Understanding a Service Agreement
When it comes to providing a service to your customers, it is important that you have comprehensive service agreements in place. These agreements are made between the provider of a service and their customer. To this end, they can be both verbal or written in nature. With that being said, it’s advisable that written service agreement templates are used over an oral agreement, as oral contracts can be challenging to enforce.
They are sometimes called “contracts of form” or “general services agreements,” although they can also go by other names in some cases.
As a provider of a service, or a customer looking to hire a contractor for a service, it’s imperative you know what service agreements are and how they protect both you and the other parties. Today, we’ll be looking at what service agreements are, how you can use them, and how to create your own service agreements for business transactions.
What Are Service Agreements?
Service agreements are documents provided to a client by a contractor or service provider. They can be provided by any business offering a service, irrelevant of the business model or size. To this end, they can be used by any contractor offering any type of service. As such, anyone who relies on services provided by third parties, or otherwise who provide services to clients, must ensure they have a sound understanding of how service agreements work.
The Basics of Service Agreements
Service agreements are provided from a contractor or service provider to a client and are designed to protect both parties involved. The document outlines the services to be provided and the expectations of each party involved. Thereby, service agreements are useful documents to have at the outset of a new trading relationship as they provide a legally enforceable contract that ensures both parties’ interests are adhered to.
Purposes of Service Agreements
Service agreements are primarily created to protect both parties involved in providing a service. They outline the most important timelines and information regarding the services while also protecting price changes and contractual alterations.
Service Agreements vs. Employment Contracts
When it comes to hiring a service provider, you should create service agreements between the client and the service provider. In some ways, this might sound similar to the relationship between a business and its employees. However, when thinking about the former, you should draw up employment contracts instead. By contrast, service agreements are only used for specific projects or over a certain length of time.
As such, despite the similarities, a service agreement cannot be drawn up between a business and its employees. Service agreements are only carried out between contractors and clients and not between companies and their staff. This distinction is a highly important one to make.
What to Include in Service Agreement Templates
Service agreements, by their nature, need to outline all of the important information surrounding the provision of a service. It is the duty of clients and service providers alike to ensure that the service agreements are comprehensive and cover (at minimum) all of the following aspects:
- Relevant parties involved – one of the first things that need to be detailed in your service agreements is that of the parties involved. Usually, most service agreements will be made between a service provider and a client. However, there could be multiple service providers or clients involved in the same service agreements in some cases.
- Payment information – One of the most critical aspects of service agreements is that of payment information. Of course, the most obvious aspect here is the price of the services, including any deposit information or balloon payments (where applicable). In addition to this, payment information should also detail late payment fees, or fees liable should the agreement’s terms be breached. You should also outline any future price changes and how these are calculated in the service agreement template.
- Scope of services – your service agreements need to detail the scope of the services provided to the client. As part of this, you should describe the type of services being provided in as much detail as possible. You should cover all of the different aspects that will be charged for in this section. For example, a business providing building services would need to include both the building services and transport time to and from the building site in this section if they wished to charge for both as part of the overarching service.
- Changes to the terms of the agreement – In some cases, circumstances may change, and you may need to alter the service agreements due to this. Generally speaking, it is essential that you get the service agreements correct the first time around. This is why service agreement templates are valuable, as they provide a strong basis from which to create your service agreements. However, some circumstances may be unavoidable, and the parties may need to amend the terms of the service agreement as such. The original service agreements should detail how this process will be undertaken and who will conduct the services.
- Termination of the service agreements – while we all like to think that agreements will stand the test of time, sometimes, the agreement may need to be terminated. Suppose either party went against the terms of the agreement at any time, or otherwise engaged in illegal activities. In that case, the service agreements can be terminated. Moreover, if all involved entities agree to terminate the contract in written form, this would also constitute a termination of the contract.
Always Get a Second Opinion
Service agreements don’t need to be difficult contracts to write, particularly for one-off, low-value services. With that being said, they are still important documents, and you should take some time to ensure that you are including all of the relevant information. So, prior to signing any service agreements, you should check that the agreement is comprehensive and covers all necessary information for the best results possible. A legal advisor can help ensure you have covered everything in your service agreement if you’re concerned about whether or not you’ve been thorough enough in writing it.
Using Service Agreement Templates
There are many reasons as to why you might want to use a service agreement template. Indeed, these templates can offer a plethora of different benefits, making them potentially good options for you to consider. But why should you write your own service agreements, using service agreement templates instead of getting a professional legal advisor to do the work from the outset?
Are Service Agreement Templates a Good Option?
Some of the many reasons that you might want to use service agreement templates are outlined as follows:
- Professional formatting for the service agreements – your service agreement needs to be well designed to ensure that it does the job. A well-formatted document is essential to get the information across in a clear and concise manner. However, if it is not designed well then you will likely find it is hard to follow. As such, it is a necessary requirement for your service agreements to be well laid out, and service agreement templates can offer this. Good service agreement templates will have been designed by an expert in the legal field. They have extensive experience in creating effective documents tailored to meet every service provider’s needs. Hence, you can be sure that a high-quality service agreement template will help you make premium agreements the first time.
- Improve your business efficiency – when it comes to ensuring your business is running efficiently, your staff needs to be spending time doing things that bring in revenue for the firm – and spending long periods trying to create service agreements from scratch will absolutely complicate this! However, if you choose to use a service agreement template, you will find it much easier to get started with your service agreements. Therefore, these templates can save your staff a substantial amount of time. Subsequently, this will improve your business’ efficiency as a result.
- Your staff knows the business better than anyone else! – When it comes to service agreements, it is essential that you get the content of the agreement right. After all, a service agreement needs to detail the services that you are offering. And so, the information contained within must be appropriate. However, only your staff truly understand the nature of the services being provided. Hence, it is generally more effective if your team can write the service agreements, as this will ensure that the agreement is completed to a high standard and with accurate, factual information. By comparison, while a legal advisor might know more about how these documents work, they won’t know your business and the services you provide. So, letting your team write the agreement instead can be a beneficial option.
- Legal fees are expensive! – If you hire a legal expert to help with your service agreements, you will likely find that the costs are substantial. This is particularly the case when one takes a moment to consider the time taken to teach the legal advisor about your company and the services you offer to customers. Instead, writing your own service agreements with the use of service agreement templates – and hiring a legal advisor to check the file after – can be a much more affordable option for many businesses while also ensuring that the service description is accurate.
Indeed, there are many reasons why using a template could be beneficial. As such, if you’ve been planning on making service agreements for your business, you should absolutely consider how service agreement templates could be a good fit for all of your needs.
Where to Find Service Agreement Templates?
Finding the highest quality service agreement templates doesn’t need to be complicated. However, it is essential you take the time to check whether professionals have designed your templates. Indeed, you need to be sure that your service agreement templates will be of a high quality and designed by someone who knows the importance of a well-laid-out service agreement. Fortunately, though, our team specializes in providing premium templates for this very purpose.
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