Service agreement template

What is a service agreement?

A service agreement is a legal document that outlines the terms of a service provided by one party (the service provider) to another (the client).

Also known as a general service contract, master services agreement, or a service level agreement, these agreements are used to define the scope of work, contract duration, compensation, and other terms and conditions. 

Service agreements are widely adopted and can used in industries such as IT, consulting, marketing, and many more. This is because ‘services’ can be interpreted broadly to cover everything from software development to modelling, and beyond. 

In fact, we even have some industry-specific service agreement templates for you below:

• Consulting services agreement template
• Marketing services agreement template
• Software as a service agreement template
• IT support services agreement template
• Bookkeeping services agreement template

In this article we’ll be covering service agreements broadly, from how to write one to what a comprehensive service agreement template should include. But let’s start with when you should use a service agreement in the first place. 

Why is a service agreement important?

A service agreement is important because it protects the interests of both parties, ensuring that the service provider is paid for the service they deliver, and that the customer receives the level of service agreed upon. 

By clearly outlining these specific and tangible expectations, a service agreement will also be referred to in the event of a contractual dispute or legal disagreement.

When should you use a service agreement?

There are a few instances where you’ll need to use a service contract to protect your business. Here are a few examples: 

1. Hiring a service provider

‍When you hire a service provider, such as a consultant, IT professional, or marketing agency, they'll need to understand the scope of their work, the timeline, and how they will be compensated. A service agreement provides a clear and legally binding document that outlines these details.

2. Providing services

‍If you're a service provider, you'll want to ensure that you have a clear agreement with your clients about the services you'll provide, the timeline, and your compensation. This protects you from potential disputes and ensures you get paid for your work - and on time.

3. Establishing ongoing services

‍For ongoing or long-term services, a service agreement can provide a framework that can be updated or amended as needed. This allows for flexibility while still maintaining a clear understanding of the terms of the service.

4. Setting performance standards

‍Service agreements often include service level agreements (SLAs), which define the level of service expected from the service provider. This can include things like response times, uptime for software products, quality of work, and other performance metrics.

Who should draft a service agreement?

Different teams and individuals will need to send out service agreements, depending on the nature of the service being provided and the recipients of that service.

These teams will often include:

• Sales: if the sales team are selling a SaaS product, they’ll often be involved in negotiating the terms of a service agreement, and distributing this agreement to the counterparty to close the deal. 
• HR: if you’re onboarding a contractor to provide certain services for your business, you’ll probably need to consult the HR teams on employment and contractor laws first.
• Finance: if the service agreement you’re working on has a large contract value, or carries a great deal of financial risk, you can expect finance teams to also review and approve certain parts of the contract, especially when it comes to contract payment terms.
• Procurement: if you’re a a customer, you’ll likely bring the procurement team into the buying process, meaning they’ll have eyes on the service agreement, too. 

However, if the company is big enough to have an in-house legal team, it will be the legal team that is tasked with owning and creating service agreement templates. They will typically have final approval rights over the final version on the agreement, too.

What should a service agreement template include?

Your service agreement template needs to be comprehensive enough to cover a broad range of situations, offering your business the protections it needs and ensuring an appropriate value exchange with the customer.

A robust service agreement will include:

• Details of the parties involved: the customer and service provider should be referred to by name in the contract, with any legal names of businesses clearly listed.
• Description of services being provided: the contract should clearly describe the description of the tasks, responsibilities, and deliverables that the service provider is expected to complete.
• Terms of payment for the service: the agreement should clearly define the compensation for the services provided, including the amount, payment schedule, and any conditions related to the payment.
• How long the services will last: the service agreement should clearly outline the contract’s duration, or how long the obligations relating to service delivery and payment will continue for.
• Termination options: the agreement should outline the conditions under which a contract can be terminated.
• How to handle disputes: a service agreement should also include a clause that outlines how disputes will be resolved, including steps such as negotiation, mediation, and litigation. 
• Laws governing the agreement: like all business contracts, the service agreement should clearly state which country’s laws should be applied to the contract.

Now you know exactly what a service agreement template should include. But how do you turn that into a legally binding contract you can trust? 

How to write a service agreement

1. Start with a standard service agreement template

First, choose a well-structured service agreement template as your foundation. A good template provides a framework that includes all the essential clauses and sections, such as the scope of work, contract payment terms, confidentiality, and termination conditions. This helps you avoid overlooking critical components.

2. Customize the scope of work

The scope of work is the heart of any service agreement. While a template will offer a basic outline, it’s crucial to customize this section to reflect the specific services set to be provided. 

To do this, you’ll need to detail the tasks, deliverables, timelines, and responsibilities in precise terms, whether that’s software uptime or an excavation job. 

3. Adjust payment terms to fit your needs

Templates typically include generic payment terms, but these should be adapted to match the specifics of your arrangement. 

