Businesses who provide or receive services should ensure they have a service agreement in place. A service agreement sets out the rights and obligations of each party to the arrangement and provides a level of legal protection for your business if something goes wrong. This article will explain why a service agreement is necessary, and what you may need to include in such an agreement.
What is a service agreement?
A service agreement is a contract between the provider and receiver of services. It is a legally binding document that sets out the rights and responsibilities of each party, and the terms on which services are provided to the client.
Why do I need a service agreement?
Businesses who provide or receive services should have a comprehensive service agreement in place to make sure each party knows their rights and responsibilities under the agreement and what to do if anything goes wrong. For example, it may outline what the consequences are for performing the services inadequately or failing to provide them by a certain date. If a legal dispute arises, a service agreement can provide clarity on who is liable for any losses and make things easier to resolve.
What should I include in a service agreement?
A service agreement should clearly set out the terms on which one party provides services to the other. Importantly, businesses should ensure that their agreements are tailored, enforceable, and properly constructed to avoid legal consequences and penalties. It is crucial that the contract is properly signed and does not include any unfair terms. Key questions to consider in drafting your service agreement include:
- Who is the service provider and who is the client under the contract?
- What are the services to be provided?
- Is this a one-off provision or services or an ongoing arrangement?
- Is the agreement exclusive, or can the service provider enter into service agreements with other clients?
- What confidentiality and privacy requirements need to be adhered by?
- When should services be provided? Is there a required time period?
- How much should the client pay the service provider, when should payments be made and what happens if payment does not occur?
- Which party carries the risk of loss?
- What happens if the services provided are inadequate?
- A service agreement is a contract between a service provider and client that sets out the terms of the transaction and obligations of each party.
- Businesses who provide or receive services should have a service agreement in place so that each party understands their responsibilities under the agreement and what to do if anything goes wrong.
- Businesses should ensure their agreements are tailored, enforceable, and properly constructed to avoid legal consequences and penalties.
Gladwin Legal are experts in retail law. If you require assistance in drafting service agreements, reviewing contracts or protecting your business from legal risk, please contact us at or 1300 033 934.