Services Agreement

Services Agreement

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4.4 (176)
Under 10 minutes
Under 10 minutes
Last updated December 2018
Last updated September 21, 2021
Suitable for all Australian states and territories
Suitable for all Australian states and territories

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.

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Document Overview

A Services Agreement sets out the terms and conditions between you as the service provider and the recipient of your services. If your business is providing services, or you are looking to provide services to another entity, you need to set out the terms and conditions of those services. A Services Agreement sets out, in writing, terms including the services to be provided, how and when the services will be provided, and payment details regarding the services. It can also help prevent disputes arising throughout the term of the entire agreement as an early for of dispute resolution.

Use this Services Agreement if:

  • You would like to provide services to another entity; or
  • You would like to receive services from another entity.

What does the Services Agreement cover?

  • Provision of services/service delivery;
  • Materials;
  • Timing;
  • Pricing;
  • Payment, Fees & Expenses;
  • Warranty, alterations and rejection of services;
  • Confidentiality / Confidential Information (prevent reverse engineering);
  • Copyright and intellectual property rights (ie. logos, licenses);
  • Protection of personal information
  • Non-solicitation of personnel and clients;
  • Limitation of liability and waivers;
  • Insurance, tax and super obligations of both parties
  • Mediation; and
  • Termination for provider and recipient.

Other names for Services Agreement include:

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

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

a) Service Level Agreement?

b) Contractor Agreement?

c) Consultancy Agreement?

Service ‘level’ agreements are different to Service 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 Service Agreements, they do not regulate how the service is to be provided or delivered. Service Agreements instead are contracts between parties focussed on the providing of a service, they do not necessarily include the level of service required, rather that the service is performed.

A Service 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 Service 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 Service Agreements but are tailored to the service provided by a consultant to a client.

Is a Service Agreement legally binding?

A Service Agreement is a contract between two parties, so yes it is legally binding. If the Service 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 Service Agreement has been breached?

Unless force majeure - unforeseeable circumstances preventing contract terms being met - has occurred and reasonable effort is deemed. It will be important to determine where the breach has occurred. Once this is understood, it is generally better that both parties come to an alternative agreement as to the steps forward. This might be in the way of completing of services differently, in a different time period, compensation for damage incurred or a refund for work. In some cases where a Service 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 Service Agreement deal with liability?

A Service Agreement will outline obligations by both parties to the contract, if either party breaches the agreement they may be liable. Depending on the agreement, a service contract will therefore limit or impose liability on either party. Service contracts 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, the Service 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 Service 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 Service 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 Service 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 Service 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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