Misunderstandings can lead to litigation and prosecutions are costly. A service contract reduces the risk of misunderstanding and thus the potential for processes. Here are some recommended steps to create a clean service contract: Written service agreements are generally more necessary when contractual terms become more complex or need to be clarified. A service agreement is particularly important because services are more difficult to prove than a product. When a company buys a product, there is a physical object that can display it. This is not always the case when a company buys a service. A service contract ensures that everyone understands what is delivered and when.