Traditional Service Agreement


Mark, a senior partner at M-A Partners, has more than 25 years of professional experience in the areas of corporate strategy, MA and customer service management at a telecommunications strategy consulting firm. He led due diligence, integration planning before and after the acquisition and multi-country integrations for more than 20 deals with a total value of more than $5 billion. Marks` industry expertise includes: business development, telecommunications, strategy consulting and accounting/audit services. Service levels must be defined in the TSA or in the daton documentation with the correct detail so that the parties can understand exactly how the requested services should be provided, without giving contractual “outs” to the seller. Avoid a failure of “reasonable,” “commercially reasonable,” “best business effort” and similar performance standards that could allow the seller to technically work in compliance with the TSA without effectively providing the requested services in a manner that gives the buyer the benefit of his or her bargain. Parties to an ASD must understand whether there is identifiable personal information related to the health insurance system and the liability law, or other sensitive or confidential information used in the services provided. In this case, you should consider appropriate security measures for the buyer and seller, as well as for their respective employees and contractors. Responsibility – As with all commercial contracts, the issue of liability in ASD is often a sensitive one. Historically, when short-term transition contracts have been entered into with limited value services, liability has often not been strongly negotiated.

However, as the services provided have become more complex and valuable and the duration of agreements has lengthened, there has been an increasing emphasis on accountability, with buyers seeking to negotiate liability caps similar to those of their other service agreements. Extended, standard and duration – the extent of the services itself is the absolute key to success in an ASD agreement, but often difficult for the parties to determine. In the case of transactions in which the divested entity and the maintained group are highly integrated and interdependent, it may be difficult for the parties (particularly the buyer) to identify the services to be provided and describe them appropriately. As a result, the purchaser will often attempt to include a draft that deals with “missed services” (i.e. services that were not identifiable at the time of the start of the ASD). At a dinner at a recent customer engagement, the Vice President of Business Development looked at the table and asked, as if he were whispering an action board: “What is the fastest thing you`ve ever developed, a transitional agreement (TSA)?” It was neither an exchange advice nor a joke. He was gravely dead, and frankly, he was caught between the proverbial rock and a difficult place. Its market was stalled for weeks, while it imposed very complex terms of agreement.

When the breakthrough came, they got caught with flat feet. The only thing worse than not having a TSA concluded and agreed upon is to try to negotiate one after closing! So we got to work. This is the story of how we developed the “Two-Day TSA.” However, there are a number of liability issues that are specific to the TSA situation. First, the seller is not a professional service provider and is therefore unlikely to accept a liability commitment corresponding to the level of responsibility expected by these professionals.