Updated July 19, 2023
An HVAC contract formalizes an agreement between a heating, ventilation, or air conditioning provider and a client. HVAC contracts may be used for installation, maintenance, service and repair, or all of these. Because the technology involved is somewhat specialized, HVAC devices are usually serviced by designated contractors rather than general repair or electronics technicians.
Common HVAC Jobs
- Residences, particularly in hot climates
- Commercial buildings, including
- Restaurants
- Commercial kitchens
- Large office buildings
- Industrial facilities dealing with sensitive fumes
Table of Contents |
What Should be Included? (6 items)
1. Scope of Work
This section will specify what work is expected of the HVAC personnel. If it is a repair job, the contracts will typically include:
- The make and model of the HVAC unit;
- The date it was originally installed; and
- What about the unit needs to be fixed, or if no solution is yet known, a description of the problem.
If the nature of the problem is unknown, the contract should specify that part of the technician’s job is to determine the problem.
Installation contracts will differ. They will specify:
- The type of unit being installed;
- Related tasks necessary for installation (such as drywall patching and wiring); and
- Future work included with installation.
2. Schedule
Because HVAC units are both energy-intensive and frequently used, they face heightened risks of mechanical problems. As a result, they typically have regularly scheduled service or maintenance visits that occur even when the unit seems to be operating perfectly. These services are often included with the cost of installation. If this is the case, the contract should specify how frequently maintenance visits will occur and the type of work that will typically be conducted.
3. Payment
There are two principal methods for arranging payment for HVAC contractors, either of which may be spelled out in the contract.
If the service is an installation, which includes labor, the cost of the unit itself, and possibly future maintenance, then an installment structure is likely the most popular option. The payment section should note the amount of the down payment, if any, and how frequently payments are expected. In some cases, HVAC contractors have their own financing divisions that may assess an interest charge in return for a more relaxed payment schedule.
If the service is a repair job, which does not include the cost of the unit, then an installment plan is less common. The payment section should identify the hourly rate commanded by the technician, plus the cost of any replacement parts that are necessary.
4. Utility Charges
Because HVAC units use large amounts of electricity and contribute substantially to the owner’s utility bills, HVAC contracts usually specify that the contractor is not responsible for utility costs associated with the service, installation, or repair. The contract may also state that the HVAC contractor is not responsible for sudden increases in power bills that stem from HVAC malfunctions, although this may also be addressed in the warranty section.
5. Warranty
If the HVAC unit is purchased and installed through the manufacturer, then the purchase likely includes warranty and product liability policies that the customer agrees to as a condition of the purchase and may automatically include several service or repair visits. If one of these policies is already in effect, and the customer is attempting to work with a contractor outside of the policy without the contractor’s knowledge, then the contractor’s work could violate the warranty terms. HVAC contracts should specify that contractors are not responsible for any costs incurred by the customer as a result.
6. Termination
For ongoing service contracts, the contract should make clear what happens if the customer wants to terminate the contract ahead of the scheduled end date. For example, a service contract may include eight visits over a set period of time, and if the customer wishes to end the agreement before all eight have been used, the contract may return some of the customer’s money while imposing a small cancellation fee.
Sample
HVAC Contract
I. THE PARTIES. This HVAC Contract (“Contract”) made on [DATE] is by and between:
Contractor: [NAME], with a mailing address of [ADDRESS] (“Contractor”), and
Client: [NAME], with a mailing address of [ADDRESS] (“Client”).
The Contractor and the Client are each referred to herein as a “Party” and collectively as the “Parties.”
WHEREAS the Client intends to pay the Contractor for Services provided, effective [DATE], under the following terms and conditions:
II. SERVICES. The Contractor agrees to provide the following: [LIST SERVICES]
Hereinafter known as the “Services.”
The Contractor agrees that they shall comply with all policies, standards, and regulations, including local, State, and Federal laws in providing the Services.
III. COMPENSATION. In consideration for the Services provided, the Contractor is to be paid in the following manner: (check all that apply)
☐ Per Hour. $[AMOUNT] / hour.
☐ Per Job. $[AMOUNT] for the completion of the Services.
☐ Other. [LIST].
