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A board of directors agreement is an agreement that outlines the roles and responsibilities of the members of the board of directors of a company and secures membership of a new board member. The agreement isn't a legal document, but it does assert a new member's commitment to the organization.
It is vital for a business to have a Director's service agreement in place to protect the business. Restrictive covenants can be included in the agreement to restrict the former Director's actions after they leave the business.
A board of directors agreement is an agreement that outlines the roles and responsibilities of the members of the board of directors of a company and secures membership of a new board member. The agreement isn't a legal document, but it does assert a new member's commitment to the organization.
A Director's service agreement is a contract that sets out the terms that a company director works under. Directors are key people within a company and it is essential to make sure their contracts are clear about their rights and responsibilities.
A Directors' Service Contract or 'DSC' is fundamentally an employment contract which covers standard clauses related to such employee rights and entitlements, but also includes further provisions covering matters specific to the role of the director.
When you, as the service provider, perform a specific service for a customer and want to protect your interests while making sure you will receive compensation, you should use a service agreement. If you are a customer, you should use a service agreement when you hire a provider to handle a paid task.
Both parties have to exchange something, such as money exchanged for a service. If just one party provides consideration, the agreement is a gift rather than a contract.
A director is thus not an employee of a company, although he or she can be an employee in addition to holding the independent office as a director. See The Law of South Africa (First Reissue (1996)) Volume 4 Part 2 at para 52; Anderson v James Sutherland (Peterhead) Ltd 1941 SC 203 at 217.
There are small differences between a contract and a service agreement. Essentially, a contract follows a more formal outline than an agreement. An agreement can include any understanding between multiple parties about what they promise to do for each other.
While verbal agreements may be enforceable, it is best to have Service Agreements in writing. Creating a contract gives you the opportunity to outline expectations on both sides of the agreement.