Home – New Forums Starting your journey Service Agreement

  • This topic is empty.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • #982487
    GSanders12
    Member
    • Total posts: 201
    Up
    0
    ::

    Hey guys, I recently came across this article on a site for Australian Service Agreements with clients. I am servicing my clients with a weekly lawn care/home care maintenance service in which I charge monthly. The following is from the article:

    You should keep an eye out for the following terms when reviewing a service agreement:
    The term of the agreement (make sure it’s not for longer than you intended).
    The fees and expenses that the service provider will charge.
    The insurance, taxation and superannuation obligations of the parties (generally you want each party to take care of these themselves).
    Whether the service provider can subcontract the services to a third party.
    Confidentiality and privacy clauses (make sure these are included if confidentiality is an issue for your business).
    Service agreements are very common and can be used in a wide variety of circumstances. The chances are you will see one in your start-up career.

    With all of these things stated in the article.. I was wondering how i could apply it to my own situation for INSURANCE ,TAXATION, and SUPERANNUATION. I am contracting all of the work out to another company to do the work for the clients. Do I have to have insurance right when I sign the contract or can I get it after? Or do I need it at all since I am contracting out to another company who has insurance?

    Also what do I do about taxation and superannuation? If you guys could help me implement all the right things in my service agreement with my client that would be great. I can’t afford a T&C agreement to be drafted by a lawyer since my budget is only at $500.

    Thank you.

    #1137072
    Divert To Mobile
    Member
    • Total posts: 2,751
    Up
    0
    ::

    Hi Gerry,

    This could possibly be the most important document for your business, you need to shell out the $ and get it done right. Spend some time browsing through the horror stories on the forum about jobs started with poorly constructed agreements before you decide to do cut this corner.

    Steve

    #1137073
    JacquiPryor
    Member
    • Total posts: 2,344
    Up
    0
    ::

    I agree with Steve – in your scenario it would be worth the $$ .. however, for information purposes:

    1. The client is hiring you not your contracted company, so, yes you should also have insurance – and I would suggest you have it in place before any work is done.

    If a client has a complaint or claim they’ll be coming to you to fix it – so, the right insurance will cover you. You might then have a claim against your contractor/their insurance.

    2. As to tax/super – this might depend on who your contractor is and whether you are the only work they have. Basically you need to be sure in the eyes of the tax office they are actually a contractor and not deemed as an employee. This page might help: http://www.ato.gov.au/content/00326433.htm.

    It sounds like you will need a couple of ‘service agreements’ in your business:
    1. Between you and contracted company who is doing the work
    2. Between you and the end client receiving the work

    They will obviously be a little different from each other, as the expectations of the parties will be different.

    #1137074
    Kennethti
    Member
    • Total posts: 415
    Up
    0
    ::

    I agree with the others that you need to have legal advice in putting together your terms and conditions. But generally, in response to your question:

    1. You should always have business insurance, particularly, public liability and personal indemnity. The costs of your services must take into account your insurance costs.
    2. In relation to taxation, you should work out whether GST applies to your sales, and if so, make it clear that GST is part of the price.
    3. In relation to superannuation, this may or may not be relevant to you, however if you are providing services to clients it would be unlikely that they must pay you an additional amount for superannuation – you are not an employee.
    #1137075
    alliedib
    Member
    • Total posts: 453
    Up
    0
    ::
    GSanders12, post: 156240 wrote:
    I am servicing my clients with a weekly lawn care/home care maintenance service in which I charge monthly.
    I am contracting all of the work out to another company to do the work for the clients. Do I have to have insurance right when I sign the contract or can I get it after? Or do I need it at all since I am contracting out to another company who has insurance?

    Realistically you need a Business Insurance policy once you commence business, not when you commence operations.
    The fact that you contract the work out is irrelevant – as mentioned the contract for the work is between you and the customer. In the event of a claim you may be named as one of the defendants (due to the contract with the customer), otherwise you may be brought into the action with a vicarious liability – your policy will include costs involved in defending the claim.
    Need to look at other policies as well including Statutory Liability (covers for penalties for OH & S Breaches or legislative breaches) and perhaps Workers Compensation (depending on the relationship that you have with your Sub-Contractors). Professional Indemnity may be needed if you have taken on Contractors with a promise of $X worth of work.

    Regards,

    Mark

    #1137076
    Kennethti
    Member
    • Total posts: 415
    Up
    0
    ::
    alliedib, post: 156391 wrote:
    Realistically you need a Business Insurance policy once you commence business, not when you commence operations.
    The fact that you contract the work out is irrelevant – as mentioned the contract for the work is between you and the customer. In the event of a claim you may be named as one of the defendants (due to the contract with the customer), otherwise you may be brought into the action with a vicarious liability – your policy will include costs involved in defending the claim.
    Need to look at other policies as well including Statutory Liability (covers for penalties for OH & S Breaches or legislative breaches) and perhaps Workers Compensation (depending on the relationship that you have with your Sub-Contractors). Professional Indemnity may be needed if you have taken on Contractors with a promise of $X worth of work.

    Regards,

    Mark

    Well said, Mark.

    #1137077
    GSanders12
    Member
    • Total posts: 201
    Up
    0
    ::

    Wow, thanks so much for all of the extremely detailed and helpful replies. I definitely learned more then before and will implement this into my start-up :D

Viewing 7 posts - 1 through 7 (of 7 total)
  • You must be logged in to reply to this topic.