States served: Overview, definition, and example
What is states served?
"States served" refers to the geographic areas, specifically U.S. states, where a company operates, provides services, or sells products. In contracts or agreements, this term is often used to outline the scope of operations, define the regions where services will be delivered, or identify the jurisdictions relevant to the agreement.
Why is states served important?
Identifying the states served is important because it sets clear boundaries for a company’s operations and responsibilities. It ensures that all parties understand where the services or products will be provided and helps establish compliance with local laws, regulations, and tax obligations in those areas.
For businesses, defining states served in agreements minimizes misunderstandings, prevents disputes over service areas, and provides clarity for regulatory compliance and customer expectations.
Understanding states served through an example
Imagine a logistics company entering a service agreement with a retailer. The contract includes a "states served" clause specifying that the logistics company will provide delivery services only in Texas, Oklahoma, and Louisiana. This prevents confusion if the retailer later requests services in other states.
In another example, a SaaS provider includes a "states served" provision in its terms of service, listing the states where its software complies with data privacy laws. This ensures customers in those states can confidently use the software while understanding the provider’s limitations in other jurisdictions.
An example of a states served clause
Here’s how a states served clause might appear in a contract:
“The Service Provider agrees to deliver the Services exclusively within the States of [Insert List of States]. The Service Provider shall comply with all applicable laws and regulations within these jurisdictions. Any requests for Services outside the listed states shall require prior written agreement from both Parties and may result in additional fees or terms.”
Conclusion
The "states served" clause ensures clarity about the geographic scope of a company’s operations, helping businesses manage expectations and maintain compliance with local laws. By defining the states served in contracts, businesses can avoid misunderstandings and disputes, set clear boundaries, and align their services with regulatory requirements. For customers and partners, this clause provides transparency and ensures mutual understanding of the service areas covered.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.