The document provides detailed instructions for creating and using service agreements, emphasizing the importance of clear terms and conditions to avoid ambiguities. Key elements include the appointment scope, professional charges, duties of both parties, ownership of documents, indemnity clauses, and confidentiality measures. It also addresses the necessity of compliance with the Indian Contract Act and offers guidance on dispute resolution, arbitration, and legal jurisdiction.

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Service
Agreement!
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2. Introduction
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3. A decade ago, people used to work on mutual understanding and moral value to carry out
their legal activities through professionals like CA, CS or advocates but then the same
people had start dealing with each other in proper black and white form.
So, how the things turn upside down, why the verbal promises is replaced by written
clauses and trust turns into an agreement. Basically in the changing scenario of the
corporate world, professionals are also evolving through the practice of the market. Since
every form of business be it a proprietorship, partnership, LLP or Company is engaging
professional in one or other way, Professionals had experienced that having a contract or
an agreement makes their work easier and hassle free as every terms is written in black
and white and there is no place for ambiguity.
It can be said without any iota of doubt that parties to any agreement consider themselves
more secured as it provide transparency in the work. At the time of execution of any
agreement one must keep in mind that an agreement should be balanced one and it should
be as per The Indian Contract Act, 1872 and law of the land, this will enable the parties to
enforce any clause during distress or seek suitable remedy from court of law.
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4. Important T&C’s
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5. 1. Appointment & Scope of Services: firstly, it is necessary to mention, the professional appointed has
accepted its appointment in good faith and with free consent and mind i.e. without any kind of fraud,
undue influence and scope of work needs to be elaborated in order to left no room of confusion.
It should also include the manner in which any additional work to be dealt with which is neither
specifically mentioned in the scope of work nor agreed at the time of entering into an agreement. like
whether the additional work has to undertaken or not and if the same has to pursue, then what will be
amount to extra commercial charges and how and what would be the formula and methodology of
deriving it.
2. Professional Charges and applicability of Taxes etc.: Professional charges must be mentioned like
whether the same are charged on hourly basis or on lumpsum fixed amount basis.
Tax treatment on professional charges also mentioned whether the same would be inclusive or
exclusive of taxes like GST as per Goods and Service Tax Act, 2016 and time to time amendment
therein. Like in case of charges from law firm, reverse tax mechanism is applicable as under section 9
of the GST Act, wherein they are not required to impose GST on the services provided by them.
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3. Period: Period of Agreement to be mentioned specifically like 1 or 2 year etc. further, also important
to capture the treatment of agreement after expiry of period, means herewith, whether the
agreement be extended automatically and parties would decide before expiry of period.
4. Reimbursement of out of pocket Expenses: Intent of this clause is to remove doubt at later stage like
how the travel expenses, one to one meeting expenses, government filing fee etc. would be meet out,
so whether the additional charges for the same, if any, to be mentioned in the agreement from the
day one or the parties to the contract can simply mentioned that above expense would be required
prior approval of other party before expenditure.
5. Duties of Professional: Roles and duties of the Professional must be specified clearly without
keeping any room for ambiguity. For eg. Timeline for work completion, not to give any false
statement, not to indulge in any wrong practice, work according to scope of work etc.
6. Duties of Owner: Agreement should state the duties of the owner as well taking services from the
professional like to make timely payment, not to make any false statement, provide time to time
desired information’s to the Professional etc.

