In this era, contracts are essential. For business owners, this document serves as a safeguard for their businesses. When people enter into an agreement and reduce it to writing, a contract is formed. It now becomes legally binding to all signatories; since the law intervenes, both parties must honor what was agreed upon. A person must always be aware of the contents of a contract he signs since legal repercussions are inevitable. Likewise, a person who drafts the contract should also be aware of what he includes in the legal document. To guide you in making a suitable and basic contract for services, read the article below.
It is an agreement entered by two parties: the contractor—one who provides the service under contract—and the contractee—one who engages the services of a contractor. Contracts for services are used in numerous transactions by different types of businesses that offer services or hire services of others. Common service agreements are employment contracts wherein an employer engages the service of another, and the latter becomes the former’s employee. Other kinds of service agreements, on a small scale, include independent contractor contracts, such as cleaning service of maids, consultancy service of an accountant or lawyer, construction service of a construction development company, and others.
Chances of verbal agreements resulting in future disputes due to misunderstandings are not unlikely. Existing news articles cover situations concluding the importance of putting agreements into writing to safeguard interests in business transactions. Hence, written contracts are preferable over verbal ones due to the following reasons:
They serve as primary and concrete evidence. For example, in breach-of-contract litigation, the evidence presented in court should be the contract specifying the rights and obligations violated by either party. Therefore, businesses prefer a written agreement instead of a verbal one.
They help prevent misunderstanding. A well-written contract clearly defines the terms of each parties’ undertaking. It provides guidelines to follow and how the business transaction should flow. Basically, it represents what the parties agreed upon; it’s a picture of the agreement.
They define the scope of the obligations and rights of the parties. Clearly stating the obligations and rights of the parties is essential in drafting contracts because they clarify the future liabilities of the parties. Legal accountability arises when one party fails to do his obligation under the contract or violates the right of the other. Therefore, it is essential to include the manner of his liability. A liability clause in a contract answers the question, “in what way will he be liable?”. Most agreements lean on monetary options to answer for liability, such as payment of damages.
They ensure confidentiality. Non-disclosure clauses and confidentiality clauses are popularly incorporated in contracts now. They ensure that business details or specific transaction details remain confidential and are kept secret from the public to protect both the company and the client.
Contracts are legally binding. It is crucial for the parties involved to make negotiations until they reach a mutually beneficial agreement. And once both parties sign the contract, they are legally obligated to honor the terms and conditions stated in the legal document.
Generally, contracts come in different writing formats. Its structure may differ from one contract to another or from one company to another, but its standard elements are the same. The structure of a contract’s content should not omit the standard provisions of such legal document. These provisions are essential elements of a basic contract. So, when drafting a contract for services, it is important to include the provisions below.
In this capitalist system, numerous services are made widely available to consumers. A person can easily hire the service of another to perform a task on his behalf; in the process, they enter into a service contract setting the terms and conditions of the agreement. Below are some common and basic contracts for service.
The entertainment industry typically uses these contracts. This agreement involves a performer, also called—in the context of this particular contract—as an entertainer, who provides entertainment services to the client. The entertainer can be a singer, a dancer, a band, an artist, or any person hired to perform an act that brings enjoyment and amusement.
The parties in a management service agreement are the management services provider(MSP) and the client. The client is either an individual, a partnership, or a corporation who owns a business and engages the services of a third party—the MSP—to manage over the business. The MSP has operational and administrative functions. As such, it is in-charge of different aspects of the client’s business: payroll of the employees, keeping and accounting of company records and receipts, and other specific management roles stated in the management service contract.
A construction agreement is used in construction projects; wherein, a project owner engages the services of a construction company or a contractor to participate in the construction process. The construction company or the contractor is in charge of providing the labor, materials, and other equipment involved in the construction process.
If you’re having trouble dealing with and handling your finances, it would be best to hire professionals in the financial service field. Financial services include a vast range of services including but not limited to investment programs, consultancy, tax sorting, accounting, auditing, insurance application, credit and savings management, loan, and mortgage application.
It is an arrangement wherein a client hires the services of an event planner to be in charge of coordination and over-all set of a special event. This may include finding a place to host the event, providing a theme, food, decorations, and other accommodations.
From its name, it involves the hiring of security guards to safeguard the perimeters of a business establishment or an individual’s physical safety and the like.
We’ve established that it is crucial to put an agreement in writing, primarily to safeguard the business interest of the parties involved in the agreement. We’ve also introduced the different key provisions in a contract for services. So, how do you write a contract for services? Below are some tips to help you create and write your own contract for services.
Organizing your thoughts is vital in writing. Also, preparing an outline is important; it acts as a blueprint of the final written contract. By providing a bullet form draft, you can easily recognize key points and can expound them later. Brainstorm what clauses you want to include in the contract, but don’t forget to include the key provisions discussed earlier in this article.
Once you’ve made an outline that provides all points you want to include in the contract, you can now fill it out with subpoints to further discuss and expand the main idea. Subpoints are minor points or descriptive words or phrases supporting and furthering the main thought of a heading.
The best format is in written form, either printed or electronic. One cannot easily manipulate printed formats. However, they are susceptible to loss and damage. On the other hand, electronic formats can be manipulated but are difficult to lose and damage since you can make several copies of it and save it to different hard drives. Electronic formats can either be in doc., pdf., text, etc. It is up to you which you find convenient and best suits your business.
As discussed earlier, there are basic provisions you should include in writing contracts. Entering into a business transaction is always risky, that’s why contracts are commonly used in business transactions—to mitigate the risk and safeguard interests of businessmen and clients. To reiterate our previous discussion, essential provisions which a basic contract for services should contain are party identification, stating rights, obligations, and liabilities, payment scheme, the scope of work, schedule, confidentiality clause, and dispute resolution clause.
Be clear on what services you are offering the client. By stating the type of service you provide and defining it in a simple and clear language a client can understand, you can prevent future disputes. Set the perimeter—what does your business offer, and what activities does it cover? If possible, be very specific and leave no room for interpretations.
Contracts are legally binding documents; they have the force and effect of law between the parties who have signed it. However, before we speak of the legality of the contract, we must ask, “what law governs the contract?” Different countries have different sets of laws that regulate business contracts entered into in their jurisdiction. Some countries require a contract to be properly notarized by a lawyer for it to be binding on the signatories. Thus, before entering into an agreement, research on local laws and ordinances which may affect the validity of the service contract you have drafted. Proper research pays well in the future.
Preparation, organization, and research are vital in contract making. Before you can create a contract you should prepare yourself mentally and intellectually. Organize your thoughts and important details you want to include. Lastly, research and absorb useful information you can use in the contract making process.
If you’re still having trouble writing your own basic contract for services and the above tips are of no help to you, just hire a lawyer to write one for you. It saves you the time and effort but not the money. But if you don’t want to hire a lawyer to do it for you and want a cheaper alternative, browse on our website, and maybe you’ll find a contract that fits your preference.
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