Description
- A Service Agreement is a legally binding contract between a service provider and a client that outlines the terms and conditions for providing specific services. It ensures clarity on deliverables, timelines, payment terms, and other obligations, protecting the interests of both parties.
GOV Department
- Service Agreements may require compliance with regulations set by relevant government agencies, such as the Ministry of Domestic Trade and Consumer Affairs (Kementerian Perdagangan Dalam Negeri dan Hal Ehwal Pengguna – KPDN) or the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia – SSM), depending on the nature of services. This ensures that the agreement aligns with legal and regulatory standards, supporting transparent and lawful business practices.
License Name (Malay)
- Perjanjian Perkhidmatan
Details
- Clearly defines the scope of services, timelines, and deliverables.
- Includes payment terms, such as fees, billing cycles, and penalties for late payment.
- Outlines the responsibilities and rights of both the service provider and the client.
- Includes clauses for confidentiality, dispute resolution, and termination of the agreement.
- Ensures compliance with the Contracts Act 1950 and other relevant regulations.
Important Rules
- The agreement must be signed by both parties to be enforceable.
- The scope of services and deliverables must be explicitly detailed to prevent disputes.
- Payment terms must comply with applicable financial and taxation regulations.
- Confidentiality clauses must protect sensitive information shared during the service period.
- Any amendments to the agreement must be agreed upon by both parties and documented.
Compound & Punishment
- Breach of the Service Agreement may result in:
- Legal action for damages or compensation by the aggrieved party.
- Termination of the agreement and potential reputational damage.
- Failure to comply with regulatory requirements may lead to fines or penalties under applicable laws, such as the Personal Data Protection Act (PDPA) 2010 for confidentiality breaches.
Advisor
Penny Lim , Legal Consulting
Ms. Penny is responsible for identifying possible legal issues and implementing solutions in the areas of government regulation, customer protection, and fair employment. Legal Counsel. Ms. Penny can advise on legal issues such as government and business permits, review legal documents before signing them, and complete legal research as needed by the company
Commonly Asked Questions
A Service Agreement is a legally binding contract between a service provider and a client that defines the scope of services, payment terms, timelines, and other responsibilities to ensure mutual understanding and protection.
It helps prevent disputes by clearly outlining each party’s duties, deliverables, and payment obligations — ensuring fairness, accountability, and legal protection for both sides.
Any individuals or businesses providing or receiving services — such as consultants, contractors, designers, or maintenance providers — should use a Service Agreement to formalize their arrangement.
Key elements include scope of work, service timelines, payment terms, confidentiality clauses, dispute resolution methods, and termination conditions.
Yes. Once signed, it is enforceable under the Contracts Act 1950 and related laws, provided all terms are lawful, agreed upon, and clearly defined.
Yes, but any amendments must be made in writing and signed by both parties to remain valid and enforceable.
The non-breaching party may take legal action for damages, terminate the contract, or seek compensation as stipulated in the agreement or under Malaysian law.
While registration is not required, stamping the agreement at Lembaga Hasil Dalam Negeri (LHDN) is recommended to make it legally admissible in court.
The Contracts Act 1950 is the primary legislation, along with other relevant laws such as the Personal Data Protection Act (PDPA) 2010 and consumer protection regulations depending on the nature of the service.
Yes. Many Service Agreements include confidentiality and non-compete clauses to protect sensitive business information and prevent unfair competition after the service ends.