Defining Service and Non-Service Exchanges

Clear-cut classification of exchanges into services and non-services is vital for governments to estimate contributions of service and other sectors to national incomes, for businesses to know their tax and tortious liabilities and for researchers to develop new theories and concepts of services. Unfortunately, the definitions and schema they use to classify exchanges have serious shortcomings. This paper proposes a legal approach to classify exchanges. Whereas existing definitions and schema are concerned with trading of acts or goods, the proposed approach is concerned with trading of legal rights and obligations. The time taken by contracting parties to fulfill their contractual obligations has been used to define service and non-service exchanges. The proposed definitions are unambiguous and they overcome the shortcomings of two most-cited definitions of services. [<i>Service Science</i>, ISSN 2164-3962 (print), ISSN 2164-3970 (online), was published by Services Science Global (SSG) from 2009 to 2011 as issues under ISBN 978-1-4276-2090-3.]