Before signing a service contract: how to define the scope of work and acceptance criteria

“Done” must mean the same thing to both parties

The client may assume that commissioning a design means receiving editable files, while the service provider may think that only print-ready files are to be delivered. Even when both parties intend to complete the work successfully, their understanding of what must be delivered may differ from the very start. Before signing, therefore, you should describe the results you want as a list that can be checked, and then consider it alongside the draft contract.

This article is a framework for preparing information for a consultation on a service contract. It is not a ready-made contract template, nor a ruling on whether any particular wording is enforceable in every case. The type of work, the parties and specific laws may call for different terms, so you should have your adviser review the matter based on the facts and the complete set of documents.

Turn broad requirements into a list of deliverables

Start with the work that your business will actually put to use. Specify the name of each item, the quantity, the format, the delivery channel and any necessary accompanying items, such as manuals or source files. Keep the business goals you want to achieve separate from the work the service provider agrees to deliver, because a phrase such as “help increase sales” does not yet say which deliverables there will be to inspect and accept.

Guidance from the Electronic Transactions Development Agency (ETDA) on preparing terms of reference (TOR) sets out the objectives, scope, deliverables and timeline under separate headings. It can be cited as an example of organizing requirements systematically, although it originates in the context of government projects. Applying the idea to a private business does not mean that the same government regulations or conditions must all be followed.

Write down both what is included and what is not

Check whether the price you have discussed includes travel, installation, training, third-party copyright license fees and support after delivery. Choose only the items that relate to the actual work. If a price for anything is still pending, state that it has not been agreed, rather than leaving the reader to assume that it is already included in the total.

The client should state what it needs to provide, such as source information, a coordinator or access to the premises, together with the date each will be ready. If the service provider will have to wait for information from several departments, make a list of the people responsible so that the lawyer can check how this relates to the delivery deadlines. Looking only at the other party’s obligations may result in terms that cannot work in practice.

Agree on acceptance methods that suit each deliverable

For each deliverable, ask how it will be checked, who will check it and what information or criteria will be used. A hypothetical example for a report would be the sections it must contain, the file format and the period the data covers. Words such as “done properly” or “to our liking” on their own may not be enough for both parties to assess the result in the same way.

Note down the points for the lawyer to check next: how comments will be given when something needs to be corrected, what rounds of revision are included and within what limits, and when the work will be regarded as accepted. Do not add wording yourself saying that silence means the work is accepted, or that once payment is made all rights are lost, because the effect of such wording has to be considered in light of the contract and the relevant laws.

Link milestones to payment and changes

Draw up a milestone table that shows, side by side, what must be delivered at each stage, what will be checked and under what conditions payment becomes due. Check that the dates in the quotation, the annexes and the draft contract are consistent. If time is to run from receipt of information or from the first payment, raise the question of what evidence will be relied on and which start date both parties will use.

Prepare a way of handling requests to add or reduce work, for example by setting out the details, the effect on price and time, and who has authority to approve, before work on the changed part begins. You do not need to write legal provisions yourself to make the document look complete, but you should tell your adviser who usually orders changes in practice and through which channel, so that they can check whether the draft contract supports the process you actually use.

Send your questions for review with the same version of the draft

Before sending anything to the lawyer, put together the latest draft of the contract, the quotation, the annexes and a one-page summary of what the business needs to receive, which terms are acceptable and which points have not yet been agreed. State the version number or date of the documents so that the review of the content and the negotiations work from the same set. If there are provisions on confidential information or rights to use the work, also explain the intended use.

B Law Firm lists on its website a service for drafting and reviewing contracts before they are signed. Preparing a clear list of deliverables and acceptance criteria allows the consultation to go into more detail. Before signing, you should check that the revisions have been reflected in the document that will actually be signed. Conclusions about rights, obligations and risks still require a case-by-case review.

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References

• ETDA: Guidance on writing project proposals and the scope of work, in a government project context (in Thai)
• B Law Firm: Contract drafting and review services