Monthly Educational Feature: October 1997 {Prepared by John W. Ellis, B.S., M.A.J.}
This month's feature is a short look at a service agreement for private detectives. It is prompted by a request received from a member this month. A service agreement can be developed for you by an attorney or you can develop your own with a little research at the local library.

A good starting point is to examine business or legal references that contain standardized contracts or agreements. A frequent reference is "West's Legal Forms". This source contains two standard agreements which can be used to develop your own service agreement. The first is found in section 4.381. Contract of Employment of Investigator by Law Firm. This contract begins with the usual identification of the parties to the agreement and the date. It then contains paragraphs on the following topics:

• Employment. This paragraph contains the period of duration of the contract and may contain statements pertaining to its continuation beyond that period.
• Duties. This paragraph spells out the duties of the investigator [or the service provided by a private detective]. It may be generally stated or may be very specific.
• Compensation. This paragraph contains the amount and manner of the payments. [For a private detective providing services this may be a flat rate for certain types of services or may be expressed as an hourly rate.] Where a retainer is required, this should be included in this paragraph and the manner or charging against it should be included.
• Expenses. This paragraph details what expenses will be considered reimbursable and what expenses will be considered part of the administrative overhead of the detective business. The paragraph should contain the rates of reimbursement for expenses such as mileage or a statement that indicates that the expenses are based on actual expense, flat rate, etc.
• Termination of Employment. This paragraph contains a statement on how and when the employment [or private detective services] may be terminated. Typically it contains mailing or other notification requirements, time periods for effectiveness, and so forth. It may state conditions under which the agreement terminates as an alternative.
• Signatures. This block contains the signatures of the parties.

Examining this contract is helpful in developing an investigative contract, but it is not directly applicable to a private detective working as an independent contractor. Consequently, examination of contracts that are similar is of assistance. A second agreement found in the same source is that found in section 4.255 Agreement with Accountant. Accountants frequently provide services to a number of businesses or individuals in a manner similar to the independent operations of a private detective. Consequently, this agreement is helpful. The paragraphs in this agreement are:

• Parties to This Agreement. {Similar use as the first contract}
• Services to Be provided. {Similar use as the first contract}
• Payments to Accountant. {Similar use as the first contract}
• When Payments Are Due. {Similar use as the first contract}
• Term of Agreement. {Similar use as the first contract}
• Termination of this Agreement. {Similar use as the first contract}
• Entire Agreement. This paragraph contains a statement that limits supplemental terms such as informal verbal agreements, instructions, business procedures, etc.
• Legal Fees. This paragraph contains a statement allowing a party to the agreement to recover legal fees if court enforcement of the contract becomes necessary. It may also address legal fees in actions that arise from the service such as a civil suit based on wrongful arrest during the service.
• Governing Law. This paragraph contains a statement of which state laws will apply to the agreement. This is very helpful if you service clients in more than one state.
• Independent Contractors. This paragraph recognizes the business relationship between the parties. This is important in view of tax and court rulings which indicate that certain responsibilities may be passed to a contracting party if the subcontractor or independent contractor fails and the difference in reporting taxes for employees versus independent contractors. This area may need detailed clarification.
• Signatures. {Similar use as the first contract}

Obviously, working as an independent private detective or operating as a small agency is different from both of these situations. There are certain additional points which you may wish to address in the contract by inclusion in the various paragraphs or by addition of paragraphs. Here is a short list of the issues for private detectives which you may wish to address:

• Liability insurance arrangements such as provision of disability insurance, legal actions arising out of the service provided, etc. Sorting these responsibilities out in advance of a legal action will be very helpful when the problem arises.
• Responsibility for routine worker safety issues such as OSHA standards, material safety under the worker right to know and so forth should be clarified; don't let it slip between the parties, unaddressed.
• Agent or legal guardianship authority exercised on behalf of the contracting party such as the right to control property [critical if you enforce trespassing on property for them], the right to arrest or detain for a merchant [important for civil liability reasons due to the current case law and the limitations in the unlawful restraint statute], or the right to make emergency decisions for the contracting party [such as arranging medical care while providing personal security, arranging emergency repairs for an absent owner during alarm response, or assuming temporary custody of minors].
• A service warranty of some type. [Keep in mind that not everyone has a good sense of what an investigator can accomplish and what he can't. Explaining what you stand behind and what you don't is a method of smoothing customer service and is one thing that separates the ethical professionals from the rest of the pack.]

The service agreement can be as simple or as complicated as your needs dictate. Various types of agreements may be needed to ‘match' the agreement to the particular service being provided. By making a flexible agreement [one with optional provisions in certain paragraphs] on a word processor, you can quickly eliminate those portions of the agreement that are not needed in a specific agreement. The service agreement is as valuable as you make it; it can enhance your professional image while simultaneously protecting your interests. One can view it as a ‘use it or lose it' situation for your independent business.