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Services Agreement (Pro-Supplier)

A Services Agreement sets out the relationship between you, the service provider, and the business receiving the services. Customisable and ready to use in under 10 minutes. This version of the Services Agreement is drafted in favour of the supplier, from a commercial and legal perspective.
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Under 10 minutes
Suitable for Australia
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Document Overview

A Services Agreement can be used if you're a consultant or you run a business. Creating a services agreement is a helpful way to make sure you know exactly what will be provided. This services agreement provides you with a general set of engagement terms and conditions for the provision of consultancy services. Moreover, this agreement ensures that both parties know what to expect and the relationship gets off on the right foot. This version of the services agreement is drafted in favour of the supplier, from a commercial and legal perspective.

Use this Services Agreement if:

  • You would like to receive services from an individual or business; or
  • You would like to provide services from an individual or business.

What does the Services Agreement cover?

  • Performance of the services;
  • Location;
  • Payment;
  • Client's obligations;
  • Intellectual property;
  • Confidentiality;
  • Relevant warranties and indemnities; and
  • Termination.

Other names for Services Agreement include:

  • Consultancy Agreement;
  • Purchaser Agreement;
  • B2B Agreement;
  • Buyers Agreement; and
  • Services Contract.

What’s the difference between a Services Agreement and a:

a) Service Level Agreement?

b) Contractor Agreement?

c) Consultancy Agreement?

Service ‘level’ agreements are different to Services Agreements. A service level agreement outlines the level of service the customer should receive from provider. Usually, such a level is outlined through various performance measurements. Unlike services agreements, they do not regulate how the service is to be provided or delivered. Services agreements instead are contracts between parties focussed on providing a service, they do not necessarily include the level of service required, rather that the service is performed.

A Services Agreement focuses on the performance of services by the provider to a third party. The agreement is often wider than a contractors agreement because the agreement usually sets out the rights and obligations provided by between the two parties. A contractor agreement on the other hand will be more job specific, often these contracts have specific terms for the work being completed and include set periods of time, payment and service. Both agreements can be implemented between both businesses and individuals.

A Services Agreement is also different to a consultancy agreement. Consultancy agreements are used specifically for professional consulting services and therefore include specific clauses surrounding the rights and obligations of professional services provided. They are like services agreements but are tailored to the service provided by a consultant to a client.

Is a Services Agreement legally binding?

A Services Agreement is a contract between two parties, so yes it is legally binding. If the Services Agreement is not performed as promised, it will be likely the agreement is breached. Essentially, it sets out the terms of service agreed to between the parties in writing so each party understands their rights and obligations.

What can I do if my Services Agreement has been breached?

It will be important to determine where the breach has occurred. Once this is understood, it is generally best for both parties come to a compromise. This might be by way of completing the services differently or according to a revised schedule, compensation for damage incurred or a refund for work. In some cases where a services agreement is breached it may be best to obtain legal advice. Where a compromise cannot be reached between the parties or irrevocable damage has occurred is may be best to engage with a lawyer to determine which party is in the wrong or whether an amicable outcome is possible.

How does a Services Agreement deal with liability?

A Services agreement will outline obligations by both parties to the contract, if either party breaches the agreement they may be liable. Depending on the agreement, it will therefore limit or impose liability on either party. Services agreements may include clauses that reduce liability on the half of the provider where damage is incurred. For example, suppliers may enforce ‘exclusion clauses’ to exclude implied warranties, liability for consequential losses based on their services or liability to replace goods or services where a warranty is breached. Besides this, a services agreement may also include a ‘defect liability period’ which enforces the period of time which a customer can argue there is a defect with the product or service. Ultimately, there are many different ways a services agreement may deal with liability.

Who generally owns the intellectual property between a client and contractor?

Generally, intellectual property created by an individual will be owned by them, unless the rights are assigned through some sort of agreement. Therefore, where an independent contractor does work for a client, the intellectual property will be held by them unless the rights are assigned to the client through a written agreement. Most contractor agreements will include provisions assigning applicable intellectual property to the receiver of the service for privacy purposes.

How does a Services Agreement cover insurance, tax and super?

The insurance, tax and super obligations of both parties for the activities to be performed should be covered in the Services Agreement. For best practice each party should be responsible for taking care of their own separate liabilities. Some key terms related to tax that maybe seen in Services Agreements include; taxable supply, tax invoice, services tax & GST. These tax obligations should in line with the Australian Taxation Office guidelines and regulations. No written notice and a failure to act in accordance with the terms may lead to negligence on the parties' behalf.

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