20 JUNE 2018

5 Things to Do Before Signing a Services Agreement

So you are looking for a free template of a service agreement contract because your business is about to do a simple deal.

Are you prepared to enter into a contract that is legally enforceable under Malaysian law? A services agreement is more than an offhand business document. It sets the stage for a business partnership that may impact your business for years to come.

Whether you are a new business or an old hat, every services agreement or contract should cover a few key areas. With the basic points made clear, this document can be a powerful tool for protecting your business.

Here are 5 things to do before signing a services agreement.

1. Detail the Services

With a services agreement, the fastest way to go wrong is to leave out details.

This business document should be written so precisely that there is zero room for arguments. Every service should be described in full detail. Any confusion at this point in the negotiation process should be hammered out before moving forward.

If your business is hiring a writer the contract should cover details about every kind of content. For example, website content, blogging, SEO services, images, technical content, marketing, etc. should all be outlined. Don’t use umbrella terms like “writing services”. Be specific.

2. Agree on Payment Terms

In a services agreement, lay out the terms of payment in high detail.

Whether you are a freelancer or a company contracting out for IT, the payment details will affect your monthly billing cycles. The wording of the contract will be important for your business accounting.

Make sure you have stated the amount, the manner, and the required date of regular payment.

Stipulate what happens if payment arrives late or not at all. If services are dependent on the receipt of payment, say so.

3. Consider Liability

Who is responsible for the outcomes of this agreement?

First off, ensure that the other party to the contract is who you were expecting. Make sure the work subcontract permission are clear.

Next, decide if there is a limit to either party’s liability.

For the company hiring a writer, what happens if something the writer published online caused a financial loss? What if the company perceived that a blog post had a negative affect but the writer didn’t agree? Would the writer be responsible or would the company’s website manager take the hit?

Remember, liability clauses can be written to protect both parties.

4. Double-Check the Timeline & Termination

Put a time limit on your services agreement. This might sound counter-intuitive to building long-lasting relationship, but actually it's smart.

Time limits let both parties know how long they are responsible for the service.

In the real world, this gives partners the ability to create a working calendar together and provide the best service possible.

Besides, contracts are renewable. Start small and then sign a longer contract later. This reduces risk and helps both parties settle into the new relationship.

Don’t forget to write a clear-cut explanation of when and why it might be appropriate to terminate the contract early.

5. Read the Contract!

Never sign a services agreement contract before reading every single word.

Even with simple services agreements, these contracts are legally binding.

So before you sign your name on the line, sit down with the other party to the contract and make sure everybody is in agreement.

Catch discrepancies early and edit the contract until both parties are happy. Then sign.

You'll not only set the foundation for a solid working relationship, but you'll have peace of mind with your new partner.

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