The main elements of a service contract include the clearly stated offer, acceptance of said offer, a statement of intention of legal consequences and the consideration. Without all four of these elements, a contract may not be legally binding. Other elements may include a description of the service provided, a schedule of the completion of work or payments, rights and ownership pertaining to the completed work and terms of cancellation.Continue Reading
The offer can be a detailed quote from the contractor for an estimation of work. Proposals, letters of intent or general estimates are not acceptable forms of an offer, and every round of negotiations must include a revised offer. The offer, once it is legally accepted in the form outlined, becomes the terms of the contract.
The statement of intention of legal consequence outlines possible ramifications for both parties in the event of non-payment or non-delivery of goods. Both parties must agree with and understand the legal consequences for them to be legally binding. If the contract is not legally binding, this must be explicitly stated on the contract.
The consideration given on a contract is the value that each party promises to the other. In a professional service contract this usually refers to services in exchange for monetary payment, but can also be in exchange for an agreement to do or not do something under legal penalty.Learn more about Business Communications