What is an Outsourcing Agreement?

Think of an outsourcing agreement as a contract between a business and a service provider. Its purpose is to provide the terms and conditions of the business relationship between the parties involved, the service provider fees, what type of services will be covered and all other details concerning the exchange between the parties involved. If you're the service provider, then always be prepared to create an agreement between two parties should you ever be hired by a client.

How to Write an Outsourcing Agreement

outsourcing agreement template

1. Identify the Parties Involved in the Agreement

What you will want to start with is information on both the service provider and the client. In your written contract, start with the names and job title positions of the representatives for both parties. Then you will have to place the complete names of the businesses as well as their address and contact details. This is to ensure that the parties involved have a means of communicating with one another and that readers are aware of the identities as well as the roles of each party member.

2. Provide Details on the Service to Be Outsourced

Then, you will have to determine what type of service will be provided to the other party. Will it be data processing? Information management? Provide a clear description as to what will be done. Then you will have to provide the project timeline in which the job is expected to be done. Put in the start and end date of the service when doing so. Lastly, point out what equipment will be used and if it will be the contractor or the client that will be providing them.

3. Include Details on Compensation

Start by pointing out whether the amount of payment is fixed or if it will be based on the amount of work to be done. If you are done figuring that out, be sure to put in the exact figures into the document. Then you will have to point out the date in which the client is expected to make the payment. If the payment schedule is on a weekly or monthly basis, then make it clear as to what day or date that the service provider must receive the money. Lastly, provide the method of payment that the client is meant to use. Provide more options if you want to ensure that the client pays on time.

4. Place a Termination Clause

This is very important as having it ensures that both the service provider and the client are aware as to what circumstances allow the agreement to be terminated or ended. When writing this down, be sure to provide clear descriptions of how either party may legally end the legal agreement should they wish to do so, as well as what actions could lead to the sudden end of the business relationship.

5. Provide a Statement on How Disputes Should be Settled

When both the service provider and the client are in a dispute, the two must reach a conclusion on how they should go about in resolving it. Be sure to create a statement that points out exactly how they should do so. The parties involved should discuss the matter before having it written down in the service agreement document. This will determine whether they will resolve any dispute among themselves or they will leave it up to court.

6. Have the Agreement Signed

Lastly, you will want to create spaces where those involved in the agreement can place their complete names and signatures. This is to confirm that they have agreed to comply with the terms and are willing to fulfill their obligations to one another until the end of the agreement. Should they sign the legal document, be sure to provide the exact date in which they decided to do so.

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