Many of us are guilty of signing off on a service agreement without even reading the fine print. Although it may be ignored by some, it is critical that any service agreement associated with your company is relatively easy to comprehend and holds up to any potential legal challenges. As a small business owner, there is a strong likelihood you will be responsible for constructing your own service agreement for doing business with your customers.
While you may be trying to save both time and money by drawing up an agreement on your own, it would be unwise to presume that you’ve covered everything needed. To safeguard your company and avoid opening any doors to legal headaches it is best to work with an attorney. A lawyer familiar with your business should review any service agreement before using with potential clients. Small business owners should keep these aspects in mind when creating a service agreement for their company.
Language
Even if you have a firm grasp of service agreements and understand how to word one properly, it is still recommended that a lawyer review any agreement drawn up. A lawyer will make sure that the language used is not only correct, but also easily understood by other parties. If your service agreements is not clear, a client could later argue that the written terms were not understood, which could hold up payment for completed work. You could challenge it and hold them liable, but a court, if it were to come to that, may side with your client ruling that you constructed an agreement 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.
Payments
Make sure the payment details in your service agreements are clear and concise. Definitively note when payments are expected, the amount, and by what specific time payment is due. Be sure to include if there are any potential penalties for late payments. It should also be clearly spelled out who is responsible for the payment and how to address it.
Exclusivity
In the event that you want your service agreement information to remain confidential, make sure you have outlined some exclusivity terms. You may want to include a no-compete clause, which will protect against any of your sensitive business information from becoming public, as well as being viewed by any of your competitors. It can also restrict someone from working with a direct competitor of your small business for a period of time.
Writing up a terms of service agreement on your own is not inconceivable. On the other hand, it does require much time and attention. Not giving it careful consideration and due diligence will leave the door open for potential problems, which can incur greater time-consumption and costs to fix.