of the parties involved in the agreement. The outset of your understanding should include the names and addresses of the parties involved. If ane or both parties is a business, you should include the type of entity, such every bit a corporation or express liability visitor. Our general contractor mentioned in a higher place might first out by proverb, for case, "This is an agreement between Joe'south Beautiful Homes, a limited liability company located on 100 Main Street, and Mary Smith, an private, located on 100 Pino Street."

A description of the services to be performed. Be every bit specific equally possible, keeping in listen that yous won't be able to modify your fee if you finish upwards doing additional work. A caterer would want to specify the hours they would spend at the outcome, the number of servers, and the number of people who would exist fed, besides equally the amount and quality of food to be served. Accurately listing the materials and time volition help ensure that the caterer bids the chore fairly to cover these costs (serving simply organic produce, for instance, will cost more than conventional produce, and describing the food equally organic will prompt the caterer to take its added expense into account).

A clarification of fees and payment schedules. Include terms like whether the charges are hourly, weekly, or monthly; or whether you are charging a flat fee per projection. You might too need to specify whether the pricing includes expenses, such every bit travel for a consultant who must visit different company locations, or if those expenses are to exist billed and reimbursed separately.

You'll also want to include a payment schedule with dates and amounts due. Some providers, like caterers, will typically accept two payment dates and amounts, i for the deposit and ane for the residual due. But other providers, such as contractors, might accept a months-long schedule of payments due for projects that accept many months to consummate.

The pricing section should also include the types of payments yous accept, such as checks or credit cards. Some agreements will include a clause that specifies what will happen if payments are not received according to the schedule. Late fees must judge, as nigh as possible, the bodily damages that the business organisation or professional suffers when not paid on fourth dimension. (Courts will not enforce tardily fees that are so loftier that they are castigating.)

The effective appointment of the contract, when work will begin, and the terms under which it can be terminated. The effective date of a contract is the date after which both parties are bound to its terms. Oftentimes, the effective engagement is the engagement both parties sign the contract, just it doesn't accept to be. Next, include a work schedule—work done on a project basis should, at a minimum, include beginning and cease dates. Y'all might list other due dates if your projection has several different stages or steps.

Ongoing services, like an Information technology maintenance contract, typically last for a year or vi months, and they include provisions for renewing the agreement at the finish of that menstruation.

Your agreement should likewise comprehend situations where you are unable to consummate a project considering of something the client does or does non practice. A consultant hired to provide Hour seminars to managers in several office locations, for example, might be unable to consummate the assignment because one of the offices does not provide a schedule for the seminars. Your contract should anticipate the most likely performance problems (known equally defaults) and provide a means for remedying the state of affairs.

If certain defaults would be so meaning that they would seriously diminish the value of the service, yous might want to include a provision that allows either political party to stop the contract with a specified amount of find. Conversely, you might want to give each political party the right to terminate the contract for no reason, with adequate written notice (often 30 to lx days).

Include a place for signatures. Service agreements should always be signed and dated by both parties involved. It's a good idea to likewise have the signatures notarized to prevent any party from challenge later on that it did not sign the understanding.

Other Provisions Your Contract Might Demand

Service agreements for sure types of jobs and businesses might also need to include provisions or clauses that bargain with specialized situations. Some of these clauses are:

A hold harmless clause. Hold harmless clauses are typically used when a party wants to shift responsibility for risks associated with the service it will provide. For example, a general contractor might include a hold harmless clause that relieves the company of responsibleness if it or a subcontractor damages the client's property while doing the piece of work.

An indemnification clause. An indemnification clause is a promise that you will reimburse the other party if it has to pay money to encompass specified damages or losses that it has suffered.

Warranty clauses. Warranties are assurances that work or a production volition meet certain standards or be fixed or replaced within a specified timeframe. They are typically used in construction.

Confidentiality clauses. Consultants, web developers, and other service providers typically use a confidentiality clause to keep sensitive information from falling into the hands of the contest. A consultant who has adult a special process for streamlining workflow, for example, might employ a confidentiality clause to foreclose the customer from sharing it with another consultant.

Provisions for intellectual holding. Peculiarly in creative fields like graphic blueprint and photography, service agreements specify who will own the finished product. If the provider owns it and licenses its utilise to the client, the license should describe the situations where the customer may use it (in specified products or for a express time, for example).

Provisions requiring client cooperation. The understanding should include a provision that defines the client's responsibility to provide information and help then that the provider can meet its obligations.

Average provisions. Average provisions are understandings between parties that are so normally used that they appear unchanged in many contracts. Lawyers literally copy and paste them into their contracts. Examples include a "severability" clause (where the parties agree that if a judge finds that one part of the agreement is non enforceable, the rest of the agreement will remain in identify), a argument that all understandings between the parties are contained in the agreement (this prompts the parties to place all oral understandings in the agreement), and a clause stating that the understanding cannot be changed except by the parties' written consent.