Repair Contracts 101
Repair contracts are a critical component of the service industry. While they can be commonplace, there is actually a lot that goes into the composition of a basic agreement. In the most basic of terms, a repair contract is composed when a service provider (contractor) agrees to perform a specific task of repair in exchange for payment from a client (customer). Usually, these contracts are put into place when we are dealing with broken things. While generally this might refer to a car, it can also mean anything from furniture to air conditioning units . The primary reason that we enter into any kind of contract between two parties is for the protection of both parties against contractual mishaps. This is especially true in the case of a repair contract because we are dealing with two people from different sides of the service spectrum (i.e., the person paying; the person providing the service). Naturally, there are various reasons both parties want to uphold the contract. For example, the customer wants repair work completed properly and the contractor wants to get paid fairly for services rendered.
Components of a Repair Contract
A repair contract sample is basically a template that presents the fundamental requirements to include in such a legally binding document. While there is no one-size-fits-all template to use, this type of contract typically contains at least the following elements:
Parties to the Repair Contract
As with all contracts, there has to be a meeting of the minds between the parties (termed "mutual assent" in contract law). In the case of a repair contract, one party is the customer who has hired another individual or business to perform certain tasks regarding the repair of an item or property. The form sample should clearly identify both of these parties, typically in the introductory paragraph preceding the recital, using full names, addresses, phone numbers, and email addresses.
Scope of Work
This section of the repair contract should specifically outline the work to be performed by the service provider and the rights of the customer or property owner. It also should include any contingencies and special agreements that have been made by both parties and underscore that the customer is paying for the above-mentioned services, and that this is also agreed to by the other party.
Costs
This should be an itemized list of expenses that the customer is agreeing to cover for the service provider. It should be presented as exactly as possible so that there are no additional costs or fees that the two parties did not agree to. Let’s say you want to hire someone to complete work on your swimming pool. The costs of materials needed must be itemized, so that you aren’t just paying an amount that was offered without being first given an idea of what that amount should be based on what needed to be done. You do not want to run the risk of getting your final bill and noticing that one line item is not exactly what you discussed.
Identify the Due Dates
This is an extremely important element, and it is common for the due dates to get missed if they are not included in the repair contract. There should be a time limit for both parties in the repair contract, such as how long a repair will be done on a piece of property. Stipulations should be included that state that the repairman must stay in contact with his or her client if there are going to be missed deadlines or budget increases. This allows the customer to make an informed decision about whether they want to go with another contractor or not. These dates can be recalibrated as well in the future if both parties desire to do so.
Omitting Important Details
The key to successful contracts is that all of the parties involved have agreed to everything that is laid out within this legal document. If the customer and the repair person have not specifically agreed on the details in advance, the customer could hold a vital payment (or worse, take legal action) for something that the service provider did not understand as part of their bid. A contract exists for the very reason that both parties do not have to take a defendant out into the open air to discuss their disagreements. It also protects the same individuals from dishonest contractors and service providers.
Common Provisions Found in Repair Contracts
When drafting a repair contract sample, specific provisions are typically included in a standard agreement.
Payment Terms. Payment terms outline how and when payment will be rendered for the service provided. A typical repair contract sample may require a full or partial down payment due at the time of contract signing and detail the remaining balance and when it becomes due.
Warranties. Warranties provide assurance from the repair services provider to the client that the services will be of high quality and free from defects for a certain period of time. Warranty terms may include when the warranty begins and how long it is effective, an overview of what the warranty covers, and a list of conditions under which it will be voided.
Dispute Resolution. Dispute resolution provisions spell out how the client and the repair service provider will settle disputes between them. It may also include what state’s laws govern the agreement and offer resolution methods, such as arbitration or mediation.
These are some of the common clauses found in repair contracts which serve to protect both the service provider and the client and help ensure the repair service runs smoothly.
Repair Contract Sample
[Your Name or Your Company Name]
[Address, e.g., 123 Main St., City, State Zip Code]
[Phone Number]
[Email Address]
Repair Contract
Effective Date: [DATE]
This contract is made between the undersigned "Repairman" and "Customer". The parties hereby agree as follows:
1. SERVICES: Repairman shall provide the following Services (as defined below) with respect to the Subject Matter (as defined below):
[Include in this section all details of the service to be performed. Describe the objectives, benefits, and results that will be achieved for the Customer.]
2. SUBJECT MATTER: The subject matter of this Agreement (the "Subject Matter") is:
[Describe the item or property that is the subject of the repair. Include the make, model, and serial number.]
3. COMPENSATION: The Customer agrees to pay Repairman the sum of $[XX.XX] for the Services. The price is based on the following factors:
[A breakdown of the cost based on the materials and labor required. Provide rates for hourly work, parts, and so on.]
4. PAYMENT TERMS:
A. Upon execution of this Agreement, the Customer shall pay to the Repairman a retainer of Ten Percent (10%) of the total consideration for the Services (the "Retainer"). At the completion and acceptance of the Services, the Customer shall pay to the Repairman the balance of the consideration for the Services within seven (7) days of invoice.
B. In this regard, the Repairman shall promptly inspect the Subject Matter, take all necessary action to repair the Subject Matter, and then promptly notify the Customer that the Services are complete. Upon receiving notice that the Services are complete, the Customer shall pay the remainder of the consideration for the Services within seven (7) days of invoice.
5. PRICING TERMS: The following pricing terms govern this Agreement.
A. Service Rates / Labor. The Customer agrees to pay the Repairman (a) $[XX.XX] per hour for services rendered by the Repairman and (b) $[XX.XX] per hour for services rendered by any subcontractor, partner, consultant, or other representative of the Repairman. The Customer is responsible for payment of all service rates as specified in this Agreement.
