Make an agreement wiith a service provider: Service Agreement
What we’ll cover
What is a Service Agreement?
A Service Agreement is a legally binding contract that outlines the manner in which services by a company will be provided to a client (company or individual). Service Agreements only deal with services purchased from a business and do not address issues related to independent contractor status.
Having a Service Agreement in place is equally important for service providers and service receivers. For the service provider, the agreement provides details about the service that is expected, including when the work is to start and when it is expected to end. For the service receiver, the agreement provides important information about the service that will be provided, including the amount to be charged, whether or not expenses are included, and when payment is due.
Service Agreements can also be helpful in scenarios where services will be provided over a long period of time. For example, an agreement can capture that a service provider will schedule a visit to inspect your home security system every year. This removes the need to sign a new contract each time an inspection is needed. Get started on your Service Agreement with Rocket Lawyer now!
When to use a Service Agreement:
- Your business will be providing services for a business or individual.
- You will be contracting with a business to receive services.
Sample Service Agreement
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This Contract for Services is made effective as of , by and between of , , (the "Recipient"), and of , , (the "Provider").
. DESCRIPTION OF SERVICES. Beginning on , will provide to the services described in the attached Exhibit (collectively, the "Services"). the following services (collectively, the "Services"):
. PAYMENT. Payment shall be made to Provider in the total amount of upon completion of Servicesupon execution of this Contract. no later than .in regular payments of per until termination of this Agreement. according to the following schedule: agrees to pay as follows:
Event and Payment Amount
In addition to any other right or remedy provided by law, if fails to pay for the Services when due, has the option to treat such failure to pay as a material breach of this Contract, and may cancel this Contract and/or seek legal remedies.
. TERM. This Contract will terminate automatically on . will terminate automatically upon completion by Provider of the Services required by this Contract. may be terminated by either party upon days' prior written notice to the other party. An email notice by one party will suffice. will remain in effect for a period of .
. WORK PRODUCT OWNERSHIP. Any copyrightable works, ideas, discoveries, inventions, patents, products, or other information (collectively the "Work Product") developed in whole or in part by Provider in connection with the Services will be the exclusive property of Recipient. Upon request, Provider will execute, within a reasonable period of time, all documents necessary to confirm or perfect the exclusive ownership of Recipient to the Work Product.Provider. Upon request, Recipient will execute all documents necessary to confirm or perfect the exclusive ownership of Provider to the Work Product.
. INDEMNIFICATION. Provider agrees to indemnify and hold Recipient harmless from all claims, losses, expenses, fees including attorney fees, costs, and judgments that may be asserted against Recipient that result from the acts or omissions of Provider and/or Provider's employees, agents, or representatives.
. WARRANTY. Provider shall provide its services and meet its obligations under this Contract in a timely and workmanlike manner, using knowledge and recommendations for performing the services which meet generally acceptable standards in Provider's community and region, and will provide a standard of care equal to, or superior to, care used by service providers similar to Provider on similar projects.
. DEFAULT. The occurrence of any of the following shall constitute a material default under this Contract:
| a. | The failure to make a required payment when due. |
| b. | The insolvency or bankruptcy of either party. |
| c. | The subjection of any of either party's property to any levy, seizure, general assignment for the benefit of creditors, application or sale for or by any creditor or government agency. |
| d. | The failure to make available or deliver the Services in the time and manner provided for in this Contract. |
. ATTORNEYS' FEES AND COLLECTION COSTS. If there is dispute relating to any provisions in this Contract, the prevailing party is entitled to, and the non-prevailing party shall pay, the costs and expenses incurred by the prevailing party in the dispute, including but not limited to all out-of-pocket costs of collection, court costs, and reasonable attorney fees and expenses.
