Draft and Review Service Agreements in Carrboro

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What is a Service Contract?

 

A Service Contract is a legal agreement between a customer and service provider, which establishes terms of a relationship. These are commonly used by businesses or individuals that hire an outside party to perform a specific service.

What are the key terms of a Service Contract?

 

Service Provided: clause that outlines the specific service and deliverables being delivered by the contracted service provider.

 

Payment Information: clause that lays out payment terms, which include amount, how often, which medium, expenses, etc.

 

Modification Process: section that defines what happens when scope changes of the engagement, which often happens with service providers.

 

Ending the Contract: section that outlines how each party can end the contract or when it will naturally come to an end.

 

Contractor Status: section that outlines the status of the individual or service provider you are using, so that they aren’t confused as an employee.

What issues to keep in mind?

 

Contractor Status – it is important to make sure the service provider you are using is not confused as an employee. This may trigger unwanted tax implications, so make sure it is clearly defined in the agreement.

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Change Orders and Modification – Make sure the change order and/or modification process is very clearly defined. While we all want things to go smoothly without hiccups, things happen, and you may need to deviate away from the initial engagement scope. Make sure expectations are set clearly for when this happens.

Resources

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