How to Write a Good Enterprise Service Agreement

20.01.2023

An enterprise service agreement (ESA) is a legally binding document that outlines the terms and conditions of a service provided by a company to another business or organisation. It is a crucial document that sets out both parties’ expectations and responsibilities, and helps minimize misunderstandings and potential disputes.

In this article, we will provide a step-by-step guide on how to write a good enterprise service agreement, including what to include and how to structure the document.

Step 1: Determine the scope of the service

Before you start drafting the ESA, it is crucial to clearly define the scope of the service being provided. This includes the specific tasks or services that will be performed and any limitations or exclusions.

For example, if you are providing IT support services, the scope of the service might include troubleshooting hardware and software issues, installing and configuring new equipment, and providing user training. It might also exclude certain types of support, such as custom software development or data migration.

Step 2: Identify the parties involved

The next step is to identify the parties involved in the agreement. This includes the service provider (i.e., the company offering the service) and the service recipient (i.e., the business or organisation receiving the service).

It is essential to clearly state the names and contact information of both parties in the agreement and any relevant legal entities (such as a parent company or subsidiary).

Step 3: Establish the term of the agreement

The term of the agreement refers to the service’s duration. This can be a specific period (e.g., one year), or it can be ongoing until terminated by one of the parties.

How to write a good Enterprise service agreementIn addition to specifying the term of the agreement, it is also important to include provisions for renewing or terminating the contract. For example, you may want to have a clause that allows either party to terminate the agreement with a certain amount of notice (e.g., 30 days).

Step 4: Outline the payment terms

Payment terms are a vital part of any service agreement, as they outline how and when the service recipient will pay for the services provided.

Some standard payment terms include:

  • Fixed fee: A fixed fee is a one-time payment for the entire scope of work outlined in the agreement.
  • Hourly rate: An hourly rate is based on the number of hours worked by the service provider.
  • Monthly retainer: A monthly retainer is a predetermined amount paid each month for a certain number of service hours.

Specifying the payment terms clearly in the agreement, including the rate or fee being charged and any applicable taxes or fees is important.

Step 5: Include any applicable warranties or guarantees

A warranty is a promise made by the service provider that the services will meet specific standards or specifications. A guarantee promises that the service provider will take specific actions if the services do not meet the agreed-upon standards.

It is essential to include any applicable warranties or guarantees in the agreement, as this helps to protect both parties in case there are any issues with the services being provided.

Step 6: Address any potential liabilities

An enterprise service agreement should include provisions addressing any potential liabilities that may arise as a result of the services being provided. This might include a clause outlining the service provider’s liability for any damages or losses resulting from the services or stating that the service recipient assumes all risk for any damages or losses.

Step 7: Include any relevant terms and conditions

There may be additional terms and conditions specific to the services being provided or necessary to protect the interests of one or both parties. These can be included in a separate section of the agreement or incorporated into the document’s main body.

Some standard terms and conditions that might be included in an enterprise service agreement include the following:

  • Confidentiality provisions outline the obligations of both parties to keep certain information (such as trade secrets or business information) confidential.
  • Intellectual property rights: These provisions outline who owns any intellectual property (such as patents, trademarks, or copyrighted material) that is created or used in the course of providing the services.
  • Force majeure: A force majeure clause protects both parties from liability if the services cannot be provided due to circumstances beyond their control (such as a natural disaster or pandemic).
  • Governing law: This clause specifies which jurisdiction’s laws will govern the interpretation and enforcement of the agreement.

Step 8: Review and revise the draft agreement

Once you have drafted the enterprise service agreement, it is essential to review and revise the document to ensure that it accurately reflects the terms and conditions of the service being provided. This might involve soliciting input from legal counsel or other stakeholders or reviewing the agreement against industry best practices or standards.

Step 9: Have the agreement reviewed by legal counsel

It is generally a good idea to review an enterprise service agreement by legal counsel before finalising it. A lawyer can help to ensure that the agreement is legally enforceable and protects the interests of both parties.

Step 10: Finalize and execute the agreement

Once the enterprise service agreement has been reviewed and revised, it is time to finalise and execute the document. This typically involves both parties signing and dating the agreement and possibly exchanging copies or original signed copies.

Conclusion

An enterprise service agreement is a crucial document that outlines the terms and conditions of a service provided by one business to another. Following the steps outlined in this article ensures that your agreement is clear, comprehensive, and legally enforceable.

We hope this article has provided a comprehensive guide on how to write a good enterprise service agreement. Let us know if you have any additional questions or need further clarification on any of the points covered.

How can COREDO help you?

If you require professional advice in the field, we have the appropriate consultants to help. You may view the services that we can offer through this link: https://coredo.eu. 

LEAVE AN APPLICATION AND GET
A FREE CONSULTATION