One of the most important things you can do when you run a business that provides a service it to have a client service agreement. Having all your customers sign this document protects both you and customer and outlines exactly what services you will provide. Unfortunately, many businesses either do not utilize this valuable document, or they do not include enough information in their agreement. These mistakes sometimes lead to disputes that must be settled in court. If you wish to minimize these disputes for your own business, we recommend that you speak with your business attorney to draft a client service agreement for your business as soon as possible.

What It Is

A Client Service Agreement is a formal document that specifies the nature of the service you provide, clearly delineates the terms and conditions of your service, and defines the relationship between your business and the client. A thorough client service agreement will cover the bases of all aspects of the service you are providing to you client, making it clear who is responsible for what in the course of the business relationship. Having every client sign this agreement ensures that all parties understand their rights and obligations. Certainly, you can do business without a client service agreement, but having this document provides the best possible protection to both you and your client should the business relationship go sour for any reason.

Why You Need It

As we have already stated, the client service agreement serves to protect both you and the client for the duration of the business relationship. Some benefits that this agreement provides are:

Single Source of Information

A good client service agreement puts all the information that you and client need in one place. It is a reference guide for the nature of the business relationship and the details of the services that will be provided. Having a single document that both you and client have access to ensures that everyone is on the same page regarding the expectations and terms of the relationship. This also helps to avoid any miscommunication that may occur between your client and your business.

Prevent Problems

Unfortunately, the nature of life is that sometimes things go wrong. Mistakes happen and sometimes timelines are delayed, or deadlines are missed entirely. This can, naturally, lead to disputes between your business and your client. Having a written agreement in place can mitigate some of these disputes or at least prevent them from escalating. When both parties know exactly what happens in the event of a dispute, then the resolution process is much faster. In addition, this can also help to rebuild or repair the relationship once the dispute is resolved.

What It Should Include

Speak with your business attorney to draft a client service agreement that works for your business. It is important that this agreement be tailored to the specifics of your business and what you can agree to provide. You may even need to customize your client service agreement to each client in order to have the most relevant and accurate information included in the agreement. In general, a few things that the agreement should spell out are:

  1. Exactly what services will be provided
  2. How payment will be made for these services
  3. The timeframe for completing the project or service
  4. How and when you or the client are able to terminate the contract
  5. Who owns the rights to any intellectual property that may be included in the service
  6. A liability provision that limits when a client may sue the business
  7. How to resolve disputes