When two organizations decide to join hands and share resources, they need a shared services agreement (SSA). It`s a legal document that outlines the terms and conditions that the parties agree to while sharing services. This kind of agreement allows both parties to reduce costs while still benefiting from the expertise of the other.
A shared services agreement is a complex document that can be customized to suit the needs of each organization. However, there are some standard provisions that most SSAs have. Here is an example of a shared services agreement:
1. Definitions: This section defines the key terms used throughout the agreement, such as “service provider” and “service recipient.”
2. Scope of Services: This section details the services provided by the service provider. It should clearly state the scope of services, including the terms and conditions of the services to be provided.
3. Fees and Payments: This section outlines how the service recipient will pay for the services provided by the service provider. It includes the payment terms, the billing cycle, and any penalties for late payments.
4. Term and Termination: This section outlines how long the agreement will last, how either party can terminate the agreement, and any notice requirements.
5. Confidentiality: This section outlines how the parties will protect confidential information that they may obtain during the course of the agreement.
6. Intellectual Property: This section outlines who owns any intellectual property that is created during the course of the agreement and how it may be used.
7. Liability and Indemnification: This section outlines who is responsible for any damages or losses that may arise from the shared services agreement and how the parties will indemnify each other.
8. Dispute Resolution: This section outlines how disputes will be resolved, including the use of mediation, arbitration, or litigation.
9. Governing Law: This section outlines which state`s law will govern the agreement.
In conclusion, a shared services agreement is a critical document that outlines the terms and conditions of shared services between organizations. It`s essential to have a clear and comprehensive agreement to prevent any misunderstandings, disputes, or losses. Understanding the basic structure of a shared services agreement can help you draft one that suits your organization`s specific needs.
