Service Agreement

The Service Agreement is a business contract that aims to formalize the relationship between a company, in this case a service provider, and its client. This contract aims to frame the rights and obligations of both parties.

Many companies have recourse to service providers in return for an agreed price. Whether it is a question of computer maintenance services, collective catering services for companies, cleaning services, security services… The variety of situations means that there is no standard service provision contract. It is therefore important to download a model that can be adapted and modified according to your needs or even in some cases to call upon the services of a lawyer specialized in its drafting.

Note that when you are selling a product and not a service, the Sales Contract should be used.

A service agreement is a business contract, just like a subcontracting agreement. In concrete terms, the difference lies in the duration of the agreement. A subcontracting agreement is in principle limited in time and punctual whereas the service agreement can outsource an activity of the company in a durable way.

The difference is also in the purpose of the agreement. Under a subcontracting agreement, the company entrusts the subcontractor with the task of carrying out a task that it could be able to perform itself because it corresponds to its core business, but that the client delegates because it does not have sufficient resources to perform it itself. Conversely, he concerns a task that the client company cannot perform internally because it does not have the skills to do so.

Consequently, the difference finally concerns the final recipient of the service. The services of the provider are provided to the customer directly, whereas the subcontracting relates to services to be rendered to the final customer. The subcontracting relationship is thus triangular. More legally speaking, and in view of these points in particular, subcontracting is also subject to specific and very strict regulations, to protect the subcontractor.

The service agreement does not have to be in writing. However, it is strongly recommended that it be in writing in order to avoid any future dispute. Moreover, if no agreement is signed, in the professional world, estimates are also used. This consists, even before there is an agreement between the parties, in giving a written document to the customer detailing the services that the professional will carry out as well as their price and the date of their realization.

This estimate thus makes it possible to the customer to have a precise idea of the service which will be carried out and, in the event of acceptance of its share, to materialize its agreement effectively with the realization of the envisaged services. The establishment of an estimate does not have the same consequences for the professional and for the customer:

It should be noted that the production of an estimate is, in principle, optional. However, it is mandatory in certain cases.

As far as the service agreement is concerned, it will include the usual contractual information:

Note that the more specific the terms and conditions of the service, the lower the risk of misunderstanding. This is why it is important to draft a specific service agreement with the help of a specialized lawyer so that it is specifically adapted to the situation of the company and its client. Contact Themis Partner’s lawyers to assist you in drafting your service contract.

It is also important to anticipate and envisage the occurrence of a conflict from the contractual negotiation phase. It is therefore necessary to think about drafting the modalities of its resolution. A preliminary attempt at amicable resolution, recourse to a mediator, formal notice before going to court, etc. It is at this point that you must also consider the possibilities for one or other of the parties to leave the agreement by inserting a termination clause in the service contract. The reasons for using it and the procedures for its implementation must be described.

There are some particularities regarding the termination of a service agreement that are related to its duration. In the case of a fixed-term agreement, the agreement ends when the agreed service is provided. It is possible to terminate it early, but only in the event of a breach of the service agreement by either of the parties. The parties can also always agree on an early termination by mutual consent. Furthermore, when the agreement comes to an end, it can be tacitly renewed if such a clause has been inserted in the service contract.

If the service agreement is for an indefinite period of time, the parties may decide to terminate the agreement at any time, subject to a reasonable notice period, which should be provided for in the agreement. In many cases, the termination of the service contract is to be notified by registered letter with acknowledgement of receipt.