Services Agreements

In Which Cases Do You Need a Services Agreement?

A service agreement template is useful in various situations. It can stand in place for a contractor agreement if the services agreement is utilized to hire a contractor to perform a particular service for your company. In this case, both contracts are useful in defining the compensation scheme, the confidentiality to be held in the sharing of ideas, the deadline of the work, among many other particular cases.

Services agreements, though, as previously mentioned, can be used for a myriad of other purposes. Still, another widespread use for companies is when they provide a particular service as well. If your company is a service company of any sort, be it marketing, consulting, art production, etc. You need to have a readily-made services agreement under the conditions you set out for the party hiring your services.

A terms of service agreement template for your website is required if you install cookies, have downloadables for your clients, or simply want to be safe in the case that your website malfunctions and can cause potential damages to your visitors. We have this particular document available, so check out our services agreement folder to get started!

Services Agreement Template Overview

A service agreement template is required for many different situations in modern-day business, where companies that provide services for their clients require this sort of document and companies who hire independent workers, freelancers, or contractors. The extent and importance of this type of agreement extend to websites. It protects the host of the website from any claims the visitors may have in case of reasonable malfunction and other situations that might otherwise put the host in a guilty legal position.

Now that you understand the importance of having a robust services agreement template, we will walk you through writing service contracts so that you can understand the most important parts and, as a result, better comprehend which particular services agreement template you need.

How to Write a Services Agreement

The specific parts of writing a services agreement can be a bit blurry. There are so many distinct types and particular purposes that it would be pretty tedious to list all possible variations. In place of that, here at Business-in-a-Box, we have prepared short explanations of three key clauses that need to be included, along with the longer description further in the document, where we prepare a sample for you to understand the individual parts of this agreement.

First, you need a description of the services, which is critical for exceptionally evident reasons. Without this clause, there is nothing for the agreement to be based on. Be sure to include the general nature of what you are offering/offered and disclose the delivery frequency.

Another essential clause of a master service agreement template is the fees for services, which is simply the compensation scheme for the services offered. It can be as complicated or as straight-forward as you require; just make sure that if your payment scheme is elaborate (royalties, conditional bonuses, etc.), make it clear when it applies. This will clear up any possible confusion and have your service agreement functioning smoothly.

Finally, the jurisdiction clause is often overlooked. Still, mainly in terms of service variation, you must clear this up because persons from all over the world will likely be visiting your website and bringing you much-desired traffic if your website is a point of sale. Nevertheless, if your Terms of Service agreement does not have the particular jurisdiction’s specification entering in force, it can be misleading and lead to misunderstandings and loopholes.

In the last section, we offer you a template sample for you to see the inner mechanisms of this type of agreement and so that you can understand what you are utilizing more deeply, without the hassles.

Services Agreement Template Sample

Note: This template is a general services agreement sample template, and other services agreements may have vastly different clauses according to how industry/situation-specific they are.

1. Services Provided (Description of Services)

As mentioned in the previous paragraph, the services provided clause is of vital importance to carry out the agreement in the way that it is intended. You should include to the full extent what services you are providing, in which way they are perceived, and any additional elements that define your service.

Without this section in service contracts, the whole agreement is useless. Therefore, you should seek to make it as specific as possible to create no possible confusion or misleading claims based on what is written here.

2. Term

The agreement’s term is simple on a superficial level since it allows the parties to determine the amount of time the service should take. Alternatively, the name can be “until completion of the services,” after which time, most of the contract clauses are void.

Nevertheless, a good rule of thumb to keep in all legal agreements that involve a company working with another party is that a confidential clause must be included. Any particular intellectual property or secret information released by the client must be disclosed in the confidentiality clause, or even better, the parties should enter a confidentiality agreement. Our confidentiality agreement template is also available in our legal documents section.

3. Performance

The performance clause is more of a formality rather than an applicable clause. It puts in written form that both parties will strive to do everything in their power to ensure that the delivery of the services is carried out exactly as agreed.

It also states the parties’ promise to protect and honour the present agreement to the best of their capacity, which means that they will not intentionally act against one another. The performance clause is essential to maintain in this agreement only because it makes each parties’ intention very explicit, which can be useful in arbitration.

4. Currency

This section in the service contract is antecedent to the compensation scheme, but it essentially clears any doubt of the currency used. It can be slightly tweaked when agreeing on exchange rate schemes when the deal is international.

Just as a bit of information, when one of the parties is based in the US, or when the two parties utilize the non-major (different) currencies, the traditional currency to use is USD.

5. Compensation (Compensation Scheme)

As we discussed in the previous section, the compensation scheme is crucial to make the agreement work. In short, it lists the monetary remuneration under which the contractor will work. If the plan is somewhat complicated, it should be detailed here to the fullest extent, as this is the clause that will be referred to whenever there is a dispute with prices or payments.

In the lack of compensation, such as in a Terms of Service agreement, this clause becomes redundant and is omitted unless there are certain paid features of the site, which you must disclose here.

6. Reimbursement of Expenses

Here, the client party agrees to consider all requests for additional expenses to carry out the service. Although these requests must be considered, nothing grants that the client party should approve them. This is simply a means to say that the budget can change to accommodate unexpected situations if agreed upon beforehand.

7. Confidentiality

The confidentiality clause is another critical element of any agreement that involves two parties being organized to work together, especially when one is an established business that may have critical ideas or trade secrets that need to be exposed to the other party to ensure proper collaboration. Although this clause is essential, we recommend that you strive for a full confidentiality agreement template when hiring or being hired. This is because the confidentiality agreement itself is more explicit. The dispute process will be much quicker if everything regarding confidentiality is set-up in a different contract.

In the case of a website Terms of Service agreement, what substitutes the confidentiality agreement is a website privacy policy template, which covers the use of data that the company/website will be incurring.

8. Autonomy

The autonomy section is vital to make the distinction between an internal and an external contractor. It gives the contractor the independence to carry out its process and puts that right above the client’s authority. Autonomy is standard to sign because, without it, the client might get out of line with the contractor’s requests and damage that party.

9. Severability

The severability clause is brief and straightforward and is one of the few sections that are not specific to the service agreement template. Instead, it is usually included in most legally binding documents. It states that each clause is separate from the whole. Suppose an external entity, usually, a jury, deems a particular section invalid by this severability clause. In that case, it still stands functional and legally binding until the term is reached absolved in any way.

This section is not difficult to implement, but due to its importance, it must be properly written and structured to ensure your legal security. Business-in-a-Box legal experts make sure that your exclusive contracts and all of your legal needs are entirely covered.

10. Jurisdiction

This last component is also optional but can also be very useful. The jurisdiction section binds this agreement to a single state/country. This is commonly referred to as an exclusive jurisdiction clause. Both parties agree to choose their jurisdiction, most of the time, due to the preferred judicial system or the specific method of law enforcement.