Josephine Seibert June 9, 2019 Service Agreement
An indemnity is a contractual obligation by one party to be responsible for certain loss, damage or liability incurred by the other party. Indemnities are often heavily negotiated, and as matter of course the service provider should try give as few indemnities as possible (the customer will always be able to try to sue at common law for losses suffered even if there is no indemnity). Try to limit any indemnity that the service provider does give by carving out liability arising from the customer’s own negligence or intentional misconduct.
Make sure that your form service agreement is as favorable to your company as possible and accurately reflects your company’s objectives. Note that the purpose of your service agreement is to have a form document (sometimes referred to as a boilerplate document) that your company can use on a regular basis every time it takes on a new client.
Businesses often use MSAs to help make contract negotiations simpler. This agreement lets both companies spend their time discussing the terms of the deal. Then, they can proceed with the work outlined in the agreement. If you don`t have an MSA, the customers and the company can still work through issues, but there are big concerns that might derail the contract. Having an MSA before having a specific contract lets companies focus on what their particular contractual issues are, such as the time frame and the price, for when the contract actually arises.
The insurance, taxation and superannuation obligations of the parties must be specified. Generally you want each party to take care of these themselves. It is highly recommended that parties agree and document the terms and conditions of their relationship in a service agreement before the service provider starts to provide the services to the principal in order to minimise the risk of disagreements down the track.