Service contract definition

Legally, parties must keep in mind that if the contract does not cover the whole relationship, the law would cover the part that the contract does not cover. It is the civil and commercial codes which would be applicable in this kind of situation.
However, law is still applicable for the general good execution, like good faith. Plus, Singaporean’s law provides a framework for termination of the service agreement. As supplier or customer may ended the relationship. More details would be given bellow.

To sum up what is a service contract: it will begin with a brief introduction which presents parties: supplier and customer and when will start the contract, the date.
Furthermore, usually it is written that with this service contract parties agree that it makes rights and duties for each other’s to respect.

Download your Service Agreement drafted by Lawyers


  Word Document (.docx)

Main clauses of the service contract

As it was said before, this service contract is a legal instrument made to avoid conflicts, thus it is really interested to entrust the redaction of your service contract to an attorney, who is a competent person in this area.
It is more simple to classify clauses in thematics, i.e. : services have to do with marketing, business development, accounting.
Contracts are also free in their redaction. But the following clauses are the main importants, it is of course possible to provide additional clauses depending your field activity.

1. Identification of the parties:

The identity of your customer has to be well known. And make sure to verify that the client has the ability to contract. If it is not the case unfortunately the contract could be annul.

2. Identification of the services:

You have to make sure both parties agreed on such details. For instance, if you provide marketing services your clause could be like this « To conduct marketing research to identify industry trends and commercial opportunities».

3. Obligations of both parties:

The rights and duties have to be as precise as possible. Indeed, this is the heart of a service contract. Supplier obligations could be the way he will addresses the service, the date intervention of each service. Customers also have obligations toward supplier, then this one may work in good conditions. For instance: he must be available to validate the project steps and provide you with accurate information within a reasonable time.

4. Set prices:

Prices have many aspects and therefore different legal consequences. According to what you may prefer, establish a price for each service or determine the due date of each payment and how they will be done. Also, an indexation clause could be interesting in the following situation: if the service depends on a raw material because their cost is variable in time, and this may affect the parties’ interests. This clause has an impartial index number which means not determined by one of the parties.
Price variation will depend on the variation of the index number. Periodicity has to be determined too. The clause will discuss the fact of the frequency parties will be review the price. This periodicity is free, parties agree on this. It may be each year, each month or even each semester.

5. Termination:

Either the client or the supplier according to Singaporean’s law may legally terminate the service contract. The client may unilaterally terminate the service contract without any justification, it is one of his rights. Indeed, he has expectations and if he does not obtain what he asks for he may stop the relationship. However, he has to give notice and pay for the services that had already been provided. The service supplier has also this right but under circumstances only. It is for cause, which means a specific behavior from his client that make him want to unilaterally terminate the service contract. For instance, if the client does not pay the service supplier on time, that constitutes a cause.

6. Confidentiality:

Both parties may give to each other confidential information, this kind of clause reassure also the client because such a clause constitute rights and if there is any violation the author of the violation may be sentenced to damages.

7. Exoneration of liability:

It is essential to plan for cases in which the contractor may not be held liable. What you will include in will depend about the nature of your work and your situation.

8. Intellectual property:

It corresponds to a group of rights like building property except that it is for immaterial things such as ideas, creation, or patent. Then, even if you share some aspects of your creation, it will be protected by this clause.

9. A clause related to the authority of the jurisdiction and an other related to law applicability to the contract even one about arbitration clause:

A celerity matter have to conduct parties to think about this aspect of the service contract. Indeed, such clauses organize in advance which jurisdiction is appropriate according to the parties and which law will govern the agreement.

The first one is called « jurisdiction clause ». An international convention from the Haye Netherlands published in 2005 on choice of court agreements. Parties at this convention are the European Union, Mexico and Singapore, all of these states ratified this convention. This clause is usually used for preoccupations like cost or disagreement execution. Most of the time, professionals will indicate the jurisdiction of the place of their registered office. However, in view of the issues, parties attach importance to these clauses and the negotiation might be long and difficult

The second correspond with, the law indicates by the parties in view of resolve their dispute. They are generally free to act in their indication. Nevertheless, if the law is used by a judge from another country, this one may move aside the law when it is against mandatory laws or public order.

Finally, the arbitration clause. The arbitration panel renders an arbitration award, it is therefore not a state court that rules on the dispute. This kind of clause offers many advantages such as celerity of the procedure contrary to state jurisdiction. Also, the confidentiality since the arbitral award is not subject to publicity because it is not rendered in the name of the State, therefore it is not the subject of a publication that can be consulted by all.

However, there are also inconveniences: first, the cost of this private justice. Indeed, arbitrators are highly qualified experts and thus, their pay is quite high. Like the other clauses, you have to be careful the way you negotiate and write it in your service contract. It has a particular legal regime, positive law accepts his own autonomy toward the contract, which means, if the contract is found invalid or null and void, the arbitration clause is still valid, as long as it respect validity conditions. In addition, his validity conditions are relatively supple. It suffices, for instance that the clause simply contains the word « arbitration » without any more information, and it will be judge as an arbitration clause. Here again it is necessary to put you in touch with a legal expert such as an attorney to obtain a high-quality clause.

The execution of a service agreement

Like all agreements, service contracts have to be lead with good intention and good faith with the aim to having correct durable relations. It is possible to write it in the introduction of the service contract, to talk about the way the contract will be lead just to make sure both parties are well informed about their expectations.

For example, as a supplier if you need a period because your services depend on any other joint contractor which means you have to organize in advance your work it is important to notify the other party.

Another essential aspect, is to think about those agreements like a whole, you will interact with a lot of clients thus, clauses like non-sollicitation or intellectual property have to be well detailed according the services you supply obviously.

Furthermore, it is necessary to resort to a professionnel like an attorney. Indeed, each service has his own particularities and difficulties. To avoid such problems it is essential that your contract cover the whole process.

Plus you have to keep in mind that this service contract create rights, and by signing you commit yourself to provide services and get pay in return. Then, If one of the partners fails to fulfill their obligations or performs them poorly, they could see their civil liability incurred under Singaporean’s law. Which concretely means that you could, in addition to being obliged to meet your commitment, be condemned to financial compensation in the form of damages.

Contact us to draft a service agreement tailored to your needs

310 client reviews (4.8/5) ⭐⭐⭐⭐⭐

Ask an expert