Marilyn Ries June 18, 2019 Service Agreement
The service agreement should include a statement of work, which identifies the project’s scope and the respective responsibilities of you and your client. Oftentimes, if conflict arises it’s because the scope wasn’t properly defined, which led you and your client to interpret scope differently. Watch out for scope creep!
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.
Generally, the service provider provides a service or services to the principal for a fee and may also be reimbursed for pre-agreed out of pocket expenses. These amounts, and any limits that may apply, should be clearly specified or otherwise a way of calculating the relevant amounts should be included in the service agreement.
There should be a clear mechanism for addressing how deliverables will be tested and accepted. Acceptance should be tied to the objective specifications, so that a failure to meet those specifications is the only basis for rejecting a deliverable. The customer should have a limited period in which to reject a deliverable, and should have to give detailed reasons for any rejection. If the customer does not reject a deliverable within the applicable period, the deliverable should be deemed accepted.