Things Service-Based Businesses Should Include in Their Contract

Business contracts in New York serve to protect you and your client.  Service-based businesses have to adhere to the commitments they stipulated on the service level agreement (SLA) part of the contract. This includes the responsibility the service provider has to their clients, the quality of service which will be provided, the availability of that service and so on.

Business Contracts in New York Should Include These 5 Elements

Five of the most important components that service-based businesses should include in their service level agreement are the following:

business contract in new york

Objectives of the Service

This is the part of the SLA where you should clearly specify the goal of the services you’re providing.  This should include the purpose of the service or why it’s being sought out by clients (like saving costs or improving performance) and whether some of the technologies and skills required to perform the service will be internally provided or sourced out. Once this is written down, it should be clear to the customer what the objectives of the service are. The service provider should also know what’s expected of them and why.

Type of Service Provided

Description of the services that will be provided should be specified, including additional details that might be pertinent to the provision of service. If there are a set of services provided, each particular service should be defined. For example, in construction, the type of service covers every milestone – such as demolition, clearing, laying the foundation, building floor to floor, adding the interior and so on.

Measuring Performance

Once all the services expected of the provider are detailed, and the manner by which each service can be gauged should be provided. How each aspect of the service will be assessed will depend on the client.  For example, with construction, there’s usually a high level of scrutiny in most aspects of the service. Because of that, it drives the price up. High standards, when met, require equal compensation. For services like the internet, you could do away with other added services as long as the connection is okay. That’s because other services are less important than being able to send emails or check sites regularly.

Compensation for Service Provided

The teeth of the SLA comes in the form of compensation. If the company is not able to meet the base level of expected performance that’s stipulated in the contract, you can demand a financial consequence to applied to the service provider.

Terminating a Contract

Contract termination is often added to the contract to safeguard the interest of the client, in case the performance of the service provider falls below what’s acceptable. In legal term, this is called a critical service level failure. This can be phrased in a way that a series of chances are given to a provider to make up for previous errors. However, if the expectation is still constantly unmet, then the client should have the right to terminate the contract.


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