Service Agreement

A service agreement is entered into between two parties among which one is the customer and one is the service provider. It could be for providing any kind of service, e.g., internet service provider. A service agreement should typically contain the following clauses:

Scope of Services

The most important clause since it defines what the scope of services should be.

Term of Agreement

The duration of the agreement.

Fees

Relates to commercial terms and conditions.

Termination Clause

Will include various grounds for termination including breach of contract; termination by mutual consent, bankruptcy/insolvency of the service provider, etc.

Confidentiality

Will provide that any confidential information provided by the customer to the service provider shall be protected from unauthorized disclosure to third parties.

Indemnity

The Service Provider will indemnify the customer in case of any loss arising due to deficiency in the service provided by them.

Force Majeure

Will provide that the parties will be excused from performing their obligations in case of acts of God and other circumstances that are beyond the control of the parties. A time period maybe mentioned during which the parties may be required to wait and see if the situation is capable of being rectified, say three months.

Representations and Warranties

Parties make typical representations and warranties stating that they have all the requisite corporate approvals and authorisations to enter into the agreement.

Sub-contracting

There may be a clause allowing or not allowing sub-contractors to be hired by the Service Provider. The Service Provider may be asked to take prior permission from the customer before appointing sub-contractors.

Dispute Resolution

Arbitration maybe recommended as a means to resolve any dispute that may arise with respect to the Agreement. The Arbitration clause shall direct how the arbitrators are to be appointed; what will be the procedure followed by them; that their award shall be binding upon the parties, etc.

Standard Clauses like Severability, Amendments, Exclusivity, Jurisdiction, etc.