Key Aspects of Services Contracts
Running a business is a tough job and one that requires you to stay up to speed with every aspect of your operations. However, any good owner knows this is impossible to do on their own, which is why they surround themselves with partners, employees, vendors, and advisors who can get them where they need to go.
The foundation of many of these relationships are contracts which help hold both parties responsible, and among these, well-drafted services contracts may be one of the most important. Like everything else you do for your company, it’s also up to you to get the help you need for drafting these.
If you’re looking for professional legal advice for contracts, reach out to us at Adelman Law, P.C.
Elements of a Services Contract
Business services contracts govern the agreements made between a client or self-employed worker and you, the service provider. These contracts should include language that outlines the scope of work to be completed, the terms of the agreement, and the conditions under which the work will be done.
As with any business contract, it’s essential these are reviewed by a qualified business attorney who can ensure your interests are represented and the contract is legally binding. Other elements of a service contract include:
Compensation including the payment schedule and any fees
How the contract can be terminated or renewed
Steps to take should a dispute arise or one party breaches their side of the contract
When the work will commence and when it should be completed by
A detailed description of the work to be done
The names and roles of other parties involved in the contract
Confidentiality clauses, as applicable
Tailoring Services Contracts to Your Business Needs
No two businesses are the same, and because of this, your service contracts should be uniquely tailored to your needs and goals. The best way to do this is by hiring an attorney you can trust and forming a long-term legal partnership for contracts. Ideally, you’ll want someone whom you can go to throughout the duration of the contract as well as someone who thoroughly understands your business needs and can help you with contracts in the future.
Drafting Effective Services Contracts
An effective service contract should meet the needs of both parties and be detailed enough to protect against potential disputes while also clearly defining each party’s role. Customized business contracts should be written and reviewed by a professional at all times.
Enforcing Services Contracts
In a perfect world, all contracted work would be completed just the way we want and in accordance with the terms of the contract. Unfortunately, this is not always be the case, so you will have to prepare to enforce your contact when needed. One of the benefits of legal expertise is that you have a partner who can help you navigate these concerns, which can expedite resolution:
Breach of contract remedies: Hopefully, the contract contains language that outlines dispute resolution. This could be through mediation, arbitration, or litigation, and choosing the right path is not always the easiest decision.
Evidence collection and documentation: Documentation is key for any dispute resolution. Unless you can point to clear evidence and language in the contract, you may not have a strong case and your contract may be unenforceable.
Seeking remedies and damages: If you are not able to resolve the dispute with the help of your attorney, you may need to pursue legal action. Although this is not ideal, working with legal counsel from the beginning can help you prepare for contract disputes and better position yourself for litigation.
Common Mistakes to Avoid in Services Contracts
Avoiding contract ambiguity: If you fail to define expectations and then one party breaches the contract, you may not have legal standing to address the damages and will be less likely to ultimately be compensated.
Neglecting to address intellectual property in contracts: Intellectual property issues are most important if you contract with a creative worker such as a graphic designer, photographer, or artist. Language must be included that states who will own the final work.
Overlooking termination and renewal clauses: Termination clauses in contracts set up clear expectations for both parties that include penalties should either find it necessary to terminate the work.
Ignoring jurisdiction and governing law considerations: Depending on the nature of your contract, there may be different laws that dictate what should and can be included. Legal compliance in contracts is the single most important factor since the strength of your business is only as strong as the contracts that hold it together.
Relying on template contracts: Boilerplate service contract forms can be found online, and while these may work as a starting place, they should never be the only resource you draw from. If you do use one of these and amend it, make sure the final contract is reviewed by your lawyer before signing anything.
Knowledgeable Legal Counsel
If you run a business or own a company and would like to meet with an experienced business law attorney to discuss your concerns and questions about service contracts, contact us at Adelman Law, P.C. today.