Services Agreement: Definition, Top Terms to Know

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What Is a Services Agreement?

A services agreement is a written contract between a service provider and a client. Also known as a service contract or a general services agreement, this document is legally binding and provides some level of protection for both the provider and the client.

This type of contract lists the services that the provider will perform and details the time frame and compensation for the project. Most service contracts also list the rights and requirements of both parties, including liabilities and confidentiality guidelines. Many also discuss dispute resolution in case either party breaches the contract.

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When Do You Need a Services Agreement?

You can prepare a services agreement any time your firm provides services to another organization or when you contract another person or business to provide services for your organization. Services agreements can apply to either one-time deliverables during a limited time frame or ongoing partnerships over a long period of time.

No matter what your services agreement covers, you should always sign one before any consulting or other services commence. When you take the time to prepare a mutually beneficial services agreement in advance, you can set expectations and ensure protections for both parties.

What Is a Service Provider?

You may also refer to service providers as contractors or freelancers. They can provide almost any kind of intangible deliverables, from unskilled labor to high-level consulting. Although this label can apply to a wide range of professionals, some common examples of service providers include:

What Goes Into a Services Agreement?

No matter how customized a services agreement is, it typically includes standard information:

How Do You Create a Services Agreement?

To develop a services agreement, follow these seven steps:

  1. State the service provider and client. Take care to list the legal names and include the mailing addresses for all parties involved.
  2. List the services included. In the main body of the agreement, state the nature of the services concisely. In an attached schedule, describe the scope of the work and mention any deliverables.
  3. State the compensation amount and outline the schedule. Along with the payment amount, include payment dates or frequencies.
  4. Clarify which party retains ownership. Whether the services include physical goods or intellectual property (IP), state whether the service provider or the client assumes ownership.
  5. Include any confidentiality or competition terms. If the client requires the service provider to refrain from discussing the project or working with competitors, state any guidelines the provider must follow.
  6. List any applicable indemnity or liability limitations. Include any insurance requirements.
  7. Execute the agreement. Once both parties agree to the terms and sign the contract, the services agreement becomes legally binding.

Services agreement

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Do You Need a Lawyer for a Services Agreement?

Whether you need to change a few details on a standard services agreement or you'd prefer to develop a completely custom contract, it's always important to have an attorney create the document . When you contract a lawyer to assist with your legal needs, you can get several important benefits:

What Legal Considerations Apply to a Services Agreement?

Before signing a services agreement, it's important to understand what the contract means for you or your business. Keep these standard legal considerations in mind:

What Other Agreements Do Contractors or Freelancers Need?

Whether you're a contractor or your business needs to contract a freelancer, you may need several agreements to ensure your organization runs smoothly. Standard agreements for contractors and service providers include:

Whether you're a service provider or you need to contract a freelancer, the ContractsCounsel team can help you protect your business with a legally binding agreement. Receive a free proposal and get a services agreement that meets your organization's unique needs.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.