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A service agreement is a feature that can be found in some warranties and sales contracts.A basic warranty usually provides general assurances of quality or craftsmanship. Service Contracts of Service Agreements can’t go beyond this by stating that the customer is entitled to what all services in case of a product breaks or fails.
The basic problem with the oral agreements is that they are difficult to prove in the Courts when a dispute arose between the parties. Usually the Courts prefer written agreements as a substantial evidence to decide whose version of the truth to accept.
It typically addresses the following namely: • the parties to the agreement; • the service being offered; • the term of agreement; and • the compensation that will be provided to the Service Provider. In addition, Service Agreements may also provide specifics on: • how confidential information is to be treated upon the Service Provider's termination; • whether there are limitations on the Service Provider's ability to compete with the Customer's business upon the Service Provider's termination; and • how disputes between the Customer and Service Provider will be handled.
The parties to the Service Agreement are the Customer and the Service Provider. The Customer is the individual or the business seeking the service and the Service Provider is the individual or the Corporation providing the service.
Service Agreements are used to hire Service Providers or independent contractors, not employees whereas Employment Contracts are used to hire employees.
It ends when the service under the agreement is no longer provided or needed.