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Service Agreements: A Service Provider’s Perspective
Service agreements are an important part of business. Often, they are considered from a purchaser’s perspective. But service agreements are just as important for service providers. A well-drafted service agreement will ensure that both parties in a service...Directors’ Duties: How do They Affect your Business?
As a small to medium business owner, you’ve no doubt got a lot of regulations to contend with. Almost all commercial conduct is regulated in one way or another. However, some regulations are a little more complex. Take directors’ duties, for example. Directors’...Social Media Marketing and the Law: The Small Business Guide
Starting a new business requires careful planning. It also requires publicity. Publicity is what connects you to your consumers, regardless of your chosen field. Whether you offer good or services, you need consumers. Fortunately, in the digital age, reaching them...Partnership and Shareholders’ Agreements: What You Need to Know
Businesses often start as an idea. Sometimes, they start as a personal idea that you have cultivated and pursued over the course of your career. More often, though, they start as an idea between friends, colleagues, or professional acquaintances. After all,...Starting a New Business: Companies, Trusts, Partnerships, Sole Traders, and Joint Ventures
Starting a new business is exciting. It’s an opportunity to weave your commercial ideas into something tangible, and productive. But it’s not without its challenges. The formation period allows you to lay the foundations of your future success. However, there’s a...When a Director Departs: What Executives Need to Consider
In a previous article, we spoke about restraint clauses. But we didn’t cover restraint clauses in relation to company directors, who want to start their own companies. Like most employees, company directors have access to the inner mechanisms of a business. Unlike...Restraint of Trade Clauses and your Rights
Almost everyone has signed an employment agreement or contract before. Usually, it’s an experience filled with budding opportunity. After all, employment is the gateway to a long and fulfilling career. However, for some people that agreement can gradually become a...Fraud in Business: Recognising the Signs
In terms of business-related crimes, fraud is among the more common. However, recognising fraud is more challenging than most realise. All fraud offences are predicated on an element of dishonesty. But that is generally the extent of their similarities. Fraud offences...Confidentiality Agreements: Protecting Your Information
Confidential information may be confidential for a range of reasons. It might be a trade secret—something that must remain secret for the sake of your business. Alternatively, it may be confidential for reasons of privacy; perhaps your business stores customer data,...Criminal Anti-Competition Laws in Australia
Business and competition go hand in hand. For a business to grow, that business must compete with others in its field. However, there is a limit on what conduct is permissible in terms of remaining competitive as a business. Conduct that exceeds that limit risks...Bribery of Government Officials: An Offence in the Commonwealth Criminal Code
Bribery is a widely accepted and well-known crime. It is not unique to Australia, and most consider it a pretty easy crime to identify. However, as with all crimes, there are grey areas. Occasionally, during the course of business, company owners or representative...Tax Crimes in Australia
Introduction Tax crimes are many and varied. There is a diverse and wide-ranging spectrum of tax crimes in Australia, all of which attract different penalties. And, while most business owners are aware of their obligation to pay tax, navigating the system itself can...Corporate Criminal Liability: Criminality and the Divide Between Individuals and Companies
Introduction It has long been recognised in Australia that companies may be held liable for the crimes they commit. That is to say, if a company commits an offence, or breaks the law, it will be punished as if it were an individual. Often, though, complications arise...What is Champerty and Maintenance?
Introduction Champerty and maintenance is an unusual term; it doesn’t receive much attention, for the most part. Of course, its name is derived from archaic terms. Those terms were used to describe the maintenance of legal proceedings by a disinterested third party,...The Tort of Intimidation: When is it a Crime and When is it a Tort?
Introduction The idea of intimidation in a business context is concerning to any business owner. It’s not common, but when it occurs there is more than money at stake. Intimidating conduct can have a serious personal toll. That is why the law is positioned to...When Does Defamation Affect your Business and What Can you do About it?
Introduction Of the economic torts, defamation is emerging as one that we see more frequently than others. It is also one of the more widely known and referenced. However, often, references to defamation don’t do justice to its complex nature. Recognising defamation...Deliberate and Direct Interference: The Tumultuous Tort of Inducing Breach of Contract
Introduction A contractual relationship is not often considered within the scope of torts law. In fact, it is a distinct area of the law, governed by a series of well-established principles. It is well-known, as well, that contractual relationships give rise to...Economic Torts: Limits on the Conduct of Business
Introduction The world of business is inherently competitive. Often, business owners can feel as though they’re on the defensive, with other commercial entities constantly growing around them. Of course, for many, that is simply the nature of business. But there are...What is Insider Trading?
Insider trading is a financial crime. Although it does not receive quite as much attention as other financial crimes, such as fraud, it remains relatively pervasive. However, the classification of insider trading is quite complex, and below, there is a more extended...Protecting Commercial Information: Confidentiality Agreements and the Duty of Confidence
Introduction Confidential information may not be something that most people associate with ordinary business. However, most businesses deal with information that demands a certain degree of confidentiality. That information may not necessarily relate to daily...What is a Guarantor?
