Service Agreement
Definition
A service agreement is a written contract between a contractor and customer that defines the scope, price, and terms of ongoing service work.
What Service Agreement Means for Your Business
What it means
A service agreement is the paperwork that formalizes a commercial or residential service relationship. It spells out what is covered, what is not, how often work happens, and what the customer pays.
Why it matters
Service agreements prevent disputes, lock in revenue, and raise the value of your book of business. They also turn you from a vendor into a partner in the customer's eyes.
How contractors use it
The CSR or salesperson presents the agreement on first visit or after a repair. Customers sign digitally, payment terms get set up, and the system schedules all future visits automatically.
Real-World Example
A commercial HVAC company sold a $14,400 annual service agreement to a 50,000 sq ft office building covering 4 visits and priority repair response. That one agreement generated $38,000 in additional repair work that year.
Related Terms
Recurring Service Agreement
A recurring service agreement is a contract that auto-renews and bills a customer on a fixed schedule for ongoing maintenance or priority service.
Planned Maintenance Agreement
A planned maintenance agreement is a contract where a customer pays a recurring fee in exchange for scheduled inspections and tune-ups of their equipment.
Maintenance Plan
A maintenance plan is a customer-facing product that bundles routine inspections, discounts, and priority scheduling into a single recurring purchase.
Digital Signature
A digital signature is a legally binding electronic mark a customer applies to a document on a screen, replacing a physical ink signature.
Membership Plan
A membership plan gives customers priority service, discounts, and perks in exchange for a monthly or annual fee.
Put This Into Practice with Free Software
Kaldr Tech handles service agreement and everything else you need to run your shop. $0/month, 3.5% + 30¢ per transaction.