What is Service Agreement Drafting?
A service agreement is a type of legal contract that’s signed by a client and service provider for certain deliverables. It can be signed between various parties, such as companies and vendors or freelancers.
It specifies various aspects of their working relationship, such as work scope, deadlines, payment, and parties’ duties.
Drafting a service agreement requires clarity and balance to favor both parties and protect their interests.
Read the rest of this article to learn what should be included in a service agreement, tips for drafting it, and how a lawyer can help you navigate the service agreement drafting process.
What are Key Terms to Include in a Service Agreement?
Service agreements typically include the following information:
- Work scope. This section outlines what services will be provided, and it can include exclusions for clarity.
- Duration. How long the agreement will be in effect must be clarified, with start and end dates.
- Payment. This should include information about pricing amounts, payment schedules, due dates for payments, and penalties for late or missed payments.
- Duties. Both the provider and client will have specific roles and responsibilities to fulfill.
- Intellectual property (IP). It’s important for the service agreement to detail who owns the rights to the IP created during the agreement.
- Confidentiality. This serves to protect sensitive or confidential information that’s exchanged and used during the agreement term.
- Termination. This section provides clarity for how parties can terminate the contract, such as by giving specific days’ notice.
- Disputes. The contract should include a dispute-resolution method so that parties know how to resolve disagreements as they arise, such as mediation or arbitration to avoid going to court.
What are Common Types of Service Agreements?
There are many types of service agreements to know about and consider for your specific situation and requirements. Here are some of the most common ones:
- Fixed-term service agreement. This type is drafted for a limited time and specific project.
- Ongoing service agreement. If you need a contract for an ongoing service, such as subscription services, you’ll draft an ongoing service agreement.
- Retainer agreement. This is common for freelancers. A client will pay a fee on a regular basis to receive ongoing services.
- Consulting agreements. Professionals who provide specialized services, such as legal advisors, will make use of a consulting agreement.
What are Things to Avoid When Drafting Service Agreements?
When writing a service agreement, there are potential pitfalls to avoid so that you don’t run into issues. Here’s a rundown of what to bear in mind so it doesn’t sneak into your contract.
Ambiguous Wording
If your contract is filled with vague or confusing clauses, this puts you at an increased risk of disputes because there’s too much room for misinterpretation.
Ensure the contract is clear and written in simple, straightforward language that all parties can easily understand.
Not Including Breach Remedies
If duties aren’t fulfilled, there should be consequences laid out in the agreement. This can minimize the damage caused by the breach while ensuring that recovery is possible.
Not Considering Your Business Goals
Your agreement should be aligned with your goals and strategies, as well as your other company operations. This will prevent confusion or misinterpretation, while ensuring that you’re not creating unnecessary dispute risks.
Not Including Warranties and Liability
These are important clauses to include in your service agreement. They provide guarantees on the service quality you can expect and keep parties accountable.
Not Having a Force Majeure Clause
Your contract should have a force majeure clause that will prevent parties from taking on liabilities for things that go wrong which are out of their control, such as if there’s a natural disaster that prevents the work from continuing for a period of time.
Forgetting About Consumer Rights
Service agreements must align with consumer protection laws and regulations so that your pricing and other terms are fair to your customers. This will prevent issues and disputes from arising and harming your business reputation. For service providers specifically, a benefit of this is transparency. It shows customers what they can expect from the services.
Do You Need a Lawyer for Service Agreement Drafting?
Hiring a lawyer to draft your service agreement is a strategic move to avoid costly legal or financial problems. Since they have lots of experience in drafting business contracts, they’ll provide a clear and thorough contract that protects your interests.
Here are some specific things a lawyer will do during a professional drafting of a service agreement.
- Lawyers draft transparent and legally-enforceable contracts. This saves you time and money spent on litigation.
- They know what terms are most important to include in the agreement so that you avoid disputes.
- They spot potential legal and financial risks you could face so that they can include provisions to protect you and your business.
- They match the service agreement terms to all laws and regulations so you don’t risk non-compliance.
- They’ll draft a professional agreement that creates stronger working relationships with other professionals.
- They’ll negotiate any terms prior to drafting the agreement for favorable outcomes.
Where to Hire a Lawyer for Service Agreement Drafting
If you need to hire a lawyer to draft your service agreement, it’s easy to find a lawyer on an online legal platform. On ContractsCounsel, an online legal marketplace that gives you access to a curated network of vetted lawyers, you can find and hire a lawyer to draft your service agreement so that it’s clear and legal.
To request a lawyer on the platform to draft your service agreement, follow these steps:
1. Go to the ContractsCounsel marketplace.
2. Post your project for free, including a few details of what you need so you’re matched with the best lawyers.
3. Wait for lawyer bids. You’ll receive multiple bids from lawyers directly on the platform who can assist you.
4. Once you receive the lawyer bids, you should review the lawyers' profiles. There’s lots of info on the platform to help you choose the best lawyer, such as their location, client ratings, years of experience, and field of expertise.
5. Connect with a lawyer you think is best suited to your requirements and hire them.
