What Is a Standard Service Agreement?
A Standard Service Agreement is a contract that establishes parties’ legal rights and obligations to the contract. When you regularly enter into many business relationships, you don’t want to start from scratch each time. Service agreements between two parties may be unique to each situation, but a standardized form is meant to include the legal provisions your company wants as part of every transaction.
Standard Service Agreements are a critical part of a successful business. They save time and money by letting you streamline the contract management process. With advanced technology like clickwrap at your disposal, you can easily use, modify, and track Standard Service Agreements throughout its contract lifecycle. Templateable workflows and automation allow multiple departments in your business to self-service Standard Service Agreements and reduce costly delays.
What Is a Standard Service Agreement?
A Standard Service Agreement is a legal contract between a client and a service provider. The agreement outlines important details about the business relationship and the duties owed to one another. It may include information like pricing, ownership, shipment details, and much more. These agreements protect both the service provider and the customer by creating clear and enforceable guidelines both parties can follow.
A Standard Service Agreement is a templated version that your business will use for most clients. Instead of creating a new Service Agreement for each client individually, you can utilize the standard form. The standard Service Agreement is fully vetted by your legal department and protects your company when signed as is. Modern contract management software gives you the tools needed to modify these standardized agreements when necessary.
Examples of a Standard Service Agreement
A Standard Service Agreement is commonly utilized by service providers, including:
- Cable companies
- Telecommunications providers
- Utility companies
- Software companies
- Consultancy companies
- Government entities
For example, a cable company may offer a standard Service Agreement that outlines what it will provide as part of its services. This could include details on the channels available in a particular package, installation details, internet and modem requirements, details about repairs, billing, and much more. A standard Service Agreement is utilized for most cable company customers, as they are not negotiating different terms with the company. Using a standardized agreement saves the company a great deal of money in drafting and retaining contractual agreements.
The purpose of a Standard Service Agreement
The purpose of a standard Service Agreement is to create a one-size-fits-all document to handle most customer relationships. This template provides the framework for the legal agreements between the parties in a uniform way. A well-drafted standard service contract is designed to apply in most situations.
It is also meant to provide a starting point for negotiations—should any occur. A larger company may want to negotiate the terms of the standard agreement. Having a template ready to go reduces the time it takes to reach the acceptance stage of a customer agreement.
When do I need a Standard Service Agreement?
If you offer services as part of your business offerings, you will want to develop a standard Service Agreement. It describes the services being provided clearly and accurately. It also details the mutual benefits and obligations of the contract to avoid disputes down the road. Accurate descriptions of service offerings give the customer a clear idea of what they may expect from this relationship.
A standard Service Agreement also saves you a great deal of time and money. When you don’t have to form new agreements from scratch, you can focus more time on getting new customers rather than cumbersome contract negotiations. Template agreements can be modified when necessary, but in many situations, that standard Service Agreement is sufficient to get to the acceptance stage.
Parts of a Standard Service Agreement
Standard Service Agreements should cover the entirety of the agreement and standard legal clauses. It should outline all parties’ mutual obligations and ensure they agree. Here’s an overview of what a standard Service Agreement typically includes:
- Duration of agreement: The standard contract should include the length of time the contract will last. If this is not standard between customers, this section can be left customizable in contract management software.
- Responsibilities/Scope of work: A clause that clearly outlines all of the responsibilities and duties owed by the service provider. This will include most of the important terms of the contract. A well-drafted responsibilities section is the key to creating enforceable agreements and avoiding work that was not part of the original bargain.
- Payment terms: If the Standard Service Agreement contemplates monetary payment for the services, the cost of the services should be clearly outlined in this section. It should include service rates per hour, one-time payments, product costs, and anything else the customer is expected to pay as part of the agreement.
- Dispute resolution terms: A standard agreement should include a section about resolving disputes. This area may require arbitration or mediation of disputes before a lawsuit may be filed. Others may contain a choice of law provisions or other legal provisions that dictate how to handle any future disagreements.
- Intellectual property rights: A service contract often involves your company’s intellectual property. This section addresses who owns the intellectual property and any limitations on its use.
