Customer Service Contract

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Customer Service Contract

A Brief Introduction About the Customer Service Contract

A customer service contract is an agreement that makes certain that both the client and service provider comprehend the scope of work, the terms and conditions of its completion, and the complete cost. This contract is an agreement that forms a legal relationship between the parties, and the contract makes certain that both the client and service provider comprehend the scope of work, the terms and conditions of its completion, and the complete cost. The main benefit of this contract is that it is easy to track contract performance, expenses, and helps in invoicing, as well as revenue.

Who Takes the Customer Service Contract? – People Involved

This contract forms a legal relationship between a client and a service provider. Anyone who wanted to hire a service professional must insist on a service contract so that each and every party understands their duties.

Purpose of the Customer Service Contract – Why Do You Need It?

A small business owner may use this kind of customer service agreement in order to promote a positive, transparent relationship that your customers would appreciate.

Contents of the Customer Service Contract – Inclusions

The scope of work must furnish a comprehensive description of the responsibilities and deliverables that must be included in the contract. This contract must state the exact fees for each deliverable must be specified along with a payment schedule. In case you have a range of payment plans to select from, provide the client with these options before creating the customer service agreement.

This agreement should also detail the liabilities if the client is not happy with the deliverables, or you are not able to complete the project as assured. Also, you must provide a refund and compensation information in the customer service contracts, as well. The wording of this particular section must limit your liability in unforeseen situations and any other circumstances for which you don’t want to be held liable.

How to Draft the Customer Service Contract? – Points to Consider

While drafting this contract, both the client and service provider should be able to comprehend the agreement easily. You must avoid using jargon and difficult legal phrasing that confuses the meaning of the contrary to the average client.

Also, the contract shall include several questions:

  1. What would you do if your service provider misses a scheduled appointment?
  2. How often and by what method would you and your client communicate?
  3. When and how would payment occur?
  4. Would there be a penalty for late payments?
  5. Would it be possible for either party to end the contract early?

Businesses that use this type of agreement in order to hire a consultant or other type of service professional must consider how to protect their intellectual property (IP). IP could be extremely valuable, so you are required to decide how your service professional could use your property. At the end of your contract, there would likely be many boilerplate clauses, which are standard clauses seen in most contracts. The main reason of boilerplate clauses is to safeguard both parties in the contract and towards avoiding confusion or misunderstandings.

Negotiation Strategy

The structure of your customer service contract is important because it could impact several factors which may include;

  • Which party takes up the risk in the contract?
  • When payments must be made, and which party makes the payments?
  • How shall the terms of the agreement be fulfilled?

Benefits and Drawbacks of the Customer Service Contract

A customer service contract makes the billing service providers is much easier. The structure of this type of agreement focuses on tracking the work that is done and then billing for the work at a formerly decided upon rate. Also, a customer service agreement tracks the expenses and then provides an invoice towards their client for reimbursement. One of the main benefits is that it is easy to track contract performance, invoicing, as well as revenue. Also, both parties share a portion of the risk.

The disadvantages relating this type of agreement is in case the project deadlines are not being met, for instance, order changes might be required, and the client would likely require having a difficult conversation with their service provider. On the other hand, in case the project is completed before the schedule, the final sum of revenue and cost towards the client may decrease.

What Happens in Case of Violation?

If either party were not able to fulfill their part of the contract, it first the parties must discuss it amicably to settle the issue. Your first option might be to amend or alter the main contract simply. If altering the contract (1)was not an option, you will want to review the main contract to check what options for quitting the contract are stated in the original agreement. You might be able to come out of a contract without legal consequences if both the parties agree to how the contract could be quitted. In case both parties are not able to agree on how to solve the problem, you might require considering mediation or small claims court(2).

A good customer service contract is vital because it firmly outlines the relationship between the client and the service provider. By having this agreement in place could help in dealing with unforeseen events much easier, and could also decrease the risk of a dispute as well as resulting litigation amid a client and customer.