When a PSA is Needed
Due to their detailed and time-consuming nature, a professional service agreement is usually used only when an organization is enlisting the services of a professional individual or business with highly technical skills. Normally, the provided services covered in a PSA are intellectual in nature rather than physical. PSAs are drafted for expert services like:
In order to produce a clear and effective PSA, the terms of the agreement must be fully defined, including time limits and a specific description of tasks to be completed. There are cases, however, when PSAs are used for repeated professional services, serving as general “blanket” contracts for a length of time. Needless to say, PSAs should always be put into place before any work begins in order to avoid disagreements and misunderstandings after the fact.
The Proper Information
Creating the right PSA for each individual situation involves a lot of customization, though there are some basic features prevalent across the board. These common aspects include the general purpose of the contract, the associated specific duties, statements of minimum or exact compensation, confirmation that a contracted consultant is not an official employee, intellectual property rights, insurance coverage, and other legal compliance issues.
Legal Support
In order to cover all bases and ensure all details are properly executed, the assistance of an attorney is important when drafting PSAs. Professional attorneys know all pertinent legal terms and are able to add customized documents, like specific non-disclosure agreements. Legal support is also able to properly ensure legal protection for both the hiring organization and the hired party. If an organization decides to draft its own document, at least having an attorney review the PSA is the best way to avoid legal pitfalls or fallout from improperly drafted documents..
PSAs Vs. Subcontracts
PSAs are often confused with subcontracts, as they have many similarities; however, they differ in some important aspects. PSAs generally have more defined time limits for working with consultants, while subcontracts are usually for long-term services integrated into a business's operations, generally creating an involved working relationship. As the contracted party in a PSA is not so heavily involved in the hiring business’ operations, it is less rule-bound and is not required to meet certain internal performance goals. The contractor in a PSA provides external, adjunct support for operations rather than having a permanent and internal relationship with the client’s overall operations..
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