A services contract or services agreement is a vital tool and guideline for two parties performing business with each other. It is a legally binding agreement between a services provider and a client to help clarify definitions, objectives, goals, expectations, consequences and other imperative factors involved throughout the term of agreement. To help you prepare a services contract, consider the following steps.
- Establish a carefully structured service level agreement or SLA. SLA is a part of the services contract where the service provider affirms the negotiated agreement with the recipient of the service or the client. It must scrupulously distinguish the scope of services and what it does not cover. Furnish a precise definition of what you are going to supply with clear purpose and objective of each service. State how you are going to perform each task and when you will do it. Remember that how you are going to execute the services requires standards and criteria, and these decisive factors should be divulged in the performance measurement. If you fail to deliver on time or fail to meet the criteria, indicate what consequences should take effect or actions that need to be taken under representations or warranties such as redoing the tasks to meet the standard at a designated time period. Problem management, disaster recovery, duties of the customer, and termination of agreement are other aspects that must be clearly specified.
- Your services contract form must stipulate the payment for the services you render. The amount of payment, schedule of payment, terms of payment, including charges for late payments must be clearly specified. Indicate what extra cost should be included such as taxes and other expenses.
- The services agreement should include additional requirements and responsibilities of the client. Indicate consequences such as charges where failure to comply with the agreed negotiation occurs.
- How long the agreement will be valid, extension, causes of termination and other options must be well measured and reflected on the contract form.
- To protect both parties in cases of uncontrollable events such as Acts of God or forces of nature, wars or revolts, it is important to include force majeure so that neither party shall be liable for non performance or delay of services. Take note however that other than the stipulated causes or where non-performance is due to common forces that could have been prevented, force majeure should not be applied.
- When preparing a service contract, know the existing and applicable laws in your area, as enforcement of the services contract shall be under jurisdiction of the state. Any services agreement shall comply with the regulations implemented by the federal, state and local government.
- As a service provider, you need to protect your employees or agents from any liability that may arise due to non-performance or negligence. Inclusion of indemnification, an agreement between you and your client will safeguard your people from possible lawsuits, claims or fines.
Services contract should not project any subliminal implication. Be precise in your provisions and ensure that you act on them in good faith. If you need to view a sample form of a services contract, the Internet can provide you with different examples such as consultant contract, freelance contract, services agreement forms by government services, medical services or a contract agency.