Whether your agreement is intended to cover a simple transaction such as a website design or a more complicated, long term service agreement governed under a master services agreement (MSA), you should focus on being very clear when defining the scope of services agreed upon and how changes are made to the services. With clear definition, the purchaser is clear that they’re getting exactly what they’re paying for and the service provider is comfortable that they’re not having to work beyond what they originally intended with little to no pay. Considering the following elements of the contract to ensure both parties have a clear understanding of the arrangement
- Scope: This is very specific to your industry and the type of services you provide, but the more details you share here, the more confident both parties will feel about getting everything agreed upon. For software design, for example, you should specify what functionality the software will have, what platforms it will work on, and what screens will be available. You would also want to specify the amount of documentation you will provide. The scope of a construction project, for example, would be completely different. You may also contract to perform a certain number of revisions within the scope to keep request changes under control. In many cases, the scope of services clause in the contract incorporates outside documents such as proposals, blueprints, and more to provide the clearest definition of what is and is not included in the scope of work.
- Payment: Contracts should not only clearly state the amount charged for services, they should also contain a clause that states when those payments are due, when a company can expect to be invoiced, and whether the payment is a flat fee or if the service provider might bill for expenses as well.
- Term: Contracts should always have a duration, renewable easily if necessary for on-going agreements. These dates should also cover exactly when the service provider is expected to provide work including mockups, final product, and requested changes.
- Work Product: When creating a final product, service providers often use mock-ups, wireframes, proposals, drafts, and other parts that go into the final. You may want to specify what the work product is for the contract to ensure you’re getting everything you need as well as the required format.
- Ownership: Ensure that ownership of your company’s materials stays with your company and the service provide has limited (or no) access to use this material for their own purposes (advertising, etc.) and that you’re purchasing all rights and intellectual property to the work completed by the service provider.
- Change Orders: Often as you get into a project, you’ll find that the defined scope will change. Rather than allowing scope creep, specify clearly how change orders will be handled and what types of changes will affect pricing and timelines. Setting these expectations clearly up front makes people more agreeable when complex or costly changes are required down the road.
Bring in the expert advice of the team at Virtus Law Firm to help you set up your contracts and master services agreements. Together we can ensure you’re prepared to purchase or sell your services while being fair to both parties. Call us today at 612.888.1000 or email us at email@example.com set up a consultation.