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2 Reasons Service Agreements are Necessary for Service Oriented Businesses – Video


Hello, I’m Doug Jackson, founding attorney of The Law Firm of Douglas G. Jackson. Today, I want to talk to you about two major reasons that service agreements are necessary for service oriented.

We’ve all signed them.  They are everywhere.  When you buy a service from any decent company, you’ll have to sign a contract called a service agreement.  If you’ve used an online service, even social media, you’ve signed a service agreement.  When you’re signing them, you likely scrolled through them quickly, or even clicked I accept without even reading.  It doesn’t matter if you read it or not; you’re contractually bound by the service agreement.

Why do businesses have these service agreements?  Why do they make you sign them?  Well, it’s simple.  It protects the business.

As a business owner who provides a service, you should have a service agreement, too.  How will it help protect you, you ask?  It depends on the terms of the service agreement, but here two major reasons that a good service agreement will help your business.

First, it will define your scope of service.  Specifically, it limits the scope of your service to only those things you actually intend to perform.  What that means is that it will define exactly what it is you will do for the client or customer.  It will say what is included, and it will define what is not included.  This is very important because often customers complain that you didn’t go above and beyond.  Well, your business is to perform the service provided.  Additional services cost more and often need an outside business to perform.  Many disputes and even lawsuits are surrounded by poorly defined scopes of service.  A good service agreement won’t only save you from frivolous and expensive lawsuits, it will also give your customers and clients managed expectations, which will keep everyone happier.

Second, it will explain what happens if a dispute does arise.  The only worse things about having a dispute, is not knowing how it will be resolved.  A good service agreement will make that clear.  It will say whether mediation has to happen before a court can decide the matter.  It will say whether the parties have to arbitrate in lieu of a lawsuit in court.  If a lawsuit is filed, it will let the parties know in which court the lawsuit will be filed.  A good service agreement will also make clear who will pay the attorneys fees and costs if a lawsuit does take place.  The only thing worse than a dispute is not knowing how a dispute will be resolved.  When a good service agreement makes this clear, the business is protected, and the customers or clients are happier.

Some people think contracts, such as service agreements are silly or needless.  Yet, they operate to manage expectations.  It is much better to know whether the parties agree on something or disagree at the outset that after service has already begun.  I’ve seen best friendships end due to legal disputes.  Contractual agreements save friendships and keep happier clients and customers.  A strong service agreement not only protects your business, but it also tells your customers that you care about their expectations and are anticipating them.

Remember, get your legal action with the Law Firm of Douglas G. Jackson.


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