A Service contract is a broad tool used to form an agreement between someone providing services and someone accepting services. The contracts apply to a wide variety of services and businesses. So, whether you are the party providing service, or the accepting party, you should consider whether a service contract would benefit your relationship.
The contracts are extremely import to set clear terms on payment, termination of the agreement, who may own the intellectual property exchanged, how you will deal with a dispute and more.
What types of services do service contracts apply to?
Service contracts can be drafted for almost any service relationship between parties. However, some common ones are photography, digital marketing, graphic design, accounting, wedding planning, PR or other service industry related skills.
What should the service contract discuss?
First, service agreements should be in writing. Oral agreements are difficult to enforce and do not offer the protections that a memorialized contract can offer to the parties. Next, a custom service contract should outline the important details of the relationship including:
- The parties to the agreement;
- The type of service(s) being provided;
- The duration of the contract, including start and end date;
- The compensation under the contract when reach payment is due;
- The rights and duties of each party under the contract, including cancellation.
- How disputes will be handled
- Who own the copyright or trademark to the work created.
As mentioned, service contracts are entirely customizable. You or your business can contract for services on a temporary, reoccurring basis, or for a single occasion.
Moreover, service agreements are different than employment agreements. Although both are contracts for work, service agreements do not require the contracting party to offer employment benefits and they should not.
How it can save you money
Service legal contracts can often pay for themselves by providing for a term and requiring a certain notice for cancelling. So if you thing it will take sixty (60) days to replace that service account with another client, allow for a sixty day termination requirement. Need a deposit to hold a day? Make sure you not the 50% fee up front is “non-refundable.” Clauses like these will allow you to enforce this financial protections when your client cancels, saving you quite the headache if a client cancels.
If you are currently in a relationship that you think could benefit from a service contract, it is not too late! Although it is ideal to have a contract at the outset of a service relationship, these agreements can be drafted at any time.