Whether you are a heating, ventilation, or air conditioning (HVAC) service provider or are hiring one, it’s important to put working terms in writing. It helps set the foundation of a smooth working relationship.
A contract specifies the scope of installation, repair, or maintenance services, along with other terms such as compensation, schedule, duration, and responsibilities.
It defines service expectations for both parties and helps avoid misunderstandings. For a service provider, it protects their reputation and provides fair compensation. And for clients, it helps keep their HVAC systems running efficiently.
So, if you are looking for a good service contract, this template is for you. Our free, ready-to-use HVAC service template is designed to fulfill the needs of both clients and service providers. But before breaking down this contract, let’s first look at what it is and who can use it.
What is an HVAC Service Contract
In simple terms, an HVAC contract is a formal document that defines the working relationship between the service providers and their clients. It outlines the terms and conditions of the work setting to make sure both parties have a smooth experience.
HVAC Service Contract Template
This template is suitable for a wide range of users, including HVAC contractors, companies, and independent professionals. It is also a good fit for clients seeking HVAC services, for example, homeowners, business owners, tenants, renters, landlords, property owners, and property managers handling residential or commercial buildings, retail stores, restaurants, and industrial facilities.
Now, let’s move forward and dissect each section of the template in detail.
Identifying the Contract Parties
The first step is to write down the date on which the parties are signing and identify the parties to the contract. It includes the following details about clients and contractors:
- Name
- Company name (if any)
- Address
- License number (Contractor’s only)
Next up, we have added two options about where services will be provided: commercial property or residential property. Select one option and write down the address.
Commercial property HVAC services vs. residential property HVAC services
Commercial HVAC services mean heating, ventilation, and air conditioning services for commercial spaces like offices, retail, and warehouses designed for business use. Whereas residential property HVAC is for homes, apartments, or other living spaces.
Residential HVAC setups are used to cater to single families or small multifamily settings with limited spaces, while commercial setups are intended for larger environments and are more complex. Commercial systems often require a full team, more technicians, and more equipment. Moreover, a commercial contractor has a different skill set from that of a residential HVAC contractor. For example, rooftop units, chillers, boilers, and centralized systems. For this reason, the commercial property owners have to pay higher prices than residential owners.
Residential properties, being smaller, need maintenance services once a year. Whereas commercial HVAC systems tend to operate for longer hours and handle heavier usage loads. It increases the need for regular maintenance and monitoring. As a result, commercial properties require more services, often twice a year.
I. Schedule of Services
Things like AC, heating, and ventilation systems need regular maintenance for smooth functioning. Maintenance can increase their lifespans and can save the owner from costly procedures.
The first clause of this template explains the working schedule of the HVAC service provider. The section uses checkboxes throughout that give parties the liberty to set a schedule according to their needs. Initially, you have to select the type of service.
Our template mentions three options: one-time, recurring services, and others.
Secondly, it leaves a blank space to set visit frequency and service days. You can specify it based on mutual agreement.
Lastly, the section requires you to specify working hours.
II. Services Provided
In this clause, write down all the services the HVAC provider will be performing under this agreement. For example, installation, repair, maintenance, ductwork, air quality management, system upgrades, and emergency services for heating, cooling, and ventilation systems. The template has spaces that you can use to specify details about the services.
III. Service of Equipment
This clause of the agreement identifies the specific HVAC systems and equipment covered under the agreement. It requires both parties to list each unit along with key details such as system name, brand, model number, serial number, and location.
This clause states that only the equipment listed in the table will be covered under the scope of this agreement. At the same time, any additions must be added through a written amendment. For example, if a house has 3 AC units and only 2 are listed in the table, then the third one will not receive any service. The contractor is not responsible for it.
If a party wants additional HVAC systems to be maintained other than the ones listed, it should be agreed upon by both parties in writing through a formal amendment.
IV. Client Responsibilities
This clause makes sure that the service provider has secure and unrestricted access to the work areas and equipment required. Moreover, this clause also insists that the client perform routine maintenance tasks such as cleaning air filters between scheduled services.
V. Compensation and Payment Terms
This section is added to guarantee fair compensation for the service provider. Our template allows both parties to choose a payment basis from the four mentioned options and write the agreed amount.
The options include per hour, per fixed fee for the full scope of work, per scheduled visit, and others. In the “Other” section, you can write any payment basis set between both parties, let’s say, bi-weekly.
Next up, the section allows you to select the payment due date and frequency. The parties can select a schedule that fits their situation. Options that are given are: Upon completion of service, monthly, quarterly, annually, and others.
After that, the template gives the flexibility to choose a payment method. It includes cash, check, ACH transfer, and others. Select one that best fits you.
Our clause also discusses late payment terms in detail. It gives two options: “No late fees” and “Late fees apply”. Simply check the box after discussion with your counterpart.
It further allows the contractor to charge a late fee if payment is not received within the time specified as the due date. The fee can be a fixed amount or a percentage of the outstanding balance.
If the client still doesn’t pay, the contract allows the contractor to suspend services until payment is made.
VI. Retainer
A retainer is like an advance you pay to secure a service. Our template allows two options. “No Retainer Required” and “Retainer Required”. Check one that applies.
In case you selected “Retainer required,” the template in detail lists the terms and conditions. It also allows both parties to set a mutually agreed-upon retainer amount. Moreover, it is either refundable or non-refundable. If refundable, the client will receive a refund only when the client cancels within the required notice period.
