What is a Services Agreement
Learn about services agreement and how it can limit your risk in the event of providing or soliciting services to another.
What is a Services Agreement?
Providing or soliciting services is commonly done through a handshake and an oral agreement. After lunch and a coffee, I feel that John is trustworthy, and know that he will honour the conditions we had a chat about (for a very good price, I might add). Making him sign an agreement might tarnish our relationship, and I don’t want to take that risk.
Not entering into a Services Agreement, however, is the riskier alternative. A Services Agreement protects you AND the other party, essentially improving your professional relationship. It clearly sets out the rights and obligations of both parties, along with clear terms of the agreement to prevent any potential disputes from arising.
What does a Services Agreement usually cover?
1. Key dates
When you provide or solicit a service, you would want to clearly define when the services start and finish. Getting something done “within the next week or so” just doesn’t cut it.
2. Rights and obligations
Both parties would want to clearly know under what circumstances can there be a rejection and alteration of the services, and the importance of notifying the other party. Further, if there is sensitive information involved in the provision of the services, you would want to maintain confidentiality, requiring the other party to disclose and seek approval before engaging outside help. Nan wouldn’t like her secret pasta sauce recipe falling into the wrong hands!
Payment terms detail the consideration, time and method of payment for the services. There is no way we can overstate the importance of a payment clause.
4. IP rights
A service provider gaining access to your IP is usually incidental to providing the services. Having an IP clause ensures that the service provider indemnifies you for any breach of your IP rights, or any other party’s claim for a breach, when performing the services.
If the other party breaches a term of the agreement, you would want to be able to terminate the agreement. Clearly setting out the reasons that allow for a termination ensures that both parties understand what their rights and obligations are.
Non-solicitation clauses ensure that the party providing the services does not solicit your clients and/or personnel when they are providing the services, and for a reasonable period after.
7. Liability and waivers
A liability clause limits the service recipient’s liability only to outstanding payments for the services. A waiver clause expressly states that any waiver of a right, power or remedy must be in writing and signed, ensuring that there can be no waivers claimed otherwise, protecting both parties’ rights.
What if I am engaging a consultant? Is that considered a service?
It sure is! Better yet, LawPath has a Consultancy Agreement specifically catered to consultancy services.
If you are ready to engage or provide a service, start customising your LawPath International Services Agreement, Services Agreement (Supply to a Customer), Services Agreement, or Consultancy Agreement!
Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.
Dominic is the CEO of Lawpath, dedicating his days to making legal easier, faster and more accessible to businesses. Dominic is a recognised thought-leader in Australian legal disruption, and was recognised as a winner of the 2015 Australian Legal Innovation Index.