Looking for an experienced commercial lawyer to review or draft your Service Agreement?

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Service Agreement

Need a Service Agreement for your business?

There are two distinct types of Service Agreement.  Those which protect the interests of your business when you hire a service provider and those which are the key terms of trade for your own services.

Our commercial lawyers can assist you by:

  • Drafting the right type of Service Agreement for your business needs.
  • Reviewing agreements which have been provided to you.
  • Advising you about the contractual obligations, which often extend beyond simply performing the service, including restraints on trade, obligations of confidence and privacy.
  • Implementing appropriate payment terms and dispute resolution provisions where payments are not made.
  • Ensuring the limits of liability are suitable in the circumstances.
  • Ensuring your Service Agreement complies with the Australian Consumer Law.

Where are Service Agreements used?

Service Agreements are also used by businesses when they engage another. All businesses large or small will enter into a Service Agreement at some stage, be that startups which are hiring freelancers or large multinationals engaging in outsourcing.

Mature businesses will often have a master service agreement. These endeavour to operate as a standard framework agreement for a broad range of engagements.

Service Agreements are the main terms of trade for service-oriented businesses such as:

  • Consultants.
  • Software developers, managed service providers and other IT professionals.
  • Any entity working with intellectual property such as authors, photographers or graphic designers.
  • Professionals including accountants, lawyers and engineers.

What terms should be included?

Service Agreements are a broad category of legal documents. There is no one size fits all approach.

That said it is common for companies to have a standard, or Master Services Agreement, which is used when they enter into relatively small transactions. These are often large and complex documents. If presented with a Master Services Agreement you should be careful to ensure it suits the services you are providing. It is not uncommon for these sorts of agreements to have broad clauses relating to intellectual property, which are often unsuitable for many tech service providers. The moral of the story is, ensure you have these agreements reviewed by someone who understands your industry.

Perhaps more important than the legal clauses, is the clear expression of the transaction and the requirements of the parties. It is this clear expression which ensures both are aware of their obligations and share the same perspective on what is to be delivered.

While Service Agreements are quite variable in their contents, some key terms which are regularly included relate to:

  • Obligations of confidence, to pick up where your Confidentiality Agreement left off.
  • The payment of fees, expenses and other outlays.
  • Ownership or transfer of Intellectual Property rights.
  • Limitations on liability (to the extent permittable under the Australian Consumer Law).
  • Indemnities, including indemnities relating to employee entitlements. People often do not realise that Superannuation may have to be paid to certain types of contractors, even those with an ABN.
  • Restraints and exclusivity clauses.
  • Rights to subcontract.
  • Dispute resolution clauses, which endeavour to provide a mechanism for parties to address disagreements, without resorting to the courts.

Why do I need a good Service Agreement?

A well-documented contract provides a range of benefits well beyond the typical legal protection most people consider.

Consider the following:

  • Service Agreements are a tool for communicating and negotiating the obligations and expectations of each party. By engaging a lawyer, you are asking a third party to understand your transaction and document it.
  • Service Agreements help to reduce disputes and the risk of one party taking legal action against another. Referring back to the Service Agreement is an appeal to high authority. If you can point to the term or condition which the other party agreed to they are more likely to fulfil that obligation.
  • A good contract portrays your business as professional and well established. You would not hand over a business card written in pen on a hand cut piece of A4 paper, so why would you hand over a flimsy Service Agreement.
  • A good Service Agreement will comply with the Australian Consumer Law (ACL). Many DIY contract drafters make the mistake of taking clauses from US contracts which are often illegal in Australia. Regularly they PURPORT TO EXCLUDE ALL WARRANTIES AND GUARANTEES INCLUDING THE CONSUMER GUARANTEES CONTAINED IN THE ACL. Typing in capital letters does not allow you to avoid Australian law.

We know tech.

Are you looking for an IT Lawyer that knows tech? Today almost every business is a technology business. Even if you are not on the cutting edge of innovation you are probably entering into business relationships with people who are. If you are not you should be. Helping businesses thrive and reducing transaction costs is at the very heart of any real IT Lawyer.

We know business.

Need a software development lawyer, with IT, business and accounting qualifications? One who spent over a decade running their own management consulting firm? The sort of commercial lawyer that can translate IT to business, business to law and law back to IT? Contact us today and speak to a multi-disciplinary commercial lawyer.

They say good fences make good neighbours.

A good Service Agreement can help enshrine a positive and mutually beneficial relationship between provider and consumer. Avoid disputes and prosper together!

Need assistance drafting, reviewing or understanding a Service Agreement?

Contact us for an obligation free quote or just to discuss your business venture.

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