How to Write a Service Contract

When you buy a particular item, most often vehicles and equipment, you may have an opportunity to enter service agreement. Service contracts provide repair or maintenance services on the item that you buy for a specific period. A service contract is often compared to extended warranty. However, a service contract usually costs extra, while an extended warranty is usually included in the price of the item. If you are buying an item and are considering adding a service agreement, how to make a contractual agreement and how to execute it, to understand how a service agreement may be required, this article Read on.

Deciding whether you need a service agreement

Determine the possibility of service requirement. Before creating and signing a service contract, think about the product that you are buying and whether the product needs services covered by such an agreement. Often, the product you are purchasing does not need to be repaired or, if it does, then the cost of repair can be reduced.

For example, you may not need a service agreement for a washing machine purchased from a reputable company with a great track record to create quality products. In addition, if your washing machine comes with a warranty, then the warranty can cover all the repairs you need.

However, you can consider a service contract for the vehicle you used to buy when you need to break that vehicle and continuously, expensive repairs. Also, in this situation, it is unlikely that your purchase will include warranty, so a service contract can be a good idea.

Ask yourself if you need additional coverage. When you are buying an item with a warranty, read and analyze that warranty so you can understand what it covers. In many situations, there will not be too much coverage in a service contract, so it can not be an intelligent addition. If the service contract is worth the cost, compare the coverage of your potential service contract’s warranty to determine it.

Consider the duration of the service contract. In some cases, a service contract can last only for a period of months, and therefore can not be worth the cost.

See the terms of service agreement. In some situations, a service contract can only cover a very limited set of repairs, and therefore may not be worth the cost.

However, remember that if you are going to write your own service contract, you will be able to define the length of coverage as well as what will be covered.

Know who you will contract with. If you are buying an item and want to enter a service agreement, you need to research the company or person with which you will contract. If you enter into a contract with another party, and that another party goes out of business or can not pay claims, then you can not be able to get the benefits given in the contract. Before entering the service agreement, think about the financial stability and reputation of the other side.

For example, if you are buying a used car from a used car dealership, consider entering the dealer’s history before entering into a service agreement with them. If the dealership has been around for a long time, then there is a proven track record of placing their contractual promises, and it seems that there is a solid financial base, you can enter into the service contract with them. However, if the dealership seems unreliable or is not around for a long time, you may consider not signing a service agreement with them.

Think about alternate options. Instead of entering into a service contract, consider saving it by putting that money into some type of savings account. In this situation, the money you have saved can be used for any repairs that you may need. However, if you feel that you may need a sufficient number of repairs, or if the repair becomes expensive without the service agreement, then your money may be better spent entering the service agreement.

Writing the Service Contract

Start with the general information of each party. At the beginning of every contract, you should include a title, a date, and any general information about the parties for that contract.

For example, the title of your service contract can be “Vehicle Service Agreement” and it can open with a paragraph explaining: “This vehicle service agreement between [your name] and [other party’s name on _____, 2015 ] Or title] “You can follow it with each party’s details, including each side, their address, phone number, and email address.

Define the product on the issue. Before your service contract enters the body, you need to define the product being bought, which is a product that will be the subject of any maintenance or repair.

For example, if you are entering a vehicle service agreement, you would want to include details of the vehicle being covered under the contract. This will include vehicle VIN number, make, model, year, purchase price of the vehicle, and any other identity information about the vehicle you have.

As an additional measure of assurance, you may want to include a copy of the purchase and sales agreement as an exhibit at the end of your service contract.

Include details of the idea of ​​each party. For a valid and enforceable contract, each party has to pay some value. In a service agreement, the seller of an item must be providing its services, which will be used when the item needs repair or maintenance. On the other hand, the buyer of an object usually leaves the money, which can either take the form of something like a lump sum or a cut-off.

If you are writing this provision to include a one-time payment, consider asking: “Buyer will pay to the seller [dollar amount], consider the services provided by the seller under this agreement. In return , The seller will provide the buyer with the services. Further in this agreement. “

If you are writing to include this provision in a deductible, consider: “In the event the seller needs to repair or maintain on the purchaser’s product, as provided in this contract, the service received To make a deductible payment to the buyer, every request for the repair or maintenance of the seller from the buyer, to the buyer’s vendor in the amount of [dollar amount] Will pay. “

Set the length of coverage. A service contract will usually be a word contract, which means that it will be effective for the duration defined in the contract. The length of coverage can be defined by any factor, but it is usually defined by the length or event of an event.

If the effective period of your service contract will be defined according to the time, then consider it saying: “This contract will be effective as of [date] and will expire on [date].”

