In today’s era, agreements are generally executed between two parties to establish a legally binding relationship between them and to ensure the execution of services in defined terms and manner as agreed between them. The use of agreements in metropolitan cities and developing countries has increased compared to underdeveloped countries. This growth in the formation and execution of the agreements shows that the legal awareness in that country or city has increased. However, in most instances, people are unaware of the types and kinds of agreements and its uses. Therefore, with the help of this article we will try to explain the meaning, importance, benefits and drafting techniques for a Service Agreement.
WHAT IS THE MEANING OF A SERVICE AGREEMENT?
There is no such prescribed definition for the Service Agreement in the law, but it is generally executed between two or more parties to complete a specific task. In other words, this agreement is executed between services providers, contractors, software providers which are appointed to perform a particular task in a defined manner. Therefore, in this agreement, one party pays the other party to act or handle a specific job as agreed between them.
WHAT IS THE IMPORTANCE OF A SERVICE AGREEMENT?
Our Commercial Contract lawyer states some of the benefits of Executing a Service Agreement which are enumerated as follows:
- Bounds the Service Provider (another party) to act in a specified and time bound manner.
- Provides Scope of Work
- Provides Certainty of Task
- Provides penalties for nonperformance or delays
- Provides Payment terms are specific and clear
- Provides rights and duties concerning the resources
- Provides security for the future payments
- Provides defined manner in case of dispute
- Provides Dispute Resolution Methods
- Provides fewer chances for ambiguity
The benefits as mentioned above are general in nature as the actual outcome based upon the circumstances of each case and the requirement of the Client
WHAT ARE THE KEY PROVISIONS WHICH ARE TO BE INCLUDED IN A SERVICE AGREEMENT?
Our Commercial Contract Lawyer will enumerate some of the key provisions which are to be included into a service agreement and are mentioned herein below:
- Details of the Contracting Parties
This clause is essential to define the name with full details of the parties. Moreover, as it is impossible to mention the full name of the parties under every clause of the agreement. Therefore, in that case, terms such as “Client” and “Service Provider” must be used to clearly understand the obligations mentioned under the agreement.
This clause is mentioned to define and understand the purpose of the agreement. As in many cases, the purpose of any contract shall be clear so that no ambiguity can arise at the later stage.
- Scope of Work
This clause will define the scope of work or services which has to be provided by the Service Provider.
- Duties of the Service Provider
This clause is essential to mention in the Service Agreement as it will define the duties of the Service Provider and the manner in which the said duties has to be furnished.
- Duties of the Client
This clause will provide the duties of the Client (means the person who has appointed the Service Provider) regarding providing of resources or not.
- Duration of the Task and Agreement
This clause will provide the duration of the task which has been assigned to the Service Provider and the end of the agreement after the successful completion of the task assigned to the Service Provider.
- Penalties due to Delay or Non-performance
This clause will protect the Client for the cases wherein delay has been caused to the Client due to nonperformance; any amount which the Client may deem fit can be leveled as a penalty per day or monthly basis. Thus, this clause can also be used from the side of the Service Provider when there is a delay in payment caused from the side of the Client.
- Non-Assignment Clause
This clause will obligate the Service Provider not to assign the task to any other third party without the Client\’s written permission.
- Termination or Exit Clause
This clause will provide the conditions for termination of the agreement on certain grounds and by giving prior notice in writing to the other party.
- Indemnification Clause
This clause will indemnify the parties to the contract against the loss and damages which has been said to be caused by the actions of any third party or by their actions.
- Entire Understanding Clause
This clause will surpass all the agreements, promises which have been made before the execution of the present agreement. Therefore, this clause will make the current agreement/contract as full and final understanding between the contracting parties.
- Dispute Resolution
The parties to the contract may add this clause to resolve the dispute amicably instead of directly going to litigation.
- Governing Body or Jurisdiction clause
This clause will define the governing law of the agreement. In other words, if any dispute arising between the parties, then the law applicable to the said dispute must be mentioned.
HOW CAN WE ASSIST YOU?
Nour Attorney Law Firm helps you draft Service Agreements, also known as Service Level Agreements and Consulting Service Agreements. Our law firm consists of highly qualified legal consultants who are always ready to use their extraordinary skills and protect our client’s interests.
Our Commercial Contract Lawyer possesses one of the best skills in drafting Service Level Agreements. The draft prepared by our lawyers is free from lacuna and loopholes and protects our clients in case of future disputes. Therefore, to avail of our services\’ benefits, please contact us, our best Commercial Contract Lawyer.