Service agreements are essential for small businesses to protect themselves from future disputes. A well-drafted contract outlines expectations and responsibilities for both parties, helping avoid misunderstandings.
Clear scope of services
One of the most important parts of a service agreement is a clear description of the services provided. This ensures both the business and the client understand exactly what work the business will do. Be specific about deadlines, deliverables, and the quality of work expected. This can prevent disagreements over whether the business completed the job as promised.
Payment terms
Clearly state the payment terms in the contract. Include the total cost, payment schedule, and methods of payment accepted. Be sure to outline what happens if one party misses or has late payments. Late fees, interest, and possible termination of the agreement should be in the agreement to protect your business.
Termination clause
A termination clause explains how either party can end the contract. This is important to protect your business if the client becomes difficult or fails to meet their obligations. Make sure to specify the conditions under which you can terminate the agreement and any penalties for early termination.
Dispute resolution process
Including a dispute resolution process can save time and money if a disagreement arises. Specify how you want to handle disputes, such as through mediation or arbitration, rather than immediately going to court. This helps resolve issues quickly and keeps legal costs down.
Confidentiality and intellectual property
To protect your business, include a confidentiality clause to ensure that sensitive information isn’t shared. If intellectual property (IP) gets created during the service, the agreement should clarify who owns the IP rights.
