Overview of a Supply of Services Contract

What is a Supply of Services Contract?

A Supply of Services Contract is a short-form contract between a service provider and a customer for the provision of services.

A Supply of Services Contract sets out simple terms governing the services to be provided, the contract period, the purchase price, the payment terms, and which party will own intellectual property rights in the works created.

A Supply of Services Contract is meant for simple, straightforward transactions. For more detailed and elaborate terms, use a Supply of Services Agreement.

What is included in a supply of services contract?

This contract is basically done between a business and an external supplier for the purpose of delivering services mentioned while creating a contract. The important things to include in this contract are:

Price Details: a contract can be done for a small or larger-time frame. Supply of services contract done for a longer period of time includes both risk and opportunities for the supplier. There might be chances that the price would go down or up so it is very crucial to decide and fix the price details while drafting a supply of services contract. If the contract is for a long period of time then both parties can agree to adjust the price varies according to the various external factors like inflation, third party cost, etc.

Length of the contract period: Normally the length of the contract period varies according to the nature of services offered. It might be a long-term contract as well as short term.

Service charges and payment terms: service charges can be decided by both parties and can be structured in different ways. It can be either on a fixed price basis, time and material cost basis, or a combination of both. Normally a hybrid plan can be useful for both supplier and business to pay the cost according to the market situation.

Responsibilities of the service provider: It also includes the responsibilities of the service provider for delivering the services. This basically includes a clear and accurate description of the services offered.

Termination: termination arrangement and provision should be clearly discussed while creating a supply of services contract. This will help both parties to terminate the contract legally if they are not satisfied with the service offered. Normally a notice period is decided by both parties before terminating the contract.

Ownership of intellectual property rights in the works created: while drafting a supply of services contract it is very important to consider ownership of intellectual property rights created while delivering the services. The perspective of both parties towards ownership of intellectual property rights helps to settle down the disputes if arise in the future and also safeguards the legal rights of both parties towards the ownership.


Businesses need a supply of services contracts to manage their services with third parties. This will help both parties to know better about the terms and conditions of the services being offered and also provides a measure to settle down disputes if arise in the future.

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