Regardless of the contract structure, however, all service agreements should address the ten important issues discussed below. Note that this article is written from the service provider’s point of view – customers reviewing service agreements may be concerned about different issues, and may have different perspectives on the issues.
Your company’s boilerplate service agreement should reflect the price structure that is most appropriate for your business. It should specifically state whether or not your company is compensated on a per-project (flat fee) basis or an hourly, weekly, or monthly fee basis. If you charge the same rates for all clients, then include these numbers in the contract; otherwise, you should leave blanks that can be filled in depending on your negotiations with each respective client.
Businesses often use MSAs to help make contract negotiations simpler. This agreement lets both companies spend their time discussing the terms of the deal. Then, they can proceed with the work outlined in the agreement. If you don`t have an MSA, the customers and the company can still work through issues, but there are big concerns that might derail the contract. Having an MSA before having a specific contract lets companies focus on what their particular contractual issues are, such as the time frame and the price, for when the contract actually arises.
The service provider may agree to provide a one-off service for a set fee or continuing services to the principal for a pre-determined length of time or on an ongoing basis for a fee. Generally, a service agreement may be terminated by notice of either party or on the occurrence of a specified event (e.g. death or bankruptcy of one of the parties).
If the service provider will have access to the principal’s confidential information (e.g. information on its business and customers) then confidentiality and privacy obligations must be included, particularly if confidentiality is an issue for your business, in order to protect the principal.
A service agreement is an agreement made by two parties that documents the agreement between them with regards to the performance of the service(s) by one party (the service provider) to the other (the principal). Service agreements are very common and can be used in a wide variety of circumstances. They set out the fundamental terms of the relationship between the principal and service provider.