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	SERVICE CONTRACT PREPARATION The service contract is the formal, legally binding document that governs the relationship between customer and supplier. It describes in detail the services that the supplier will provide for, and the corresponding cost (price, payment terms) and delivery (quantity range, quality, lead time, procedures, …) conditions. It also defines the overall working of the relationship, its duration, the mechanisms for control, revision, dispute resolution, and the last-resort procedure for anticipated termination. The fundamental point is, the contract must protect both parts, align their interests, and promote in practice, through adequate incentives, a "win-win" kind of relationship. Four key elements for a service contract are: >> definition and quantification for the service levels: they must be measurable and verifiable >> price metric: it must be chosen so that a judicious use of the supplier's resources will be in the customer's interests as well as a prompt response to the requests will be in the supplier's >> measurement points and control structure: the good will of parties cannot be a substitute for a rigorous performance monitoring system >> relationship management structure: formal communication and feedback events (including such details as participants, content, and frequency of the meetings) must be provided for. Another key point of the contract, often forgotten, is the exit strategy to be used in case the relationship proves to be a dead-end. A service contract is a very different "object" from a product purchase contract, and also from a contract for the purchase of "one-off" services. In offshore outsourcing the trend (of Anglo-Saxon derivation) is for extremely detailed and punctual service contracts. This reduces misunderstandings and minimises the chances of having to go through lengthy extra-contractual legal procedures (which in any case do exist also for international contracts) in case things go wrong.
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