Service Purchase Contract: Its Nature and Legal Basis for Construction Contracts and Employment Contracts

Abstract

The need for service purchase contracts has increased due to the demands of practical realities and the growing necessity driven by governments, institutions, and individuals to provide the best services to citizens, organizations, and service providers. Employers also require such contracts to attract experienced and highly qualified persons. Service procurement contracts meet the needs of both parties involved: those seeking services and expertise and those possessing skills and qualifications. Both parties desire to avoid being subject to labour laws and associated obligations and duties. The desire of both parties in this relationship is best met through what is known as a service procurement contract, which is considered a form of contracting and subcontracting.

This has led service procurement contracts to become prevalent and widely used in contemporary work environments, particularly among employers who require specific expertise for certain periods without the legal obligations associated with traditional employment contracts. Employers choose service procurement contracts to avoid obligations such as minimum wage requirements. This distinction from traditional employment contracts makes service procurement contracts an attractive option for many employers, contributing significantly to the modern workforce dynamics.

Such contracts differ theoretically and in terms of the rights and obligations arising from each, leading to important legal consequences and effects that ultimately fulfil the desires of both parties of the relationship.