In most cases, you probably do not read the fine print of the service agreements, in which you enter. As a small business owner, there’s the very likelihood that you’ll have put together your own service agreement for customers who do business with you. When doing so, you want to make certain that the agreement is not only relatively easy to follow, but that it also holds up to any potential legal challenges, if there is a dispute. While you may be trying to save yourself both time and money by drawing up the agreement on your own, it would be unwise to presume that you’ve covered everything. With that said, having someone familiar with these types of agreements, preferably a lawyer, to review it is a good safeguard for your business. Otherwise, you could be opening the door to some legal headaches.
When creating a standard service agreement for potential clients, there are some basics aspects to keep in mind.
Even if you have a firm grasp of service agreements and the language used in them, it is recommended that you have a lawyer review any agreement you draw up. He or she should be checking to see that the language is not only correct, but also easily understood by the other party. If it is too difficult to comprehend, the client could later say they did not understand all the written terms, and hence hold up payment for the completed work. You could challenge it, holding them liable, but a court — if it were to come to that — may side with the other party if the court decides you constructed the agreement in a way where it is too difficult to understand.
Lastly, take a look at some online and offline service agreement examples to have a better understanding of how they are constructed. While you want your service agreement to be original, having a model to follow can help you better craft the language for your own needs.
Make sure the payment details in your service agreement are clear and concise. Clearly note when payments are expected, how much is expected by a certain time, and if there are any potential penalties for late payments. Also, clearly spell out who the responsible person or party is that should compensate you.
In the event you want the service agreement information to remain confidential, make sure you have outlined some exclusivity terms. You also may desire to have a no-compete clause included. This protects not only sensitive business information from public view, but also from any competitors. As for the no-compete clause, you may want to restrict someone from working with a direct competitor of your small business for a period of time.
Writing up a terms-of-service agreement is not rocket science. On the other hand, it does require time and attention. Not giving it careful consideration and due diligence leaves the door open for potential problems, which can become costly and time-consuming to fix.
This article was written by Dave Thomas for Small Business Pulse