. REMEDIES. In addition to any and all other rights a party may have available according to law, if a party defaults by failing to substantially perform any provision, term or condition of this Contract (including without limitation the failure to make a monetary payment when due), the other party may terminate the Contract by providing written notice to the defaulting party. This notice shall describe with sufficient detail the nature of the default. The party receiving such notice shall have days from the effective date of such notice to cure the default(s). Unless waived in writing by a party providing notice, the failure to cure the default(s) within such time period shall result in the automatic termination of this Contract.
. FORCE MAJEURE. If performance of this Contract or any obligation under this Contract is prevented, restricted, or interfered with by causes beyond either party's reasonable control ("Force Majeure"), and if the party unable to carry out its obligations gives the other party prompt written notice of such event, then the obligations of the party invoking this provision shall be suspended to the extent necessary by such event. The term Force Majeure shall include, without limitation, acts of God, fire, explosion, vandalism, storm or other similar occurrence, orders or acts of military or civil authority, or by national emergencies, insurrections, riots, or wars, or strikes, lock-outs, work stoppages or other labor disputes, or supplier failures. The excused party shall use reasonable efforts under the circumstances to avoid or remove such causes of non-performance and shall proceed to perform with reasonable dispatch whenever such causes are removed or ceased. An act or omission shall be deemed within the reasonable control of a party if committed, omitted, or caused by such party, or its employees, officers, agents, or affiliates.
. DISPUTE RESOLUTION. The parties will attempt to resolve any dispute arising out of or relating to this Agreement through friendly negotiations amongst the parties. If the matter is not resolved by negotiation within 30 days, the parties will resolve the dispute using the below Alternative Dispute Resolution (ADR) procedure.
Any controversies or disputes arising out of or relating to this Agreement will be resolved by binding arbitration under the rules of the American Arbitration Association. The arbitrator's award will be final, and judgment may be entered upon it by any court having proper jurisdiction.
. ENTIRE AGREEMENT. This Contract contains the entire agreement of the parties, and there are no other promises or conditions in any other agreement whether oral or written concerning the subject matter of this Contract. This Contract supersedes any prior written or oral agreements between the parties.
. SEVERABILITY. If any provision of this Contract will be held to be invalid or unenforceable for any reason, the remaining provisions will continue to be valid and enforceable. If a court finds that any provision of this Contract is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision will be deemed to be written, construed, and enforced as so limited.
. AMENDMENT. This Contract may be modified, but such modification must clearly demonstrate an agreement by both parties. An email correspondence showing mutual consent to amend the Contract will be sufficient to show that a modification by both parties has occurred.This Contract may be modified or amended in writing by mutual agreement between the parties, if the writing is signed by the party obligated under the amendment.
. GOVERNING LAW. This Contract shall be construed in accordance with the laws of the State of Commonwealth of .
. NOTICE. Any notice or communication required or permitted under this Contract shall be sufficiently given if delivered in person or by certified mail, return receipt requested, to the address set forth in the opening paragraph or to such other address as one party may have furnished to the other in writing.
. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Contract shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Contract.
. ATTORNEY'S FEES TO PREVAILING PARTY. In any action arising hereunder or any separate action pertaining to the validity of this Agreement, the prevailing party shall be awarded reasonable attorney's fees and costs, both in the trial court and on appeal.
. CONSTRUCTION AND INTERPRETATION. The rule requiring construction or interpretation against the drafter is waived. The document shall be deemed as if it were drafted by both parties in a mutual effort.
. ASSIGNMENT. Neither party may assign or transfer this Contract without the prior written consent of the non-assigning party, which approval shall not be unreasonably withheld.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.
Service Recipient:
| By: | Date: |
Service Provider:
| By: | Date: |
EXHIBIT A: DESCRIPTION OF SERVICES
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About Service Agreements
Learn about how to make an agreement wiith a service provider
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What are the common terms in a Service Agreement?
A Service Agreement outlines the terms and conditions under which services from a company will be provided to its client. While the specific terms can vary, here are some of the common terms you may stumble upon when making your own contract and what each of them means:
General provisions
A Service Agreement should include provisions that:
- Make it clear that the document contains the entire agreement of the parties.
