How to Write a Service Contract

Video Transcript

"Hi. My name is Mark and we're going to look at how to write a service contract. The purpose of a service contract is to formally identify an agreement that has taken place between a service provider and the recipient of the service. That can be anything, from even ordering a home delivery to working with another organization in the office. The service is basically a provision provided by the service provider in terms of installing or implementing or creating something on your company's behalf. They are bound by a set of standard rules and regulations that they must perform. At the same time, they should be covered should anything unplanned go wrong. So, it's a contract that basically indicates they will provide a service but, at the same time, to cover them for any issues that could go wrong or affect them in terms of their delivery of that particular service such as their car breaking down on the way. Obviously they did not plan that to happen, they didn't want to be late, they didn't want to not install your equipment, but, due to this unforeseen circumstance, they were delayed in their performance of that service. They need to cover themselves for that. On the other hand, as a recipient, that's you, you want to ensure that you are getting what you are paying for. Now, when you write this agreement, you want to make sure that the time of delivery, time of the installation of the service, its operation, you want to make sure that agreed payments are taking place in the agreed period of time, and that you also are covered for anything that goes wrong with your equipment. So, whether it can be a warranty, or a guarantee, or some form of service that can happen as a backup, a support service to the provision in case something defaults, goes wrong, malfunctions. So, in this contract, it should be clearly indicated from step one to the end, that you, as the receiver of the service, are only prepared to pay for it on the basis of the delivery time, the quality of the product or the service, your guessing, the installation time, the effectiveness of it, and on those basis's you are prepared to pay x, y, and z for it. And, obviously, the service provider will provide their own levels of requirements and together, if you're both happy, you'll sign it. That's a legally binding agreement between you and the service provider to ensure that both parties are happy with it."