Contract Scope Definition: Everything You Need to Know
It refers to the expected services or work as agreed to in a contract. It's best for scopes to be as specific as possible to prevent confusion.3 min read
The contract scope definition refers to the expected services or work as agreed to in a contract. It's best for scopes to be as specific as possible to prevent confusion.
Defining the Scope of Services in an Agreement
With a clearly defined scope, the purchaser knows exactly what he or she is paying for, and the service provider can feel comfortable in knowing he or she doesn't have to work beyond what the scope details without extra pay.
Scope is specific to an industry and the type of services provided. The more details shared in a scope, the more confident both parties will be about the agreement.
For example, in software design, you might want to specify the following:
- The type of functionality the software will have
- Which platforms the software will work on
- The available screens
As another example, a construction project's scope would look completely different. Many times, a contract's scope of services clause includes the following outside documents to give the clearest definition of what the work entails:
- More documents
When it comes to payment, contracts should clearly state the amount charged for provided services. They also need clauses that details the following:
- When payments are due
- When parties should expect invoices
- Whether compensation involves flat-fee payments with no extra expenses
Contracts always need durations, which should be easily renewable for ongoing agreements.
Service providers often use work products like proposals, mockups, wire frames, drafts, and other parts that may go into final products. You might want to provide details on the work product.
The contract should make sure that your company's materials stay with you and that service providers can't use the materials for their own purposes. This may include a statement that you're buying all rights and intellectual property (IP) to work that the service provider gives you.
It's not uncommon for a defined scope to change once you get into a project, so cover how order changes will be handled. By setting clear expectations up front, parties are generally more agreeable if complicated or costly changes become necessary.
How to Write Scope of Work
An agreement's Scope of Work (SOW) area is where you describe the work to be performed. In many SOWs, there's not enough specificity, so the parties may wind up disagreeing over the delivered product. In reviewing the SOW, there's often no support for one interpretation over the other. Avoid this problem by limiting ambiguity as much as possible.
Include the following in an SOW:
- Problem statement
- Agreement goals
The glossary should spell out all acronyms in the SOW. Include definitions of unusual terms. Look at the document from the perspective of a person who's not familiar with that particular industry or discipline when writing the glossary.
In one or two paragraphs, outline the problem that this research will address. Describe the technological and scientific baseline — that is, the field's developmental or current state-of-the-art status.
Start this section by briefly describing the goals and how you plan to meet them. Goals can be social, technical, or economic. Two to three sentences will suffice.
Describe the project's objectives, which are any measurable or knowable things expected at the end of the agreement. List deliverables here, which are made up of tasks and end products. You may have many deliverables, but break down each into tasks and end products to adequately specify what's expected.
“Soft” deliverables — such as calls, meetings, or conferences — are outlined here. This is where you'll describe requirements that aren't end products of a certain task but are required of the performing party.
Specify all of a project's dates here. This includes dates for tasks and deliverables. It also covers dates in the administration portion.
The more detailed a scope, the likelier that both sides will be satisfied with the end result. If you're not sure how to make your scope as specific as it needs to be, consult with someone who's skilled in drafting contracts. Putting in the effort beforehand can make the process run more smoothly.
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