- Require any changes to the contract to be in writing and signed by the party affected by the change.
- Preserve the remainder of the contract if one of its provisions is unenforceable.
- Specify which state's laws will govern any disputes between the parties.
Term
The term, or length, of the contract should be clearly stated. Options for the term include: upon the completion of the services, upon a specific event or occurrence, on a specific date, upon written notice by either party, or on some other basis. However, certain provisions of the contract will survive the termination. For example, if the contract includes a confidentiality provision, the provider must continue to keep the recipient's protected information confidential beyond the stated term.
Warranties
The agreement includes an option that allows the provider to provide a warranty that the services provided under the contract will meet the local standard of similar providers in the community. This states a minimum level of performance that the provider must meet to fulfill the terms of the contract. However, it should not be included in the contract if the provider will not provide a specific warranty.
Product ownership
If a product is created as a result of the service, it is important to specify which party will own the rights to the work product. The recipient generally has an expectation to be the owner of any work product resulting from the services. This provision confirms this expectation and obligates the provider to cooperate in documenting the recipient's ownership rights.
Payment
Payment terms vary depending on the services provided and the parties involved. Often, the recipient agrees to pay for the services in a lump sum upon completion of the services. Another option is to pay for the services based on an hourly fee and the number of hours required to complete the services. If the contract is for services to be provided on an ongoing basis, installment payments may be preferred.
Confidentiality
The agreement includes an option that obligates the provider to protect and not disclose the recipient's proprietary or confidential information. "Confidential information" is private information that is unique to a specific business or individual. Additionally, information is confidential if unauthorized disclosure could result in harm to the owner. Some examples of "confidential information" might include customer lists, trade secrets, products, business plans, financial statements, and manufacturing processes.
Breach of contract
If a party to a contract fails to meet its contract obligations, usually to perform an act, deliver prescribed goods, or make a payment by a prescribed deadline, that party is in "breach" or "default" of the contract.
When one party defaults under a contract for the first time, or in a non-material way, that default does not necessarily entitle the non-defaulting party to immediately terminate the contract. Rather, it is recommended that a Notice of Contract Default be given and an opportunity to cure. If, after a reasonable period of time, the problem is not corrected, then a notice of termination may be given.
Still have questions? Don’t worry – you can always ask a Legal Pro.
Service Agreement FAQs
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What should be included in a Service Agreement?
A Service Agreement can include all of the following information:
- Description of the services to be provided.
- Timeline for the provision of the services.
- Payment information, such as how much is to be paid and when.
- The term or length of the contract.
- Work product ownership, if relevant.
- What constitutes a breach of the agreement.
- Information about how disagreements will be resolved.
- Governing law of the agreement.
All of these terms and more are included in the Rocket Lawyer Service Agreement.
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Is a Service Agreement necessary for all types of services?
While not always legally required, a Service Agreement is advisable for any situation where services are being provided to clearly outline the terms and protect the interests of both parties involved in the transaction.
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How do I write a Service Agreement?
The Rocket Lawyer Service Agreement provides a customized document for your needs. You may want to include as detailed a description of the services to be provided as possible. This description could become important should a disagreement arise. Ask a Legal Pro if you have a question about your Service Agreement or one you are being asked to sign.
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Which party should sign a Service Agreement first?
Typically, the party that will be providing the services will sign the Service Agreement first. However, the order in which the contract is signed doesn't particularly matter, unless amendments, or changes, are made to the agreement. Amendments to a contract are usually made before anyone has signed it. You may want to inform the other party of any changes you wish to make, and make sure the changes are made to the contract before signing it. If changes need to be made to a contract that has already been signed, you might consider using a Contract Amendment to make the changes official.
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How can disputes be resolved in a Service Agreement?
Disputes can be resolved through negotiation, mediation, arbitration, or, if necessary, litigation. The Service Agreement can specify the chosen dispute resolution mechanism to better ensure that everything runs smoothly.
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