Businesses are run in many forms. Some are standalone businesses that provide product or service on the spot; others provide consulting service, run and accessed remotely. If you are a business owner performing services to other businesses in the related or non-related field, then it is essential to draw a service contract. This contract will protect and safeguard your business dealings and assets and at the same time contribute to your revenue.
So, what is in the service contract and what elements should normally be in order to consider it viable or legitimate. The answer is everything, from what the business provides and how much does it earn in return. This contract has the description of the work performed by the owner and/or its employees. Depending on the nature of the task, it may contain time schedule for the tasks to be performed.
Another important element of a service contract is the payment term – for different products or services. Payment terms should contain the amount to be paid for a certain service or any compensation consulting services would bring in and the date at which the payment is due. It may also contain information for partial payment or payment options. The contract usually mentions who needs to pay for expenses and when that payment needs to be made. If the clients are obliged to pay for expenses such as travel expenses, transportation and materials to perform the task, all that details should be included in the contract.
Consulting service calls for a detailed service contract. It may include things like daily activities that are related to the job process. It may also contain the termination rights when the job is at its last stage or completed. Each party has certain rights to terminate the project and those rights are clearly mentioned in the contract. However, the rights and reasons for termination should be given in writing, typically 30 to 60 days before the termination date. All other terms that are not mentioned in this information should also be included in the service contract clearly for the clients to understand.
Sometimes, it is necessary for the business to hire employees who provide consulting services to the business clients. This calls for employment agreement with the employee in addition to the default service contract. An employment agreement is usually a letter offering the employee the vacant position in the business. This letter details the terms of the job, title of the job, salary paid to the employee on a weekly, bi-weekly or monthly basis and so on.
Then there are terms and conditions specified in the employment agreement to which the employee should agree. This may include responsibilities and requirements that the employee should follow, signed by all the parties involved. Any additional agreements not mentioned in the original agreement can be amended later, also signed and agreed. When the business is involving independent contractors to the mix, it should make sure that the contractors pay their taxes as required and on time.