Introduction In any commercial agreement or transaction, financial security is key. All parties to an agreement want to ensure that their interests are protected. However, that’s not always an easy thing to ensure. After all, there are plenty of variables to take into...How to Protect your Personal Assets as a Business Owner
Introduction As a business owner, you put a lot into your work. Time, effort, and money are the main foundations of a successful business. Often, though, operating a business is an exchange and what you put in is what you get out. As a result, you can find your...What is a Company Constitution?
Introduction Most people are familiar with the term constitution. However, that’s normally in the context of countries and governments. Far fewer people are familiar with the laws surrounding company constitutions. That’s understandable, too; company constitutions are...Manufacturing Agreements – What You Need To Consider
What is it? A manufacturing agreement is a contract between the developer or owner of a product and the person or company who makes the product. Application for small business people Small business people will often come up with the idea for a product that they want...Assignment of Debt
What is it? An assignment of debt is an agreement that transfers a debt, and all of the legal rights and obligations attached to it, from the creditor to a third party. The third party may be an individual or a company, such as a debt collection agency. Application...Business Management Agreements – What You Need To Know
What is it? A business management agreement is a contract used with the owner of a business engages another party to run the business on a daily basis. Application for small business people Business management agreements are useful for small business people who want...Service Agreements – 5 Key Points
What is it? A service agreement typically refers to the contract between an employer and a person or company hired by the employer to perform a specific task. Application for small business people Service agreements are essential for small businesses that need...Vendor Finance Agreements – A Basic Summary
What is it? A vendor finance agreement is a contract between a buyer and a seller, whereby the seller agrees to assist with funding the purchase price. The arrangements vary depending on the circumstances. Typically, the buyer will pay a portion of the purchase price...Customer Terms and Conditions – 6 Key Considerations
What is it? Customer terms and conditions are the rules that set out the rights and responsibilities of each party to a commercial transaction. It is usually be a supplemental document to the sale contract (if there is one) and it is generally standardised for all...Supplier Agreements – 5 Key Points
What is it? A supplier agreement is the contract between the supplier of a product or service and the person or company who is purchasing that product or service. Application for small business people Supplier agreements are frequently utilised by small business...Testimonials
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News & Publications
Social Media Marketing and the Law: The Small Business Guide
Starting a new business requires careful planning. It also requires publicity. Publicity is what connects you to your consumers, regardless of your chosen field. Whether you offer good or services, you need consumers. Fortunately, in the digital age, reaching them...Australian Company Law – Small Business Guide
The laws applying to Australian companies are substantial and complex. The key to Australian company law is the Corporations Act 2001 (Cth), as amended from time to time. It is a delight that a recent amendment created a “plain English” guide to company...A Practical Legal Guide to Starting a Business
This Guide is designed for use by business people and professional advisers when starting a business. The purpose of the Guide is to explain some of the key issues, specific risks and the potential for getting things wrong and some opportunities where professional...A Practical Legal Guide to Buying A Business
This Guide is designed for use by buyers of businesses, business brokers and professional advisers when buying a business. The purpose of the Guide is to explain some of the key issues, specific risks and the potential for getting things wrong and some opportunities...Service Agreements: A Service Provider’s Perspective
Service agreements are an important part of business. Often, they are considered from a purchaser’s perspective. But service agreements are just as important for service providers. A well-drafted service agreement will ensure that both parties in a service relationship receive fair treatment. So, what is the trick to drafting a strong and reliable service agreement? Generally speaking, there are many tricks. Service agreements needn’t be overly complicated, but they can still be complex. In this guide, we’ll take a look at some of the features that distinguish the more effective service agreements, from their counterparts. Hopefully, that will help answer the question: do you need a service agreement between you and your consumers?
Before we go any further, though, let’s break down the purpose of service agreements. As a service provider, your business model is based on an exchange. Your company provides services to clients and customers, in exchange for payment. A service agreement is designed to ensure that the exchange between you and your consumers remains fair. In that sense, service agreements can be collaborative; when you draft one, it’s important to think of your clients’ needs as well. After all, satisfied clients are the key to a successful business. But that doesn’t mean your needs have to take a back seat. It is important that your service agreement is firm in setting boundaries where necessary. Service relationships often change, so agreements need to be dynamic. But they also need to ensure that your business has some assurance of stability, going forward.
What are some common provisions found in most service agreements?
A service agreement needs to have certain provisions. The precise nature of those provisions will vary, depending on the services your company offers. For that reason, it’s difficult to offer a one-size-fits-all agreement template. However, if you were to look at a broad spectrum of service agreements, you may notice that some provisions appear quite frequently, albeit with various alterations. Essentially, the more common service agreement provisions form a backbone of sorts. With them, you can find a broad structure for your service agreement. So, let’s take a look at some of the most common service agreement provisions.
