Service agreements are arguably the most important contract you’ll ever use in your service-based business. Why? Because they determine when, how and IF you get paid for your services. And getting paid for your services on a predictable and consistent basis is absolutely imperative to build a successful business, wouldn’t you agree?
In theory, your service agreement serves the purpose if it indicates the service provided and the price, right? But things are rarely that simple. Your service agreement should provide security and peace of mind in your business operations and growth journey. And if it doesn’t, every new customer is a gamble for your business. Let me explain.
It’s easy to plan for what’s SUPPOSED to happen, but what about when things don’t go as planned? There are certain procedures you have to follow in your business to be able to adequately serve your clients. What if your client doesn’t follow those procedures? What if your client’s failure to uphold their end of the deal makes it difficult, or impossible for you to uphold yours? Does your business just take a loss on the revenue it could (and should) have made if your client had just done what they were SUPPOSED to do?
Service agreements address the “what if’s” that can add up to major losses for your business.
Another thing your service agreement should do besides helping you generate revenue, is help you keep the revenue your business has already generated. If your client has an underlying health condition that makes their skin more sensitive and they don’t inform you, are you responsible for the chemical burn that they claim resulted from the treatment they paid you to perform? The esquire in me thinks NOT. But it’s not about me, it’s about the LAW. The law allows us to take steps to protect your business from situations like these, and we take them in your service agreement.
In lawyer land, we call this strategy liability shifting. Liability shifting is when we take the risks of doing business that would normally fall on your business, and we shift those very same risks somewhere else. There’s a lot of this going on within a well-drafted service agreement.
The language in your service agreement should be crafted to address and avoid liability traps (think lawsuit$$$) common to your industry, services, and business. Additionally, your service agreement should address issues that you’ve experienced and wish to avoid as you continue to grow your business.
But keep this in mind: the law tells us how far we can go within our contracts and how various issues must (or must not) be approached. For our contracts to work for us, they have to be enforceable. That’s why a one-sized fits all, generic approach doesn’t work to effectively secure your business interests.
And that’s why the Bosses’ Legal Vault takes REAL contracts, drafted for REAL clients and turns those contracts into NON-GENERIC customizable templates specific to your industry and the needs of your business.