A service agreement is a written contract between a service provider and a client. It spells out the work to be performed and the responsibilities of both parties in getting the work done and paid for. Either party can be an individual or an organization. Service Agreement can be used for a single project, a job that terminates on a specific date, or a work that is going on.
Do’s:
- Requirements: For starting any work requirement is the utmost important feature in the contract as it defines the base for the contract i.e. what the project demands from the person with whom the developer is going to sign the said contract. In order to avoid confusion and misunderstanding in the future the requirements of the agreement should be well stated.
- Define Communication Channel: For the successful and effective completion of the project it is necessary that the communication methods are well defined whether the second party is living in the same city or from different city. Non effective communication leads to various loopholes in the upcoming project.
- State Intellectual Property Rights: Intellectual Property Right means the ownership rights of the product you create. To avoid future litigation on ownership rights it’s important to include IP rights in the Agreement before signing it.
- Define deadlines and work intervals: In order to complete the project on time it is necessary to well define the time limit and work intervals on which the project should be completed upto that task associated with it. For example if a contract is done for developing a software it must ensure that by what time the software will be ready for use.
- Payment Terms: Do explain the conditions of payment i.e. at what regular intervals it is required to be paid for the smooth functioning and timely completion of the project. The mentioned terms of payment will protect the developer from fraudulent activities and future disputes.
Don’ts:
- Don’t ignore the possibility of complication: It is next to impossible that there will be no complication in the overall project so it is necessary to incorporate such acts in the contract which may arise by specifically using If and Then in the situations i.e. that if these circumstances arises then developer will do such things.
- Don’t Leave it unanswered: Don’t assume anything which is not stated in the contract because it will not serve the purpose of contract. Explain all the content and clauses of contract for better understanding.
- Don’t use vague, ambiguous words: Avoid using words that have more than one meaning, or make it difficult to understand the actual meaning. Instead of that use words that are easy to understand.
To sum up, the do’s and don’ts mentioned above are the general guidelines for making a good and enforceable contract. However, every case carries different situation so it is necessary to seek legal advice from the experts for effective enforceability of the agreement as well as to avoid disputes.
-Surbhi Singla
Associate at Aggarwals & Associates, Mohali.