Your service agreement needs a description of services – here’s why
A description of services often appears early in a service agreement. It may seem a little pedantic, too; surely both parties are clear on the services being offered? Often, yes – but there’s more to it than that. Describing the services you offer places parameters around the service relationship. Like any relationship, service relationships are robust. They can change, and often do. By agreeing on the services you will offer, you can create clearer expectations in your service relationship. Sometimes, that can be useful in situations where your client requires additional services at short notice. It might also be useful if expectations arise in terms of value-add services, or other commercial incentives. With clearly defined, and agreed parameters, your service relationship stands a better chance of staying fair.
Standard of performance: your service agreement should set the standard
Fairness goes both ways, of course. Your client is entitled to a satisfactory standard of service. Further still, your client is likely to want some assurance that they will receive a certain standard of service. That’s why a lot of service agreements include a standard of performance clause. As its name suggests, this clause establishes the standard by which your services must be carried out. A common standard imposed under service agreements is that of ‘reasonable care and skill.’ That standard is adopted from the field of negligence law, in which a duty of care is imposed on the same terms. However, standard of service provisions can also be implied. That means your service agreement may bind you to a standard of service, even without an explicit provision to that end.
However, some service agreements go further. Sometimes, customers seeking premium services may want a higher standard. In such cases, a service agreement can respond by imposing stricter terms. A clause similar to the following may be helpful: ‘a standard of skill, care and diligence to be expected from a qualified, competent and experienced provider of services of a similar scope and complexity.’ That’s just an example, but provisions like that can be useful – especially for specialised services. Before adopting one, though, it’s best to seek some professional advice.
Costing and charging: make sure your service agreement covers you!
Another important provision in a service agreement is one concerning costing and charging. These provisions are another example of the double-sided protection service agreements offer. On the one hand, a costing and charging provision will help you manage the terms of your payment. They can help you get paid the right amount, in a timely manner. On the other hand, such provisions help your clients. They offer them some degree of certainty as to the price of your services, and the terms of payment. If well-constructed, these provisions can lay the foundation for a fulfilling and straightforward service relationship between you and your clients.
Service agreements need to cover a lot of topics – here’s how to pick yours
Service agreements need to traverse a wide range of topics, from commencing a service relationship, to terminating one. And everything in between! As a result, you may be faced with the question of which provisions to include. For a lot of business, that can be a challenging question to answer. It can also be complicated for those who are starting a business, and have yet to gain a great deal of experience.
In those cases, the best place to start is at the start. We suggest carefully thinking through your business model. What services do you offer; how much do they cost? What will your clients be expecting? Simple questions like that can help you build a general framework around your services. Ultimately, service agreements are important when it comes to managing expectations, setting standards, and maintain fair and amiable service relationships. For that reason, it’s worth taking the time to draft a strong one.
Get professional help to obtain a fair and enforceable service agreement
Service agreements are complex; they’re a legal document. For that reason, we recommend getting some legal help to put yours together. At Kafrouni Lawyers, we have longstanding and wide-ranging experience with service agreements. We have drafted them for many different businesses, in relation to many different services. We can help you draft a service agreement that will contribute to a fair relationship between you and your consumers.
Disclaimer
The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Company directors should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.
Liability limited by a scheme approved under professional standards legislation.
Directors’ Duties: How do They Affect your Business?
As a small to medium business owner, you’ve no doubt got a lot of regulations to contend with. Almost all commercial conduct is regulated in one way or another. However, some regulations are a little more complex. Take directors’ duties, for example. Directors’ duties apply to the directors of small and medium companies, in the same way that they apply to the directors of large multinationals. Of course, the latter category of companies is a complex organism. It requires complex laws to regulate it. But the same is not always true of small and medium business.
Social Media Marketing and the Law: The Small Business Guide
Starting a new business requires careful planning. It also requires publicity. Publicity is what connects you to your consumers, regardless of your chosen field. Whether you offer good or services, you need consumers. Fortunately, in the digital age, reaching them is easier than ever. With some careful planning, and perhaps some marketing assistance, you can reach thousands of potential consumers with the click of a button. That’s a pretty hard opportunity to ignore. However, there are some potential challenges that can arise when you take your business online. Social media marketing can start robust and dynamic online discussions. Often, they’re largely outside of your control. There is always the risk that online engagement may head in the wrong direction, and take your business’s good name with it. That can have consequences in terms of publicity. But even more importantly, it can have legal consequences. So let’s take a look at the obligations placed upon you when you take your business online. read more…
Partnership and Shareholders’ Agreements: What You Need to Know
Businesses often start as an idea. Sometimes, they start as a personal idea that you have cultivated and pursued over the course of your career. More often, though, they start as an idea between friends, colleagues, or professional acquaintances. After all, collaboration breeds productivity. Business ventures seem safer when the load is spread across multiple parties, too. If you’re starting a business with two, three, or even four others, your combined resources place you in a more comfortable position from the start. However, that doesn’t mean your new endeavour is risk-free. In fact, you will face perhaps one of the most insidious commercial risks of all: disagreement. Disagreements between business partners or shareholders can be terminal for your business.When all parties to the disagreement wield equal power, reaching a resolution is very challenging. Luckily, there’s a solution. Better still, it’s available to your business immediately: the shareholders’ or partnership agreement. read more…
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