BlogContracts & TransactionsLegal ResourcesDo I Need a Service Contract?

August 10, 20220
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“The happiness of your life depends upon the quality of your thoughts.”
Marcus Aurelius, Meditations

“The economic and legal interests of your project depend upon the service contract.”

– Legit, A Legaltech Legal Company

A #legit reader addressed us asking for advice:

“Legit, I want to subcontract a graphic designer to help me with product’s marketing on social media. Do I need a service contract?”

We did not give her the typical answer lawyers usually give (“It depends”). Instead we firmly answered: “YES!”. To keep both the person and the conversation confidential, we will further elaborate the importance of a service contract, through the lens of legal advice we gave to our reader. 

  1. Subcontracting: Do I need a service contract?
  2. Legit Solution: Legit Service Contract

 

What is a Service Contract?

 

A Service Contract is an agreement governing the economic and legal interests of the Service Provider and the Client.

The Service Contract regulates:

  • How the services will be delivered
  • Payment modalities
  • Parties’ rights and obligations 
Service Contract and the Contractual Freedom

 

At the moment when the parties want to draft a contract, they refer to the Civil Code, which stipulates general provisions – for the contractual relationship, and ad hoc provisions for certain types of contracts.

The Service Contract is not regulated by Civil Code provisions. Yet, its articles should be drafted in compliance with the principles of the Civil Code. Why?

Law is an instrument which stipulates general rules (sometimes mandatory) for the parties to follow when they are entering a legal relationship. However, social development and business interests do not always depend on the law’s conservativeness. To that end, the Civil Code stipulates the “contractual freedom” principle – as an instrument that parties can use for signing any agreement they want. 

When parties exercise their contractual freedom, they should be aware not to sign contracts against: 

  • General principles of law
  • Legislation in force
  • Public order in the country

Contractual freedom allows the parties to freely determine the nature of the contract, respecting the limits set by law. As a result, parties can freely draft a Service Contract as long as they have reached a common will on the contractual terms, and do not place each other on unequal terms.

 

Do I need a Service Contract?

 

The Service Contract is an important document for every person and/or businesses who provide services, especially when the terms reached orally are not sufficient to meet parties’ needs and requirements on the payment and other obligations. 

Shortly: YES, you need a service contract, whether you are a service provider or a client.

Real life example

 

Mark is a legal translator registered on the Legit Platform, who offers legal translation services in several languages. As soon as he completed the registration process in the “Find a Lawyer” section (a section where all legal professionals can register, not translators only), Mark drafted a Service Contract using the “Legal Documents” section. “I want to keep it safe. I do not compromise with the services I provide, neither with my clients. Thank you for making it easier for me! ” Mark wrote to us, right after downloading the Service Contract.

 

What should I include in a Service Contract?

 

A Service Contract should meet the parties’ needs. All the conditions should be written clearly in order to avoid misinterpretations and make the contract easily enforceable. For these reasons, a Service Contract should contain:

  • Generalities of the parties
  • Description of the services 
  • Timeline for service delivery
  • Information on payments and installments
  • Transaction amount 
  • Payment scheme
  • Compensation and guarantees
  • Duration of the contract
  • Ownership rights of the final product
  • Reference to a confidentiality agreement (optional)
  • Important dates
  • What will be considered contractual breach 
  • Dispute resolution provisions
  • Applicable law
  • Signatures of both parties

Service Contracts can be drafted for, but not limited to, these services:

  • Legal services
  • Software services
  • Financial services
  • Business services
  • Marketing services

For direct services – such as the ones offered by technology oriented freelancers – it is advisable to describe these services in detail.

In other cases where the type of services themselves make it more difficult to go into details, such as hiring a professional to build, maintain and write the content of your website; the parties may provide more provisions for the description of services, such as the nature of the content of the information and the frequency of the posts.

 

What is a service provider?

 

A service provider can be a person or company, who provides professional services to a client. In the Service Contract, parties agree to provide services in exchange for a compensation (price).

Depending on the type and the nature of the service provided, parties should stipulate special conditions for the information they will share (whether it is classified confidential or not) and specify how these services will be provided. For example, if smart software will be used or not. 

Any professional who offers professional advice and services to another party in exchange of a price is considered a “Service Provider”, whether he/she is a consultant, lawyer, attorney, economist, financier, etc.

 

Who is the client?

 

The client is the party of the contract who orders the service(s). He/she is obliged to pay the price of these services, in accordance with the conditions defined in the contract, and if necessary, to give the service provider all the necessary materials for him to deliver the work/service on time.

 

Legit Solution: How to draft a Service Contract?

 

Just like Mark (read above) anyone (over 18 years old) can draft a Service Contract on the Legit Platform. How?

  1.  Register on the Platform (as an Individual or a Business)
  2. Click the button “Create a Document” and draft the contract
  3. Select “Service Contract” from our legal documents library

Yes, easy as that! 

We will stand by you during the drafting process (not as an invisible mythical creature), dictating the questions you will have to answer, which – at the end- will constitute the terms of the contract. 

You will also find short explanatory paragraphs for every unexpected concern you might have. We got your back, so you will tailor a Service Contract that responds to your needs and the requirements of law in force. 🙂

Not only Service Contracts!

The “Legal Documents” section in the Legit Platform offers you a variety of legal documents:

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