Services Agreement (Pro-Supplier)

Is the Services Agreement a legal document? 

Yes, a services agreement is a legal document. It is a formal contract between the parties involved, outlining the terms, conditions, rights, and obligations related to the services being provided. 

Once both parties agree to the terms and sign the agreement, it becomes legally binding, meaning that both parties are obligated to adhere to the terms and can seek legal remedies in case of a breach or dispute. 

It's important for a services agreement to be well-drafted and comprehensive to ensure that all aspects of the arrangement are clearly defined and enforceable under the law.

What’s the difference between a Services Agreement and a Service Level Agreement?

A Service Level Agreement outlines the level of service the customer should receive from the provider. 

Usually, such a level is outlined through various performance measurements. Unlike Services Agreements, they do not regulate how the service is to be provided or delivered. Services Agreements instead are contracts between parties focussed on providing a service; they do not necessarily include the level of service required, but rather that the service is performed.

Contractor Agreement?

A contractor agreement is more job-specific; often, these contracts have specific terms for the work being completed and include set periods of time, payment and service.

Consultancy Agreement?

Consultancy Agreements are similar to Services Agreements; the term may be used interchangeably with Services Agreement or Contractor Agreement.

What can I do if my Services Agreement has been breached?

Firstly, it is important to determine where the breach has occurred. Once this is understood, it is generally best for both parties to come to a compromise. This might be by way of completing the services differently or according to a revised schedule, compensation for damage incurred, or a refund for work.

Where a compromise cannot be reached between the parties or irrevocable damage has occurred, it may be best to engage with a lawyer to determine which party is in the wrong, whether an amicable outcome is possible, or to receive advice on court proceedings in the jurisdiction specified in the agreement.

How does a Services Agreement deal with liability?

A Services Agreement will outline obligations by both parties to the contract. If either party breaches the agreement, they may be liable for damages. Services agreements may include clauses that reduce liability on the half of the provider where damage is incurred.

For example, suppliers may enforce ‘exclusion clauses’ to exclude implied warranties, liability for consequential losses based on their services, or liability to replace goods or services where a warranty is breached. Ultimately, there are many different ways a services agreement may deal with liability.

How to terminate a Services Agreement? 

To terminate a services agreement, you need to review the agreement's termination provisions and notice requirements. Provide written notice to the other party, adhering to any specified notice period. 

Once done, fulfil any conditions or obligations outlined in the agreement for termination and address outstanding payments, and discuss a smooth transition plan if needed. Confirm the termination in writing, retain records, and consider legal guidance to ensure proper procedure and compliance with the agreement and applicable laws.

How does intellectual property work in a Services Agreement?

In a services agreement, provisions establish ownership, usage rights, and confidentiality for any IP created during the service. It outlines whether the client or service provider owns the IP, usage permissions, protection of sensitive information, potential royalties, and dispute resolution methods. Clear IP terms prevent conflicts and define how creations are used, benefiting both parties.

How does a Services Agreement cover tax?

Some key provisions related to tax that may be seen in Services Agreements cover taxable supply, tax invoices, services tax & GST. Any tax obligations should be in line with the guidelines and regulations.

What are the other names for the Services Agreement? 

• Consultancy Agreement;
• Purchaser Agreement;
• B2B Agreement;
• Buyers Agreement; and
• Services Contract.

Other documents you may need:

• Services Agreement (Supply to a Customer)
• International Services Agreement