A service contract between businesses should make it possible to understand what will be delivered, how the work will be checked and what happens if things do not go as planned. Price matters, but a substantial share of disputes stems from differing expectations about the scope of the engagement.
Contracting between professionals should not be confused with a consumer relationship. Before using a template, it is advisable to identify the parties, the contracted activity and any special rules that may apply.
Describe a verifiable result
Expressions such as “comprehensive management” or “full support” can mean different things to each business. It is preferable to specify tasks, deliverables, exclusions, the client's responsibilities and acceptance criteria.
If the work depends on the client providing information, the contract should explain that dependency. It is also useful to provide for how scope changes are approved and who can authorise additional work. An informal conversation should not be the only evidence of a significant extension.
Price, invoicing and payments
Distinguish how the price is calculated from when it is invoiced and when payment falls due. If there are milestones, it should be possible to link them to identifiable actions or deliveries.
Late-payment legislation may apply to commercial transactions. It is not advisable to assume that every agreed payment period is valid or to add penalties without checking their legal basis. The consequences of delay should be examined alongside both parties' obligations.
Breach and termination
A useful clause distinguishes a delay that can be remedied from a breach allowing the relationship to end. It should be reviewed what notices are required, whether there is an opportunity to remedy the issue and what happens to work already performed, documentation and outstanding payments.
Freedom of contract has limits. It should not be assumed that a broad exclusion will eliminate all liability or that any penalty will be enforceable simply because it appears in the document. Its validity requires an assessment of the law, the content and the circumstances.
Information, confidentiality and personal data
If the service involves access to business information, it is advisable to identify what must be protected and for how long. Where personal data is processed on behalf of the client, it may also be necessary to regulate the data processing relationship; a general confidentiality clause does not replace it.
Before signing, check that the signatory has sufficient authority and retain a complete version, including any annexes and quotations referred to in the contract.
Frequently asked questions
Can an accepted quotation have contractual effects?
It can. Its content, acceptance and the communications between the parties should be examined. Calling it a “quotation” does not, by itself, determine its scope.
Is it advisable always to use the same template?
A template can be a starting point, but it should be adapted to the actual service, its risks and the way the parties work. Irrelevant clauses can also create interpretation problems.
You can request a review through our commercial law and contracts service. Bring the contract, its annexes and the negotiation communications. This general information does not validate a contract or determine the consequences of a specific breach.
