Ten Tips for Drafting Service Descriptions and Requirements

In outsourcing and other commercial services deals, clients often have difficulty preparing the service descriptions and requirements (specifications) to be included in the services agreement (often in schedules or statements of work).  This usually results in delays and increased legal costs since we, the lawyers, need to be more involved in the initial drafting process than necessary.  We end up spending a lot of time working with client subject matter experts to ensure the service descriptions and requirements are complete, accurate and work from a contractual perspective.

Here are my top 10 drafting tips to help avoid this problem:

  1. Involve the right subject matter experts. Service descriptions and, in particular, specifications are often technical in nature. If you do not involve the right subject matter experts, you may inadvertently describe the services incorrectly.
  2. Avoid standard forms. If you are the customer, do not rely on the vendor to tell you what services you want. A vendor’s standard form service descriptions often include a lot of marketing puff and lack contractually enforceable obligations.
  3. Be clear, precise and accurate. The service descriptions and requirements define exactly what the customer is buying from the vendor. If the service descriptions are incomplete or vague, then the customer may not receive what it believes it is paying for. Be clear, precise and accurate so as not to invite interpretation. Clarity, in drafting is improved by using an active voice rather than a passive voice (e.g., “vendor will deliver X to the customer,” instead of “X will be delivered by vendor to the customer.”) Ask yourself if an independent third party who is not an expert in the applicable subject matter field (e.g., a judge) would understand the true intent of what is written.
  4. Keep it brief and simple. Avoid extraneous words, phrases and other content. Brevity helps the reader and improves the effectiveness of the communication. Often complex concepts can be simplified by using lists, charts, examples and formulas. Do not just cut and paste content (e.g., service descriptions) from other documents (e.g., vendor marketing materials) without asking yourself whether the content serves a contractual purpose.
  5. Make sure it fits. All of the various pieces of the agreement need to fit together. If you draft in a vacuum without being aware of the other relevant components of the agreement (e.g., defined terms, interpretation provisions), you are likely to waste a lot time drafting language that is repetitive or even worse inconsistent or conflicting with other portions of the agreement. Also, spend the time necessary to tailor content pulled from other documents so that it aligns with the rest of the agreement.
  6. Keep phraseology consistent and avoid repetition. If you say the same thing twice in different ways, then the contract could be interpreted as if different meanings were intended. The use of defined terms and consistent phraseology can help reduce this risk.
  7. Avoid terms of art. Avoid technical terms and terminology. Do not assume their meaning is obvious. It is best to create definitions for technical terms used in the agreement to ensure all of the parties agree what they mean.
  8. Group the services logically. In additional to improving readability, grouping services into discrete categories or “towers” will make it easier to reduce the scope of services or replace services later if desired.
  9. Allow for technology improvements. Technology is continually evolving so it is important to ensure the specifications are drafted in way that work for the entire term of the agreement, not just the current state, and do not unintentionally commit the parties to technologies that will change. One way to avoid this problem is to focus on defining outcomes rather than describing “how.”
  10. Avoid responsibility matrices. If you are the customer, it is particularly important to know where to draw the line between your responsibilities and the vendor’s responsibilities. Otherwise, if a performance problem arises, there will be a lot of finger pointing and it may be difficult to hold the vendor accountable. In my experience, it is best to avoid vague responsibility matrices (e.g., RACI matrices) and instead draft customer obligations as precise dependencies upon which the vendor is reliant for providing the services.  If the customer fails to perform its dependencies, the remedy for the vendor is relief from its obligations rather than a claim of contractual breach.

agreements contracts Drafting outsourcing Procurement RACI matrix requirements service descriptions specifications tips

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