The time you spend creating, discussing, and signing a service contract is much smaller than you would spend clearing up a misunderstanding with a contractor. Remember that a service contract is not a link. A loan holds only one person in the contract, while a service contract holds both parties to account. In this way, both parties are protected and not just one. The Service Provider represents, warrants and undertakes to have the personnel, facilities and resources necessary for the performance of the services provided for in this Agreement and that it will provide the services provided for in this Agreement in a timely and efficient manner. The service provider declares, guarantees and undertakes to have the administrative, commercial and technical experience and expertise necessary to provide these services in a competent and professional manner. Some services, such as marketing or advertising, are subjective. For example, a marketing agency may provide its services without your business seeing any returns. Here, a service contract can be useful. It ensures that the marketing agency and your business know what the end result will be and the costs to get there.

As a service contract describes the peculiarities of payment, it also helps to avoid surprise fees. If you sign the agreement, you need to know exactly how much the service is going to cost you. A service contract can also be a warranty feature offered with a product. This type of service contract means that the manufacturer of the product agrees to repair or replace the product if it breaks or is defective within a given period of time A service contract is required each time a contractor sells its services or when a company purchases a service from another company.