Service Agreement or Terms & Conditions: What Should You Use For Your Business? (2025 Updated)

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When you’re running a business in 2025, having a robust contract with your customers is more essential than ever. There are many types of customer contracts out there – whether it’s Client Agreements, Consulting Agreements, Service Agreements or Business Terms & Conditions – and they all serve the same core purpose: to clearly define the rights and obligations of both parties. For a deeper dive into how contracts work, read our piece on what makes a contract legally binding.

The truth is, there’s little difference between these customer contracts at their core. They all form a legal agreement between your business and your customers. In this article, we’ll take a closer look at Service Agreements, updated for the current legal landscape in 2025.

What’s the Difference Between Service Agreements And Terms & Conditions?

Service Agreements are essentially the same as Business Terms & Conditions – they outline the terms by which customers engage with your services. Whether you label your document as a Service Agreement or simply T&Cs, its role is to set out the particulars of the service, including payment terms, limitations, warranties, and other obligations. The title matters less than ensuring that the document is comprehensive and tailored to your business needs.

When Do I Need A Service Agreement?

If you’re operating a business that provides services to customers, it’s always a smart move to have a Service Agreement in place. This document clarifies the roles and responsibilities of both your business and your customer, helping to minimise misunderstandings and reduce the likelihood of disputes. Moreover, it can limit your liability, secure your revenue streams and offer other important protections – all of which are crucial in today’s competitive market.

How Do I Use It?

Service Agreements are often drafted as a formal contract that both parties sign. In our digital age, however, many businesses utilise electronic signatures – which are legally binding in Australia. For more insight on this, check out our article on Why Should I Use E-Signatures?.

Alternatively, it is common to integrate your Service Agreement into invoices, quotations or proposals. These are crafted so that by placing an order or making a payment, the customer is deemed to have accepted your terms. This method simplifies the process while maintaining full legal effect.

Rather than including a signing block, many Service Agreements contain a clause such as: “By ordering, accepting or paying for any services after receiving or becoming aware of these terms, you will be deemed to have accepted them.” This approach is fully valid – as further explained in our guide on what makes a contract legally binding.

Service Agreement Example

Alli runs a web design business. Before building a website for a new customer, Alli prepares a detailed proposal outlining the project scope, timeline and pricing. The proposal includes a Service Agreement that specifies how payments are to be made, what occurs in the event of a delay, ownership of intellectual property (a crucial point – don’t forget to check out our advice on protecting your intellectual property with a trade mark), limitations and disclaimers regarding the service provided, and the process for terminating the agreement. The document clearly states that by paying for the proposal, the client is deemed to have accepted Alli’s standard terms. This approach ensures that if any dispute arises regarding service scope or quality, Alli can refer back to this well-documented agreement.

What’s In A Service Agreement?

Here are the sorts of issues that are typically covered in a Service Agreement:

Business Obligations – What is the scope of the services to be provided? Are there limitations or provisions for changes?
Customer Obligations – What must the customer provide or do in order for the services to be delivered, and what are the consequences if they fail to do so?
Payment – When is payment expected, what are the payment methods, and are there any penalties for late payment?
Intellectual Property – Who retains ownership of any work products or intellectual property created for the customer?
Liability – To what extent will your business be liable if something goes wrong or if a customer suffers a loss as a result of the services?
Termination – How can either party terminate the agreement, and what happens to outstanding fees and partially completed work?
Dispute Resolution – What process should be followed if a dispute arises (for example, mediation before litigation)?

Keeping Your Contract Up-to-Date in 2025

As we progress through 2025, it’s important to regularly review and update your Service Agreement to reflect the latest legal requirements and business practices. With evolving consumer rights, digital transaction methods and data privacy standards, your contract should address new industry norms such as integrated payment systems and enhanced data protection clauses. For further insights on staying compliant, you might find our guides on intellectual property and business regulations very useful.

Need Help With A Service Agreement?

Drafting a comprehensive Service Agreement can seem daunting, especially when you’re unsure which clauses should be included or how to properly word the terms. Investing in legal advice now can save you from future disputes and headaches by ensuring your agreement meets all current legal standards in 2025. For more detailed insights on creating effective agreements, check out our article on What is a Contract?.

At Sprintlaw, our team of experienced lawyers is ready to assist with your Service Agreement and any other legal documents your business may need. Whether you’re revising an old agreement or drafting a new one, we’re here to help you safeguard your business. For a full rundown of our offerings, please visit our All Services page or get in touch for a no-obligation consultation.

Minna Boyle

Minna is the Head of People & Culture at Sprintlaw. After completing a law degree and working in a top-tier firm, Minna moved to NewLaw and now manages the people operations across Sprintlaw.