Service terms and conditions every company needs

What good terms do for a service company

Service terms are not there to win lawsuits. They are there to make sure the customer and the tech agree on the same things before a wrench turns: what is being done, what it costs, when it is paid, what is guaranteed and what happens if something goes wrong. Most of the disputes that end in a chargeback or a one-star review start with one of those five questions left unanswered.

Reviews raise the stakes. 82% of US adults at least sometimes read online ratings or reviews before buying something for the first time, and 40% always or almost always do^[3]. A clear set of terms, handed over before the job, prevents the kind of surprise that turns into a public complaint.

The clauses, in the order customers meet them

1. 01

   Scope and work authorization

   Describe the work, the equipment or areas covered and what is excluded. The customer signs or approves electronically before work starts. Add a line for change orders: any extra work needs a new approval.

2. 02

   Estimates, diagnostics and trip charges

   Say whether an estimate is fixed or may change, how long it is valid and whether the diagnostic or trip charge is credited if the customer proceeds.

3. 03

   Payment

   When payment is due, accepted methods, deposits on equipment and special orders, and what happens with late payment. State law can limit late fees and interest, so confirm yours.

4. 04

   Warranty

   Your labor warranty in plain words, how to make a claim and what voids it. Manufacturer parts warranties are passed through to the customer; say who handles the claim.

5. 05

   Limits of responsibility

   Pre-existing conditions, hidden damage found when opening walls or roofs, code upgrades required by the inspector and damage caused by others. Some states limit how far you can exclude your own negligence.

6. 06

   Cancellations and rescheduling

   How much notice the customer must give, any fee for missed appointments and, where the Cooling-Off Rule applies, the customer's right to cancel.

7. 07

   Access and site conditions

   Pets secured, clear access, utilities on, who pulls permits and who obtains HOA or landlord approval.

8. 08

   Communications and recording

   Consent for appointment texts and how to opt out, and notice if calls are recorded.

9. 09

   Disputes

   How a complaint is raised, a short window to let you fix the problem and the governing law and venue. Some states restrict arbitration clauses in consumer contracts.

Reviews: what you cannot put in a contract

Some older contractor templates still include "non-disparagement" language. Under the Consumer Review Fairness Act, a form contract, including online terms and conditions, cannot bar or restrict a customer's ability to review your business, impose a penalty or fee for a review or require the customer to give up intellectual property rights in the review's content^[1]. The FTC's 2024 rule on fake reviews also bars businesses from using unfounded legal threats to suppress negative reviews and lets the FTC seek civil penalties against knowing violators^[4].

You can still ask a review platform to remove content that is defamatory, harassing, unrelated to your services, clearly false or that reveals confidential information such as trade secrets^[1]. A disagreement with a customer's opinion is unlikely to meet that bar^[1]. The better move is a fast, polite public reply and a phone call.

The Cooling-Off Rule and in-home sales

The FTC's Cooling-Off Rule gives buyers until midnight of the third business day after a sale to cancel for a full refund on many sales made at their home, with Sundays and federal holidays not counted^[2]. It does not cover sales under $25 made at the home^[2]. Two exceptions matter for service companies: sales made because the customer asked the seller to visit to repair or maintain their personal property, and sales needed to meet an emergency^[2].

The trap is the upsell. The FTC says things the customer buys beyond the repair or maintenance request are covered^[2]. A tech who comes out to fix a furnace and sells a new system at the kitchen table may be making a sale the customer can cancel within three business days. Build that into your process: give the required cancellation notice, schedule installs after the cancellation window when practical and train sales techs to say it plainly.

Call recording and texting language

If you record calls for training or disputes, say so in your greeting and in your terms. Federal law allows recording when one party consents^[5], but some states, such as Florida, require consent from all parties^[6]. A short line covers both: "Calls may be recorded for quality and training." For texts, record the customer's consent to receive appointment messages and honor opt-outs right away.

Write them so customers read them

• One page for residential customers. Put the details in a linked full version on your website.
• Plain words: "We guarantee our labor for one year" beats "Contractor warrants workmanship for a period of twelve months."
• Use headings that match the questions customers ask: price, payment, warranty, cancellations.
• Put the key terms on the estimate the customer approves, not only on the back of the invoice.
• Use the same version in your booking confirmation emails, website and field software, and date each version.

Your phone team should know the terms too. When a caller asks about the trip charge or warranty, every CSR and any answering service should give the same answer that appears in writing.

Commercial and property manager accounts

Residential terms rarely fit commercial work. Property managers, landlords and businesses usually send their own vendor agreements, and those often shift risk to you. Read them for the clauses that matter most before you sign:

• Indemnity: does it make you responsible for losses you did not cause?
• Insurance: limits, additional insured wording and waivers of subrogation your policy may not include.
• Payment: net terms, invoice formats and work order numbers required before they pay.
• Not-to-exceed amounts: the dollar limit above which you need written approval to continue.
• Tenant access: who arranges entry and who pays when a tenant is not home.

Where their agreement is silent, attach your own terms to each work order so warranty and hidden-damage rules still apply. Send changes to your insurance agent before you accept new indemnity or insurance wording.

Keep the terms current

Terms drift out of date as you add services, change software or move into a new state. Put a yearly review on the calendar, and update the terms sooner if you:

1. Add a new service line such as EV chargers, generators or pest exclusion work.
2. Start selling memberships or financing.
3. Begin recording calls or sending automated texts.
4. Expand into a state with different contract or home improvement rules.
5. Change warranty length or the parts brands you install.

Date each version, keep the old ones and note which version each customer approved. If a dispute comes up two years later, you will need to show the terms that applied to that job.

Example: a disputed water damage claim

Example: a fictional handyman company replaces a bathroom vanity and finds rotted subfloor under it. Because its work authorization includes a hidden-damage clause and a change-order line, the tech stops, photographs the damage, explains the options and gets a signed change order before repairing the subfloor. When the customer later questions the bill, the photos, the clause and the signed change order resolve it in one phone call. Without them, the same job would likely have ended in a chargeback.