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Term Service Contract for Malaysia

Term Service Contract Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that establishes and regulates an ongoing service relationship between a service provider and client. The document details the scope of services, duration, payment terms, performance standards, and obligations of both parties while ensuring compliance with Malaysian regulations including the Contracts Act 1950 and relevant sector-specific legislation. This agreement is structured to provide clear guidelines for service delivery, quality standards, and dispute resolution while protecting both parties' interests in accordance with Malaysian legal requirements.

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What is a Term Service Contract?

The Term Service Contract serves as a fundamental legal instrument in Malaysian business operations, designed to establish and govern ongoing service relationships between service providers and their clients. This document is essential when parties require a structured framework for continuous service provision over a defined period, typically used in scenarios ranging from professional services to facilities management. The agreement, governed by Malaysian law including the Contracts Act 1950 and relevant industry regulations, comprehensively addresses service scope, performance standards, payment terms, and risk allocation. It's particularly valuable for businesses seeking to establish clear, enforceable service parameters while ensuring compliance with Malaysian legal requirements and industry standards.

What sections should be included in a Term Service Contract?

1. Parties: Identification and details of the service provider and service recipient, including registration numbers and registered addresses

2. Background: Context of the agreement and brief description of the parties' intentions

3. Definitions: Definitions of key terms used throughout the agreement

4. Scope of Services: Detailed description of services to be provided, including specific deliverables and service standards

5. Term and Renewal: Duration of the agreement, commencement date, and renewal provisions

6. Fees and Payment: Service fees, payment terms, invoicing procedures, and late payment consequences

7. Service Provider's Obligations: Key responsibilities and commitments of the service provider

8. Client's Obligations: Key responsibilities and commitments of the client

9. Service Levels: Performance standards, metrics, and measurement methods

10. Intellectual Property Rights: Ownership and usage rights of pre-existing and created IP

11. Confidentiality: Protection and handling of confidential information

12. Data Protection: Compliance with PDPA 2010 and data handling requirements

13. Liability and Indemnification: Limitation of liability and indemnification obligations

14. Termination: Grounds for termination, notice requirements, and consequences

15. General Provisions: Standard boilerplate clauses including notices, governing law, etc.

What sections are optional to include in a Term Service Contract?

1. Insurance: Insurance requirements when services involve significant risks or regulatory requirements

2. Force Majeure: Provisions for unforeseen circumstances, particularly relevant for long-term or critical services

3. Change Control: Procedures for managing changes to services or terms, important for complex or evolving services

4. Audit Rights: Client's right to audit service provider's performance, needed for regulated industries or critical services

5. Non-Competition: Restrictions on competitive activities, relevant when service provider has access to sensitive information

6. Security Requirements: Specific security protocols and requirements, necessary for services involving sensitive data or systems

7. Transition Services: Provisions for service transition at contract end, important for complex or critical services

8. Personnel Requirements: Specific requirements for service provider's personnel, relevant for on-site or specialized services

What schedules should be included in a Term Service Contract?

1. Schedule 1 - Service Description: Detailed specification of services, including technical requirements and performance standards

2. Schedule 2 - Service Levels and KPIs: Detailed service level agreements, performance metrics, and measurement methodologies

3. Schedule 3 - Fee Schedule: Detailed breakdown of fees, pricing structure, and payment milestones

4. Schedule 4 - Implementation Plan: Timeline and milestones for service implementation or transition

5. Schedule 5 - Contact Details and Escalation Matrix: Key personnel contact information and problem escalation procedures

6. Appendix A - Required Reports: Format and frequency of required service performance reports

7. Appendix B - Security Protocols: Detailed security requirements and procedures

8. Appendix C - Compliance Requirements: Specific regulatory or industry compliance requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Malaysia

Publisher

Genie AI

Cost

Free to use

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