WHAT IS A SERVICE AGREEMENT? 

A Service Agreement is a written document that explains and outlines the terms and conditions that the service provider and customer agree to be governed by. The agreement emphasized the specific services that will be provided and the manner in which the services will be performed by the service provider. A service agreement binds both parties not just one party.

WHEN DO YOU NEED A SERVICE AGREEMENT?

A Service Agreement is needed when you want to hire someone to perform a specific act or service. Examples of service agreements include:  hiring someone to pave your driveway or to cut down a tree in your yard. The service performed is usually very specific and will not require frequent repetition. There are professional services that may necessitate the creation of a service agreement. For instance: hiring an auditor or CPA to render services for your business.

WHAT IS A SERVICE AGREEMENT?

A Service Agreement should include the following:

• The names and information of the parties.

• The effective date and duration of the service agreement.

• A statement explaining the services to be provided along with the expected frequency and scheduling of the services if it cannot be completed within a single time frame. For example, a lawn care service agreement may state that the service provider will mow the lawn twice a week and trim the edges once a week during the summer months.

• A detailed statement regarding the compensation that will be paid for the services including interim caps that will prevent a customer from walking away from a service provider who has provided numerous hours of service without paying.

• A statement as to what classification or category will be performing the services. This is especially important in the professional and healthcare service agreements. If the customer requires the services of a registered nurse, then the service agreement should specifically state that the service must be performed by a registered nurse, not a nurse’s aide or licensed practical nurse.

• A statement as to how the service will be monitored or supervised and by whom.

• Information regarding termination of the service agreement and consequences for termination.

• Information explaining the manner in which disputes and terminations will be addressed.

•  A detailed statement regarding the rights of ownership for all services provided.