What a Service Agreement Is and Why Precision Matters
A service agreement is one of the most common instruments of everyday legal practice — it covers consultations, technical services, marketing, education and many other relationships. The service on this page rests on the relevant norms of the Civil Code — freedom of contract, the mandate contract, the reimbursement of expenses and the termination of the contract. A correctly drafted text arranges payments, deadlines and responsibilities in advance, so we record every clause in a way that stays within the framework permitted by law and works even in the event of a dispute.
Freedom of Contract and Its Limits
The relevant norm of the Civil Code states that subjects of private law may, within the limits of the law, freely conclude contracts and determine their content. They may also conclude contracts that are not provided for by law but do not contradict it. This means that a service agreement can be tailored to the specifics of your business rather than forced into a standard template.
At the same time, this freedom has limits. Where the validity of a contract, for the protection of essential interests of society or of a person, depends on a state permit, this must be regulated by a separate law. Moreover, where one party to a contract occupies a dominant position on the market, it bears, in that sphere of activity, the obligation to conclude contracts and may not without justification offer unequal terms to its counterparty. Consumers of services are also protected: persons who acquire or use property and services for non entrepreneurial purposes or to satisfy vital needs may not be unreasonably refused the conclusion of a contract, where the other party acts within the framework of its entrepreneurial activity.
The Mandate Contract as a Legal Form of Services
One widespread form of providing services is the mandate contract. Under its definition, the mandatary is obliged to perform one or several entrusted acts in the name and at the expense of the mandator. This construction is convenient where the service provider acts in the name of the client — for example in representation, intermediation or certain administrative activities.
With regard to expenses, the law obliges the mandator to reimburse the mandatary for the necessary expenses incurred in performing the entrusted act; however, no claim exists where the expenses are to be covered by the remuneration. The mandatary may also demand an advance from the mandator for the expenses that must be reimbursed. In the agreements we draft, these rules are directly linked to the price, advance and expense clauses, so that every element of payment is sensibly defined.
Termination and Its Consequences
A sensitive point of any service agreement is termination. Under the law, the parties to a mandate contract may terminate it at any time, and an agreement to waive this right is void. This is a statutory limit that cannot be overcome by the text of the contract — which is why it matters that the terms be arranged so that the consequences are acceptable to both parties.
The consequences are also defined by law: if the mandatary terminated the contract at a time when the mandator was deprived of the possibility to secure his interests otherwise, the mandatary must compensate the damage caused by the termination, except where it had an important ground for doing so. If the contract is terminated by the mandator, that party must reimburse the mandatary for all necessary expenses incurred in performing the entrusted act and, where the contract was for remuneration, pay remuneration proportionate to the work performed. We arrange these risks in the contract in advance, so that in the event of termination each party knows its own rights.
Frequently Asked Questions
May the parties define the terms of the contract freely?
Yes. Within the limits of the law the parties freely determine the content of the contract and may conclude a contract differing from those provided for by law, provided it does not contradict the law.
Can the right of termination be excluded by contract?
No. The parties to a mandate contract may terminate it at any time, and an agreement to waive this right is void. Only the consequences of termination can be regulated in detail.
Who reimburses the expenses connected with the service?
The mandator must reimburse the mandatary for the necessary expenses incurred for the entrusted act, unless they are to be covered by the remuneration; the mandatary may also demand an advance.
What happens if the client terminates the contract?
The mandator must reimburse all necessary expenses incurred by the mandatary and, where the contract was for remuneration, pay remuneration proportionate to the work performed.
How We Help on Legal.ge
The Legal.ge team drafts and reviews service agreements in every direction: we describe the subject of the services, arrange the price and the reimbursement of expenses, regulate the consequences of termination and check the clauses from a consumer protection perspective. Contact us — we will prepare an agreement that places your relationship in a clear and reliable legal framework.