How to Write Service Level Agreements

If you own a service business or are a homeowner contracting with a service business, the most important piece of paper you need is a contract. The contract delineates responsibilities, says what work will be done, where it will be done, with what materials, and in what manner. Often we think that a handshake is good enough to get a job done. Writing everything down is foremost in having a job done well.

Things You'll Need

• Contract
• Signatures of all parties

Instructions

Prepare the Contract

1. Prepare a list of materials for the job. This is usually in a proposal and is easily made part of the contract.

2. Prepare a list of services to be performed.

3. Write down where the services will take place. This is usually the owners home, but could be a place of business.

4. Write in the cost of labor. Normally, this is also in the original proposal and can be incorporated into the contract. Include the labor overhead in the cost of labor, eg., liability and workers' compensation insurance, FICA, SUTA, FUTA or any others. Be sure both the contractor and owner know what is covered by the contractor's insurance and what, if any, obligations the owner has in the event of breakage or an accident during the course of the job.

5. Get a copy of the contractors insurance from the insurance agency. This becomes part of the contract.

6. Agree on a start and finish date. Allow for leeway for unforeseen events such as rain or unavailability of supplies or other events that can stop the job temporarily. Assure this is in the contract.

7. Agree on the total amount of the job. Write in change order policies. Include how the money is to be paid to the contractor, usually in terms of what percentage of the job is done. All parties sign the contract.

8. Record the contract. If either party wishes, he can record the contract at the county registrars office. If the contract is recorded, it allows the contractor to place a lien on the owner's property in case of non-payment. It also allows the homeowner to sue the contractor more easily if the job is not done properly or warranty work is not done in a timely fashion.

Tips & Warnings

• Allow for changes in the contract. Contracts are only pieces of paper. If all parties agree, the contract can be amended with a pen and initials from all parties involved.

• No matter how well all the parties know each other, always get a written contract. If the parties do know each other, it is even more important to get a signed contract.