The Contractor agrees to be paid: (check one)
☐ Completion of Work.
☐ Receipt of Invoice.
☐ Other: [LIST].
IV. METHODS OF PAYMENT. The Contractor’s acceptable methods of payment are as follows: (check all that apply)
☐ Cash
☐ Check
☐ Credit Card
☐ Venmo
☐ Other: [LIST]
V. LATE FEES. If a payment due by the Client is not made within the requirements mentioned in Section IV, there will be: (check one)
☐ No Late Fee. There shall be no late fee due by the Client.
☐ A Late Fee. The Client will be charged: (check one)
☐ A Flat Fee. The flat fee is equal to [AMOUNT] for each day payment is late.
☐ Based on Interest. Interest of [PERCENTAGE]% will be charged on the outstanding balance due for each month payment is late.
VI. INSPECTION OF SERVICES. If any of the Services performed by the Contractor pursuant to this Agreement are defective or incomplete, the Client shall have the right to notify the Contractor, at which time the Contractor shall promptly correct such work within:
☐ A specified period. Defect must be corrected within [NUMBER OF DAYS] upon receipt of written notice.
☐ A reasonable time. Defect must be corrected within a reasonable time period.
Defects must be identified within a period of [NUMBER OF DAYS] after the completion of the Services, after which time the right to notify will expire.
VII. LIABILITY INSURANCE (MINIMUM ($) AMOUNT). The Contractor agrees to bear all responsibility for the actions related to themselves and their employees or personnel under this Agreement.
The minimum amount ($) for the Liability Insurance shall: (check one)
☐ Be a minimum amount of combined single limit of $[AMOUNT].
☐ Not have a minimum amount required.
☐ Neither party shall be required to maintain insurance.
VIII. TERMINATION. This Agreement shall terminate upon the: (check one)
☐ Completion of the Services provided.
☐ Date of [MONTH], 20[YEAR].
☐ Other. [LIST].
In addition, the Client or Contractor may terminate this Agreement, and any obligations stated hereunder, with reasonable cause by providing written notice of a material breach of the other party.
IX. OPTION TO TERMINATE. The Client and Contractor shall: (check one)
☐ Have the option to terminate this Agreement at any time by providing [NUMBER OF DAYS] days’ written notice.
☐ Not have the option to terminate this Agreement unless there is reasonable cause, as defined in Section VII.
X. MISCELLANEOUS. The Contractor and the Client agree to the following:
-
- Independent Contractor. It is agreed that the Contractor will be considered an independent contractor for the purposes of this Contract.
- Taxes. Any taxes due as part of the Contractor providing their Services in this Contract are the sole responsibility of the Contractor.
- Additional Services. Any additional services (“Additional Services”) must be requested by the Client in writing and are subject to rejection by the Contractor should said request be impossible or inconvenient to meet.
- Damage to Equipment. The Client will be responsible for any damage or loss to the Contractor’s equipment due to misuse or theft by the Client or any guest of the Client and in the case of a force majeure event.
- Liability and Indemnification. The Contractor will not be liable for direct, indirect, incidental, or consequential damages (including, but not limited to, damages for lost profits or increased expenses) with respect to any claim related to this Contract and the Services provided.
XI. SEVERABILITY. Should any provision of this Agreement be determined to be void, invalid, unenforceable, or illegal for whatever reason, such provision(s) shall be null and void.
XII. GOVERNING LAW. This Contract shall be construed and governed in accordance with the laws located in the State of where the Services are performed.
XIII. ADDITIONAL TERMS & CONDITIONS. [LIST]
XIV. ENTIRE CONTRACT. This Contract constitutes the entire Contract between the Parties. No modification or amendment of this Contract shall be effective unless in writing and signed by both Parties.
XV. EXECUTION. The Contractor and the Client each represent and warrant to the other that each person executing this Contract on behalf of each party is duly authorized to execute and deliver this Contract on behalf of that party.
The parties have duly executed this Agreement as of the date first written above.
Contractor’s Signature: _________________________
Print Name: [CONTRACTOR NAME]
Client’s Signature: _________________________
Print Name: [CLIENT NAME]