A terms and conditions contract will identify the rights and obligations of both parties involved. A general condition is common in most contracts, however you’ll also sometimes see special conditions that are specific to the contract, such as payment terms and penalties.
Remember that when someone refers to the terms and conditions, they’re not referring to the entire contract. While having terms and conditions in your contract isn’t legally required, it’s still important that you include them for added legal protection for yourself and your client should something go awry.
Having terms and conditions will give you the right to terminate the contract if either party does not adhere to the terms dictated. You’ll want to include a termination clause to ensure that this is possible.
This section describes your billing terms and conditions, late fee policy, and the processes you’ll utilize for declined cards and bounced checks. You should also specify here how you expect the payment to be received, whether that payment is flat, ongoing, or periodic, and how non payment issues (such as liens) will be handled.
In your service modifications section, you’ll want to go over how you’ll handle any changes that need to be made to the agreement. This is important to include because the customer may want to add or remove certain services, or because of circumstances beyond either parties’ control.
Be sure to take your time on this section, as it may be your saving grace. This section should include circumstances that will terminate the contract like service provider not meeting deadlines. If they paid up front, you should discuss how much money (if any) they will get back should the contract be terminated.
A common issue with service agreements is that they don’t adequately address liability – if the client suffers loss as a result of the services provided by the provider, who bears the cost? You should also include provisions regarding indemnities, limitation of liability and insurance.
Be sure to include lines for the date and signature(s). You may want to consider going digital when it comes to signatures, as this can make things more convenient and save you time by taking signatures from phone or sending signature request through email
While it may sound counterintuitive, electronic signatures can offer a higher level of security. Electronically signed documents store exact times and dates of signing, the type of device, and more. There’s also less of a chance of the contract being lost or misplaced.
When signing a service contract that’s worth more than $10,000 be sure to have a notary present.
If you choose to offer warranties, be sure that you go over them with the client present because odds are, they won’t read them once the service is complete. This is great for setting expectations in advance, and will help you avoid future conflicts that could arise, like normal wear and tear issues or damage from improper use.
Before you start offering warranties, you should consult the equipment manufacturer’s specifications first, as well as federal, state, and local building codes.
Workmanship warranties are often confused with labor warranties. These types of warranties cover mistakes made by laborers during installation – i.e. roof leaks and other workmanship issues. It also covers how the products/materials were implemented.
If an issue arises with the warranty, the customer is supposed to contact the contractor first before filing a legal complaint in either civil court or small claims court, where the contractor will be required to handle the expenses. The customer can also contact a third-party agency like a licensing board to perform inspections which will help settle the dispute.
The current trend is to offer longer-term warranties, as they can be a great selling point. A few years ago, you’d normally see 1-year warranties, but now they often range from 5-10 years.
Labor warranties cover all the work performed on the property provided by you, the contractor. Typically labor warranties for repairs are offered for 90 days alongside a manufacturer’s warranty on parts – so if a part breaks 4 months down the line, the customer has to pay the labor cost to replace the part.
It’s good to include this in your contract for legal reasons – there’s always the off-chance you’ll get a customer who tries to take advantage of your time. However, it’s a good idea to make it clear to customers that you still want to know if issues occur, so that you can avoid future issues and maintain the relationship.
Sometimes, if it’s a quick job, it’s often a good idea to fix it on the house, or just charge for gas and labor – this creates goodwill with customer, instead of making them feel like you’re nickel and diming them and can be worth the cost of referrals and great reviews.
It’s important to note that labor warranties don’t cover installation errors. You should also decide if you’ll structure your warranty to cover repairs or maintenance done by someone else, or if that will void your warranty.
Manufacturer warranties, also known as material warranties, are provided by the manufacturer of the equipment you’re using. They usually cover malfunctions and failures due to manufacturing defects or poor product performance over a short period, and typically only cover the main components of the product (not it’s accessories).
The length of warranty differs dramatically depending on industry – ex. HVAC units often offer 5-year warranty while most roofing shingles come with a basic, limited lifetime warranty.
Homeowners can pay extra for an extended warranty. Warranties differ from product to product, but typically only cover materials or sometimes offer a credit towards replacement. Keep in mind that some manufacturers will ask for contractors to become certified (sometimes through classes) in order to use their line of products.
A full-system warranty is all encompassing. This means it covers materials, accessories, labor, and possible repairs/maintenance down the road. The rising cost of labor and materials can impact the bottom line, so it’s good to clearly lay out what your warranty covers, especially because such a general name can be misleading.
And just like that, we’ve covered everything you need to know about warranties. Now, you’re ready to streamline your day-to-day administrative activities with FieldPulse’s business management software.