B. Parts / Materials. Parts and materials sold to the Customer are priced at a markup over the Repairman’s cost of the parts and materials as shown on the Repairman’s invoice. The markup will not exceed thirty percent (30%) of the repairman’s cost. The Customer is responsible for payment of all parts and materials as specified in this Agreement.
C. Taxes, Transportation, and Other Charges. All sales, use, excise, income, and/or capital gains taxes, and all federal, state, and local taxes, fees, charges, and other amounts that may now or hereafter apply to any aspect of this Agreement, including all transportation and other charges, shall be borne and paid by the Customer.
D. Reimbursement. In addition to pricing provided herein, Customer agrees to promptly reimburse Repairman for all expenses incurred by Repairman in connection with this Agreement, including but not limited to, travel, food, lodging, long-distance telephone, copies, printing, postage, parking, and communication charges. Repairman shall attach to the invoice a receipt for each payment it seeks reimbursement for, with the exception of travel expenses. The Customer shall remit full reimbursement within seven (7) days after receipt of the invoice.
- WARRANTIES: All repairs performed and repairs" parts and/or materials supplied by the Repairman to be performed and supplied pursuant to this Agreement are to be performed and supplied on a no-warranty basis, and neither the Repairman nor any of its agents or employees have made any promises or guarantees with respect to the results of such repairs. The Customer understands and acknowledges that all deliveries of repaired materials are on a no-warranty basis.
- ENTIRE AGREEMENT: This is the entire Agreement regarding this matter and it replaces all prior written or verbal agreements. The Parties may not amend this Agreement except in writing.
- SEVERABILITY: If any provision of this Agreement is held to be invalid, illegal, or unenforceable, for any reason, that provision shall be fully severable and shall not affect the validity, legality, or enforceability of any of the remaining provisions of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall be construed as if this Agreement did not contain the invalid, illegal, or unenforceable provision.
- GOVERNING LAW: This Agreement shall be construed and controlled by and in accordance with the laws of the State of [XXXX] without regard to its conflicts of laws provisions.
Legal Considerations for Repair Contracts
Repair contracts are agreements made between a repair person of any kind and a client, when having any type of appliance repaired. It is crucial to always have a written agreement whether the repairs are performed by one person or an entire business. Vocational schools and novice enthusiasts also use these written contracts. There is a special section that will be included here. It contains information on specific repair contracts, putting clients in contact with school or businesses.
The first legal consideration in a repair contract is to make certain it complies with local laws and regulations . All types of repairs need to comply with safety codes and ordinances. Depending on the type of repair, it may need to be signed off on a certificate to be filed in a certain place. There are licenses that are required for some kinds of repairs.
Legal protection is included in any type of contract whether it is residential or commercial. If one party breaches the contract, the remedy to resolve the issues is outlined in the contract. There are two forms of remedy for breach of contract. The first is the award of damages and the second is specific performance. Both can be included in the contract language.
How to Negotiate Repair Contracts
When drafting a repair contract, you are always in negotiations with the other party (or parties) involved – even if you don’t realize it. If they want you to repair or replace something, if you don’t have mutual understanding regarding your obligations, and if you want to address the parameters of the job early on, then you should definitely be looking at negotiating terms. In most cases, negotiations end up being fairly amicable. It’s possible for negotiations to be more tense (such as when payment isn’t made promptly, or there are damages that aren’t covered). You can reverse many problems with the following negotiation strategies: These are tips that will help you make a professional, amicable and legally sound negotiation for a repair contract.
Common Mistakes to Avoid
When preparing your own repair contract sample, it is critical to avoid the common mistakes that so often result in disputes and claims. Your repair contract should clearly set forth the scope of work, the payment terms, any contingencies related to timing and materials, and a clear process for approval of any changes. Ambiguous terms can lead to misunderstanding and arguments over whether an obligation actually exists. The following are some matters to be sure that you are not leaving open to interpretation: The foregoing is not an exhaustive list of issues that should be addressed in a repair contract – it is only the start of what should be a careful process to ensure that all parties have a unified understanding, and are contractually bound to the limitations and requirements, for each aspect of the repair contract.
How to Amend or Renew an Existing Repair Contract
When you are considering whether to revise and update your repair contract template, it’s important to explore two scenarios in which you should do so: 1) when there are changes in your company that affect the contract, and 2) when your business operations and strategies evolve over time and you want to make some necessary adjustments. After all, the repair contract you use is an important element to your customer interface. You should not hesitate to update a contract to reflect the latest developments concerning your business.
The first consideration you must keep in mind is whether you have increased or decreased the scope of your repair business from when you first established your repair contract template. Further, you should ask yourself whether the needs of the company have changed since to warrant an update to the repair contract terms and conditions.
Moreover, if your business has grown and evolved to the point where your existing repair contract is no longer a viable option for you and your customers, you should consider updating your repair contract template . There are a number of ways that your business could change that necessitates updates to your repair contract template, including:
In general, if your repair contract template is incompatible with your business model as it currently exists, you should choose to revise and update your document.
If you do in fact choose to revise and update your existing repair contract template, it is best to document the changes in writing and make every effort to communicate the changes to your customers. In this regard, using your website could be effective for informing any new customers as to the updates to your repair contract template. In addition to informing new customers, you should do your best to inform your existing, long-term customers of the updates to your repair contract template.
If you have a good reputation as a repair business, it may be easiest to use your website to inform customers of updates to your repair contract template. Posting the changes in an obvious manner is best, like on your website’s home page (but not the only page) to ensure that as many of your customers as possible are informed of the updates. Communication is key when doing any sort of revision or update to your repair contract template, so do your best to ensure that both new and existing customers become aware of the changes.