How to Write a Service Contract Agreement

In a weekly blog, Samira Ali, of SCE Solicitors, will be sharing her extensive knowledge on employment law. This week she looks at how to Draft a Service Agreement.

Many freelancers and small business owners start a business with very little money therefore the last thing on their agenda is to pay a legal professional to draft up a service agreement. However many, if not all, businesses consumers expect a contract of some form to be in place when they engage in professional services.

Using myself as an example I have recently engaged in the professional services of a marketing expert however when finalising the details of the engagement I requested to see a draft service agreement. My supplier, a freelancer, seemed somewhat taken aback. I patiently explained that being a solicitor, I frequently see relationships deteriorate because the parties have not clearly set out the terms of the arrangement at the outset. He then cobbled a service agreement together and only sent me one copy to execute! Always remember it is best practice to execute a document in duplicate, an original and counterpart, to ensure that each party retains a signed copy.

I find the key to maintaining a long term working relationship is to ensure that as a supplier you clearly define the services you are providing. For a complicated service agreement you should always ensure that you take legal advice, not only to protect your interest but also to stay out of any form of litigation, if things go wrong or if the consumer is not satisfied with the service provided. However if you are in a position where you have been requested to provide your client with a service agreement here are the basic clauses, a service agreement should contain:

  1. Heading/title.
  2. Description/purpose/the service (basically the product/service description).
  3. Parties (supplier and client – including addresses).
  4. Date.
  5. Territory/geographical coverage.
  6. Definitions – essential glossary ‘root’ of frequently occurring items in the document.
  7. Term – period of agreement.
  8. Pricing (refer if appropriate to attached schedule).
  9. Pricing adjustment (for example annual increases linked to suitable index).
  10. Responsibilities of provider – include or append details of services and SLA’s (service level agreements).
  11. Responsibilities of client.
  12. Payment terms.
  13. Confidentiality.
  14. Dispute and arbitration process.
  15. Termination and force majeure.
  16. Renegotiation/renewal.
  17. Prevailing laws.
  18. Signatures and witnesses.

The clauses highlighted in bold are the minimum any agreement should contain, however again (and you may get sick of me saying this), this entirely depends on the nature of the agreement.

If you are a small business or freelancer – what issues have you faced and how did you deal with them? Join the conversation on Twitter. We’re @YbnUK.

If you need help and assistance drafting your service agreement why not contact Samira on 0113 350 4030 or samira.ali@scesolicitors.co.uk.

Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with me or other professional counsel before acting on the information contained here.