Glossary and Definitions
Contracting Agreement (USA)
A Service Agreement is a legal contract between an employer and an individual or corporation hired to do a specific task. Depending on the type of contract and the task being performed, this agreement may also be called a Consulting Agreement, Contracting Agreement, Freelancing Agreement, Supply Agreement, Management Contract, Details of Service, Service Schedule, etc, although these are all basically the same document. The main purpose of a Service Agreement is to document the complete details of a business relationship so the expectations of both parties are clear and there are no misunderstandings between them. A well-written Service Agreement provides a good starting point for a productive and problem-free business agreement, as it will force both parties to address where they stand on a number of current and future issues.
There are several important details that a Service Agreement should include. These are most applicable for those managing ongoing supplies or services for a larger business; however, smaller companies or self-employed persons like freelancers may wish to leave out certain details to allow more flexibility. Generally, more detailed contracts are required for services involving finances, services involving high liabilities (e.g. safety, environmental, etc), and services that tend to be highly regulated such as healthcare and childcare. A Service Agreement commonly includes:
- The full contact information of both parties
- The date of the agreement
- A description of the services being provided
- The place and time that the services will be provided
- The time period of the Service Agreement
- The cost for the services
- Responsibilities of the service provider
- Responsibilities of the employer
- Any confidentiality clauses
- Dispute resolution processes
- Provisions describing the renegotiations or renewal of the contract, if desired
- Governing jurisdiction
- Signatures, along with a notary signature or witness signature if desired.
An employer may write a Service Agreement themselves, hire a lawyer to assist them with drafting the document, or use a template form. There are several reasonably-priced, fully customizable template forms available online. To find out more about creating a Service Agreement, see below.