If the effective period of your service contract will be defined by a set of events, then it may look something like this: “This contract will be effective on the date of purchase of the buyer’s vehicle from the seller, the contract will end when the buyer The vehicle’s odometer [greater than the number of miles].]. “

Include in a near-exit list of what will be covered. Once you define the length of the parties, products, and coverage, you will start preparing the body of the service contract. One of the most important provisions of your contract will be what will be covered under the agreement. In a service agreement, coverage will include the number of maintenance or repair activities.

For example, if you purchased a sound system from a vendor, the seller might request a language that looks like this: “We, as a seller, will cover the maintenance and repair activities under this contract:” Seller Buyer Will provide annual inspection of sound system; Seller will provide initial testing and installation services to buyers; And the seller will provide repair services to buyers for repair as a result of normal wear and tear. “

Any list you create can be expanded and as you think it is necessary. In general, you want to be as elaborate as possible so there is no misunderstanding between the parties.

List any exclusions for coverage. Once you have listed what will be covered under your service agreement, you have to define what will not be covered under the service contract.

For example, if you have purchased a sound system from a vendor, that seller may request a language that looks like this: “This agreement will not cover the following items: All labor for the maintenance and repair of any device Which is not part of the system; All changes in labor, removal, redemption, or any part of the system for the movement, by any third party in relation to the services. The fee vendor provides under this agreement, which includes utilities and other contractors; fees in relation to all state and local taxes or services provided under this agreement; and repair of equipment due to improper use or storage of system Any cost including necessary labor. “

Describe additional duties. In some service contracts, in relation to vehicles, a contract may include a provision about the duties. In this provision, which is usually in favor of the seller, there may be additional requirement that a buyer must comply before covering it under the service contract.

For example, in a service agreement with respect to a vehicle, a seller may request a language that looks like this: “Before the seller is obliged to fulfill his duties as defined in this contract, the buyer You will need to check and service your vehicle.The recommendations of the manufacturer, as outlined in the vehicle owner’s manual, all validated receipts are of any service. Should be kept for me and the seller can be requested before following his duties. “

Determine how claims will be filed. Another important section will define how claims will be filed, which is to say how the buyer will call the seller for any maintenance or repair.

For example, if you are writing a service contract about a vehicle, then filing provision can look something like this: “If buyers require maintenance or repair of the vehicle, then the buyers are required to file a claim. These steps should be followed: (1) the buyer should stop the damage leading to it; (2) Buyers should take the vehicle for the licensed repair facility; (3) (4) The facility of repair should be obtained by the seller authorization to complete the requested work; (5)) The buyer will pay the required deductible (if applicable), (6) the buyer Seller will provide with any and all receipts as a result of repair or maintenance. “

Include any required boilerplate language. Boilerplate provisions are specific sections covered in almost all contracts that have a known meaning and an estimated result. These segments often include selection of severity segments, full agreement clauses, mediation agreements and law provisions.

For a list of common boilerplate provisions, as well as for their specific language, see here.

Add place for signature. At the end of your service agreement, you will provide all parties the place to sign and date the contract.

Executing the Service Contract

A proposal. When the contract is ready, send it to the other party. The second party will examine the contract to ensure that the terms are in accordance with them. In some cases the other side will sign and return the contract immediately. More often, he will respond with a response. If there is a counter notification, then read any changes carefully and decide if they are acceptable before you sign.

If you want to speed things up, then you can include a date through which the contract should be signed, addressed or rejected. Otherwise, the other party is forced to respond within “appropriate time”, but it is highly subjective.

You can cancel a proposal that has not been accepted yet. For example, if you offer someone a proposal and he is considering this, but he has not accepted the proposal, then you can tell him that you have changed your mind. However, once you accept the proposal, you have entered into a compromise agreement.

Talk until the agreement is reached. As long as they are not satisfied with the two conditions, it is common to return the parties with the change in the contract.

In any way, parties are welcome to change the contract, so long as the other party sees the changes and has an opportunity to respond.

Ensure that you are fully satisfied with the terms before signing the contract. It is very important to read through the entire contract to ensure that no changes have been made without your knowledge. After signing, you are legally obliged to perform under the terms of the contract.

Sign the contract. When both you and the other party are in contract that the contract is final, then sign and date the contract and do the same with the other side.

Be aware that many companies use electronic signature services such as documentin or Adobe document cloud with eSign. These electronic signatures are used in place of written signatures and are legally binding.

Keep a copy of the contract for your reference, and make sure that the other party (or parties) also have one.

You want to be effective at signing the contract. In other cases, you may want to make the contract effective on a fixed date.

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