A service agreement is an agreement between two persons or businesses where one agrees to provide a specified service to the other. It can also be an express undertaking of employment signed by both the employer and the employee detailing therein the explicit terms and conditions of service.
In the event that you are interested in purchasing a business, or in the alternative, if you own a business and wish to sell it to an interested buyer, this agreement is the most important document that explains in detail the terms of the deal. This type of agreement is important in the following scenarios:
1) If you wish to sell your business and you need to incorporate the terms contractually.
2) When you wish to purchase or sell a business, the agreement enables both the seller and purchaser to settle on the terms of the deal, which will be referenced in the agreement itself. This incorporates all aspects of the deal itself.
3) The agreement sets forth any restrictive clauses, including a covenant not to compete, non- solicitation, confidentiality, and non-disclosure clauses. These guarantees are important to reference in an agreement to ensure that both the seller and purchaser abide by such restrictions.
For example, before entering into an agreement, a third-party vendor may need to complete a transaction for the sale of goods/services as promised between the seller and vendor prior to the seller transferring the business to the purchaser. If the business exchange takes place prior to the transaction with the third-party vendor, such terms and conditions should be put forward in the Agreement.