- Liabilities or indemnification: This section limits your company’s liability in the case of an accident or liabilities that may result from the actions of third parties. It may even contain identification provisions if the customer is the cause of damage to the service provider.
- Modifications or amendments: Many standard Service Agreements require updates over time. A clause that allows you to modify the agreement in the future can be made to account for pricing changes, rate updates, or other necessary changes.
- Termination: The standard Service Agreement should dictate how to terminate the agreement. It will outline details about who may end the relationship, when, and the effect of ending the contract. This could include early termination penalties, liquidated damages, or other consequences.
This list comprises some of the most common sections of a standard Service Agreement, but it is not exhaustive. A well-drafted template should meet Legal review before being used as a standard document.
Limitations of a Standard Service Agreement
Standard Service Agreements are a starting point and may need to be adjusted for certain business deals. Although they are pre-approved by Legal, material alterations will continue to need their review. This is especially problematic if standard Service Agreements are negotiated using “old-school” methods like email redlining and phone calls back and forth.
A lack of automation when using standard Service Agreements may make them clumsy and prone to mistakes. They may also face enforceability problems when not properly tracked and audited. If your company cannot efficiently find the agreement during a dispute, the contract may be unenforceable.
How to create a Standard Service Agreement
Your company should utilize modern contract management software to create a standard Service Agreement. This technology allows you to draft standard Service Agreements from standard templates that you can modify to fit your needs. Legal can review it and finalize the standard version of your contract.
You can then build a template Service Agreement with sections that automatically fill in for new customers. These agreements are then stored and analyzed for important metrics, like renewal or contract end dates.
Managing Standard Service Agreements
Your company can use automated tools to reduce the time-consuming task of managing standard Service Agreements. Highly adaptable tools in the Ironclad software allow deep integration with existing systems. The software will also track and analyze contract metrics for any document created or modified within the system.
In the traditional model of managing contracts, you were required to store documents in cloud storage or even physical filing cabinets. Instead, the Dynamic Repository lets you automatically store documents or analyze information like:
- Party identification
- State and end dates
- Contract terms
- Contract renewal dates
- Workflow issues throughout the contract lifecycle
- Template and automation suggestions
Why Standard Service Agreements can be time-consuming and hard to keep track of
If a standard Service Agreement is not automated, its use as a template is very limited. In fact, it can be a pain to manage because contracts are stored in separate systems that cannot communicate. This increases the chances a record could be lost or a significant amount of time is taken to find it.
Automation increases transparency and makes it easier to create Service Agreements across all departments.
Automating workflows for Standard Service Agreements
Ironclad’s Workflow Designer tool lets you implement automation throughout your company. It will streamline your process of creating a standard Service Agreement that can be modified by different departments and countersigning parties. Automation can reduce contracting time by 80% or more.
How templatable workflows can help simplify the process
Templatable workflows simplify the effort of getting your contract from start to finish. It ensures each Service Agreement complies with legal requirements without requiring a manual review. With your template at the ready, you are not forced to create it from scratch. This institutional memory of your business agreements in one place gives you up-to-date information and saves money.
Why standard Service Agreements are hard to manage (without the right software)
Most companies keep their standard Service Agreements in separate areas that cannot communicate digitally. They are isolated processes that create redundant work for staff that is time-consuming and revenue-wasting. This process is streamlined and made efficient through automation and centralized record-keeping with the right software.
The solution to your standard Service Agreement needs
Why use digital contract management for Standard Service Agreements?
Standard Service Agreements are dynamic documents you can effectively manage with the right software. Automation and templating can save valuable time and increase your revenue. You can reduce turnaround time and focus on winning new customers.
Try a free demo of Ironclad today to start automating your contract lifecycle.
- What Is a Standard Service Agreement?
- Examples of a Standard Service Agreement
- The purpose of a Standard Service Agreement
- When do I need a Standard Service Agreement?
- Parts of a Standard Service Agreement
- Limitations of a Standard Service Agreement
- How to create a Standard Service Agreement
- Managing Standard Service Agreements
- The solution to your standard Service Agreement needs
- Why use digital contract management for Standard Service Agreements?
Want more content like this? Sign up for our monthly newsletter.
Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.