As a business owner, it`s important to protect yourself and your company by creating a services agreement. This agreement outlines the services that your business will provide to your clients, as well as the expectations and responsibilities of both parties. However, it`s important to note that not all services agreements are created equal. In fact, some agreements may contain clauses that are unnecessary or even harmful to your business. One such clause is the gratuitous services agreement.
What is a gratuitous services agreement?
A gratuitous services agreement is a clause within a services agreement that states that the business will provide certain services to the client for free. These services may be minor or major, and can include anything from providing additional consulting to performing extra work that was not originally agreed upon. Essentially, a gratuitous services agreement allows the client to receive additional work without paying for it.
Why is a gratuitous services agreement harmful?
While it may seem like a good idea to offer free services to your clients, a gratuitous services agreement can actually be harmful to your business in several ways. First and foremost, providing free work devalues your services and can make it difficult to charge fair prices for your services in the future. Additionally, gratuitous services can take up valuable time and resources that could be better spent on paid work. Finally, if you do not clearly define which services are included in the agreement, your clients may take advantage of the situation and request additional free work, leading to a loss of revenue and damaged relationships.
How to avoid a gratuitous services agreement
The best way to avoid a gratuitous services agreement is to clearly define the services that your business will provide to your clients. Your services agreement should outline the specific services that your business will provide, as well as the fees that the client will be expected to pay. If you want to offer additional services, you can include them in the agreement as optional add-ons that the client can choose to pay for. This not only protects your business from gratuitous services, but also allows you to upsell your services to clients who may be interested in additional work.
In conclusion, a gratuitous services agreement may seem like a good way to appease your clients and provide additional services, but it can actually be harmful to your business. By clearly outlining your services and fees in your services agreement, you can avoid this pitfall and protect your business from unnecessary work and lost revenue.