7. 7. Ownership of Documents & Information: Any documents, records or materials prepared by the
Professional while rendering his services to the Owner shall be handed over to it. The Owner shall be
the sole owner of the same and Professional shall not claim his ownership and charges paid to it for
rendering services shall be the sole consideration.
8. Warranties and representation by the Parties: Extra precaution and time needs to be given while
drafting warranties and representation of the parties. It helps a lot at the time of dispute and in the
court of law. Some of the W&R’s are (1) both the parties have the right to enter into this Agreement,
(2) both the Parties hold the licenses, registration and done all the compliance as required for
providing and availing services, (3) authorised to enter into an agreement and (4) have proper
infrastructure, experience and knowledge to carry-out the scope of work.
It is also important to mention specifically that the W&R’s would not only require to be fulfilled and
complied at the time of entering into an Agreement but throughout the tenure of the Agreement.
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9. Intellectual Property Right: All IP related information including goodwill, relevant registration,
trade secrets, and right in relevant copyright, patent, trademark shall and will be the Sole property of
the Company/ Owner. The Owner/ Company can use the same without any restriction and the
Professional shall use only with the written consent of the Client. For eg: Professional has provided a
service of trademark registration to the Company. On successful registration, the Company/ Owner
can use the said mark for his business purpose, but the Professional shall use only after obtaining
necessary approval from the Company/ Owner in the manner as may be permitted by the Company/
Owner to the Professional and at the time of termination, shall duly hand over the said mark to the
Company/ Owner.
10. Confidentiality: It is important to capture this clause to keep the information and documents
secured as shared with the professional by the Company. Also lay down the type of information’s and
document be shared and to be kept secure and save from unwanted disclosures.
So it is very important to define the confidential information properly mean thereby what would be
considered as confidential and what type of information’s and documents would come under the
ambit of it. It is also important to mention that who and how someone can have access to whose
confidential information’s.

9. Handover of Documents: Upon the expires by effluxion of time or termination of the Agreement, the
Service Provider shall hand over all the documents, confidential information, records of the Client
prepared on his behalf by the Service Provider.
11. Indemnity: the term Indemnity is defined under Section 124 of the Indian Contract Act, 1872
wherein it is stated that “A contract by which one party promises to save the other from loss caused
to him by the contract of the promisor himself, or by the conduct of any other person, is called a
"contract of indemnity".
Under the Service Agreement with the Professional, Indemnity clause helps to protect the Party from
the wrong doing of other party under the Agreement. In case of breach of duty on the part of each
Party, the Party committing the default shall indemnify the other party and make good the loss
suffered. For e.g. Suppose a person had provided a professional Service and relied upon which other
person has acted and consequently other person has faced legal actions and losses, now in such a
scenario, other person may ask the first person to indemnify from the losses occurred due to its
mistake.
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12. Force Majeure: This clause specifies that what would be the scenario which will be considered as
beyond the reasonable control of the Parties wherein, party in default shall not be responsible for the
non-compliances. Like Fire, drought, earthquake, lockout etc.
13. Termination: Terms on which the agreement stands to be terminated shall be mentioned specifically
in the Agreement. Few of the clauses can be:
■ on completion of service
■ on expiry of the term
■ continuous delay in completing the work etc
■ abuse/insult of parties
■ misuse of information and records
■ on breach of duty
■ non payment of fees on time
■ Notice Period which needs to be given need to be mentioned.

11. 14. Miscellaneous Provisions:
A. Bribery: Professional shall not offer any kind of bribe to get the work or to get the work done
and shall not support any corruption activities.
B. Relationship: What would be the legal relation between both the parties. Will it be of Principal
to Principal basis or Principal to Agent basis.
C. Notice: The Agreement must specify the address where Party to the agreement shall serve
notice and mode of communication.
D. Conflict of Interest: Professional must ensure that there is no conflict of interest while
rendering its services to Company.
E. Severability: In the event any clause being unenforceable in whole or any part, for the time
being, then all other clause shall remain enforceable and valid and unenforceable part shall be
severed from the remaining of agreement.
F. Time is Essence: Time is Essence meaning thereby that the assigned work must be completed
within the given time period and not goes beyond that.
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G. Assignment: Can the work, benefit, obligation etc. can be assigned to any third party or not? If
yes, then will there be any prior approval for the same.
H. Waiver: Whether the waiver of any clause would be allowed or not this must be specified.
I. Modification: The Service Agreement shall be modified only with the mutual consent of the
Parties.
15. Arbitration: In case of any dispute, the Parties can mutually agree to settle the dispute through
arbitration also and same shall be carried out as per the provision of Arbitration and Conciliation Act,
1996 and amendment therein from time to time.
16. Jurisdiction: Which court shall be entitled to entertain the dispute, if any, arise between the Parties
to the agreement.
17. Governing Law: what would be the governing laws for the Agreement whether it would be of India or
of some particular state or of some other country.
All the above clauses are illustrative list not exhaustive, Terms and conditions vary on basis of
parties, nature of work, scope of services etc. Majorly above clauses creates a significant impact on
the agreement and makes it more qualitative.

13. Thanks
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