Perhaps you want upfront payment for the service, or you want to charge for time and materials. Either way, it’s important to consider factors such as payment schedules, methods, and any additional costs like expenses or late fees. 

These can be amended during contract negotiations, but it’s always worth getting off on the right foot with reasonable and detailed terms to begin with. 

4. Incorporate relevant confidentiality and data protection clauses

If the delivery of your service involves sensitive information, it’s also important to customize the confidentiality and data protection sections of the template. 

To afford yourselves sufficient protection, be sure to specify what constitutes confidential information, how it should be handled, and the obligations of both parties regarding data security. 

5. Set clear termination conditions

When drafting a new service agreement, ending that service is likely the last thing on your mind. But it’s important to define what constitutes grounds for termination of a contract, how much notice is required, and any penalties or procedures involved. 

You can either prepare for these eventualities using a termination clause, or a full termination agreement. 

6. Review and refine the service agreement terms

Once you’ve customized the template to fit your needs, take the time to review the contract carefully. If you don’t have legal expertise yourself, it will be beneficial to have a legal professional review the customized agreement to ensure that it’s legally sound and that all bases are covered.

Why are service agreements difficult to manage?

Unless you have a reliable contract management solution, the process will still prove challenging. It's admin-heavy and it involves a lot of back and forth, quickly becoming a burden for teams that are already buried in low-value admin work. 

In particular, businesses encounter the following problems:

• Low-value work: “I’m the General Counsel, responsible for the company’s legal affairs, and yet I spend significant portions of my time repeatedly letting commercial teams know where to find a contract template”
• ‍Version control risks: “As a salesperson, I never know which the most up-to-date template is - are these the right terms?”
• ‍Incorrect templates: “Do I need the standard service agreement or a specialized version? Which terms do I need to add myself?”
• Lengthy negotiations: “Negotiations on these service agreements are getting lost in my emails all the time. There are comments all over the place and none of them are captured centrally”
• Lost metadata: “I don’t have visibility into our service agreements. This makes it near impossible to track my contractual obligations accurately"

Manage service agreements more efficiently with Juro

Luckily, your process doesn't have to have the pain points we just described. There's a faster and more efficient way to create service agreements. You can manage them end-to-end with Juro.

By managing your service agreements in a flexible and collaborative contract management solution like Juro, you can save time and streamline the process. Here’s how.

1. Create a service agreement template

‍In most businesses, legal counsel will want to determine which clauses are used in a service agreement template, and when they are used.

With Juro's automated contract templates, in-house lawyers can comfortably define and control the terms of the service agreement.

These pre-approved templates can then be used by commercial teams to self-serve on contracts from the template without inviting contractual risk.

Sales reps simply use the Q&A flow on a service agreement template to enter key data in smart fields and watch the data auto-populate the contract to customize it. Or, they can watch the data move seamlessly from other business systems via an integration with CRMs like Salesforce, HubSpot and Pipedrive.

2. Collaborate on the service agreement in real time

Juro users can also collaborate on their service agreements in real time, with the ability to toggle seamlessly between internal and external commenting.

This means that contract owners can discuss the contract terms privately with their internal stakeholders and respond to counterparties' comments, suggestions and contract redlines without leaving the platform.

3. Sign your service agreement electronically 

‍Once the service agreement is approved, it can be sent for signature. With our native eSignature solution, parties can sign the service agreement in seconds, from any device.

This removes the usual friction encountered with wet signatures from the signing process helps you to secure new clients faster and more efficiently.

Not only does Juro’s native eSignature functionality empower you to get contracts signed faster, but it’s also secure and holds validity in most geographies. 

4. Store service agreements in a searchable repository

The contract lifecycle doesn't end once a service agreement is signed. There are a few, important things you need to do to manage and track your contracts post-signature, too.

Juro makes all of this work easy by centralizing your contract storage and making all of your contracts fully searchable. With Juro's data-rich contract repository, it's easy to find, query and report on your service agreements.

You can even set automated contract reminders for your agreements, allowing you to track auto-renewal deadlines, termination dates, and upcoming contractual obligations.

Find out how Koombea manage service agreements with Juro

Koombea, a US-based app development company, transformed their contracting process by switching to Juro, streamlining the way they agree service contracts. 

Here’s how Nicolas Costa, Director of Customer Ops and Account Management at Koombea describes the value added by Juro:

• Redlining made easy: “I love Juro’s audit trail - the timeline of events is super helpful for tracking activity on a contract, especially for the sales team”
• Faster approval workflows: “Before Juro, it would take weeks to approve a contract, with a mess of different versions along the way. Now, it takes seconds”
• Better customer experience: “Our counterparties are happy negotiating in Juro - they appreciate the email notifications they receive every time someone leaves a comment”
• Reduced risk in contracts: “We’ve mitigated risk through Juro. I'm saving time, I'm saving money, and I'm saving myself from a lot of stress”

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Want to find out how Juro can power service agreements for your business? Hit the button below to book a personalized demo.