Service Agreement Review Checklist

What is a Service Agreement?

A Service Agreement (also called a Consulting Agreement or Master Service Agreement) is a contract between a service provider and a client that defines the terms of their working relationship.

Common types include:

• Consulting agreements
• Marketing services contracts
• IT and software development agreements
• Managed services agreements
• Professional services contracts

Key Clauses to Review

1. Scope of Work (SOW)

The most critical section. It defines exactly what services will be provided.

2. Payment Terms

Understand when and how you'll be paid (or pay).

• Fixed fee: Total amount for the project
• Hourly/daily rate: Time-based billing
• Milestone payments: Payments tied to deliverables
• Retainer: Regular recurring payment

3. Term and Termination

How long does the agreement last? How can either party end it?

• Notice period required (30 days is standard)
• Termination for cause vs. convenience
• What happens to work in progress?
• Payment for completed work after termination

4. Liability and Indemnification

Who is responsible if something goes wrong?

5. Intellectual Property

Who owns the work product?

• Work for hire: Client owns everything
• Licensed: Provider retains ownership, grants usage rights
• Shared: Both parties have rights

6. Confidentiality

Often includes or references a separate NDA. Make sure you understand what information is protected and for how long.

Negotiation Tips

1. Cap your liability - Negotiate a limit (e.g., total fees paid)
2. Mutual obligations - Indemnification should go both ways
3. Clear scope - Push back on vague deliverables
4. Payment protection - Request milestone payments or shorter payment terms
5. Exit rights - Ensure you can terminate with reasonable notice

Service Level Agreements (SLAs)

If the contract includes ongoing services, look for SLAs that define:

• Uptime guarantees (e.g., 99.9%)
• Response times for support
• Performance metrics
• Remedies for SLA breaches (credits, termination rights)