If you are looking for a standalone retainer agreement, then this template is something to explore for a detailed contract.
VII. Inspection of Services
This clause accepts the right of the client to inspect and approve the contractor’s work before making payment. If the client finds any part of the service to be incomplete or not performed correctly, then they can ask for a redo. The contractor must do it at no additional cost. Here, it’s important to note that the client should point out defects in good faith and should not have the intention of burdening the contractor.
This provision also lets you set a timeline within which the client can object to the services. It must be done through a written notice. If the client doesn’t object within the set time, then it will be seen as if the client is fully satisfied with the contractor’s work.
On the flip side, if the contractor receives a written notice of objection, they must correct it within a set number of business days.
VIII. Workmanship and Warranty
The workmanship and warranty clause sets out warranty terms on the quality of the HVAC contractor’s work. Our template gives two options:
- No warranty
- Limited warranty
If you select no warranty, it means the client can not hold the contractor responsible for any issues that arise after completion.
In case of a limited warranty, the contractor holds some responsibility for their work even after inspection and approval by the client. But it’s only for a specific period of time. During the warranty period, the contractor should resolve issues that are caused by poor workmanship or improper installation. It still doesn’t include normal wear and tear, misuse, etc.
Our template allows both parties to clearly define what type of issues are covered under the warranty and what is excluded.
IX. Preventive Maintenance and Service Log
The clause requires the contractor to provide a written service log of each scheduled visit. The log must record inspections, filter replacement, refrigerant levels, etc. The client should also keep these records safe for warranty and compliance purposes.
You can pair it with our HVAC preventive maintenance checklist.
X. Termination
Termination clause, lists all circumstances under which the contract will be terminated:
- Automatic termination: The type of termination where both parties select a mutually agreed date on which the contract automatically ends without any notice period.
- Upon Completion of service: In this situation, the contract will be terminated after the contractor has been fully paid successfully after approval of services by the client.
- Termination by Client: When the client terminates the contract, they must provide a set number of days’ notice period to the contractor. Even after termination, the client is still responsible for paying for all services that have already been completed.
- Termination by the Contractor: When the contractor terminates the contract by providing a set number of days’ notice period. The contractor, before quitting, must complete any ongoing work, and the client should compensate them for the work done.
- Other: Here you can specify any other term that could result in termination of the contract, such as misconduct.
XI. Independent Contractor
According to clause XI, the service provider is an independent contractor and is not a direct employee, agent, partner, or joint venture of the client.
XII. Taxes
Due to the independent nature of the contract, the providers themselves are responsible for their federal, state, and local-level taxes. This includes income tax, self-employment tax, social security, Medicare tax, and unemployment insurance.
XIII. Emergency Repair Services
This clause helps the parties decide whether emergency HVAC services are included in the contractor’s job or not. The template has two options, i.e., Services included and Services not included.
In case you want to include the services, it means that the contractors will have to take the required steps to respond to emergencies within a set timeframe.
But here it’s important to note that any service acquired after business hours will be considered overtime and must be paid accordingly. It must be agreed upon and authorized in advance.
If you select option b, it means emergency services are not included. The contractor can demand an additional fee for any special request by the client.
XIV. Required Licenses
This clause requires contractors and their assistants, subcontractors, etc., to have all the licenses and certificates required legally to perform HVAC services. For example, an EPA Section 608 Certification or an HVAC Contractor License.
Contractors are responsible for keeping their personnel compliant with all applicable laws throughout the duration of the agreement.
If a license is expired, suspended, or not maintained, the contractor must inform the client. If they want, the work must be stopped immediately. In such scenarios, if a party doesn’t comply, they will face regulatory action from the relevant authorities.
XV. Liability Insurance
This clause has been added to ensure contractors’ safety while working. HVAC service provision is a risky job. The service provider is at risk of personal injury, property damage, bodily harm, or other liabilities. That’s why having insurance is important.
Our template gives blank space to write down the common liability scenarios in HVAC work that insurance will cover.
Other than that, our template gives two choices. One where parties set a minimum coverage amount, and the other where no minimum amount is required.
Additionally, the client has the right to request proof of insurance. It could be in the form of a certificate of insurance to confirm that insurance is active.
XVI. Subcontracting and Assignment
This clause lets both parties decide whether the contractor is allowed to hire subcontractors or transfer their responsibilities under the agreement. Our template gives two choices: Permitted subcontracting and assignment, and Direct performance required. You can select one that applies.
If subcontracting is allowed, it means the contractor can hire other professionals. It’s the responsibility of the contractor to make sure that the subcontractor is qualified, licensed, and insured. The contractor also remains fully responsible for the quality and completion of the work.
But if direct performance is required, then a contractor can’t hire or assign tasks to subcontractors. Any unauthorized step will be treated as a breach of the agreement.
XVII. Background Checks and Security
If the contractor hires subcontractors or assigns tasks to others, it becomes their responsibility to protect the security of the client’s premises. They must do a thorough background check before hiring anyone.
XVIII. Mutual Indemnification
This is a standard clause that is added to protect both parties from legal and financial consequences of the other party’s actions.
It simply means that if one party causes harm, damage, or a legal issue due to negligence, misconduct, or breach of the agreement, they must indemnify, defend, and hold harmless the other party.
You can also use a separate Hold Harmless Agreement template to create a more detailed document.
It means the indemnifying party must cover any losses and make sure that the other party doesn’t suffer because of their action, for example, in the event of property damage, personal injury, etc. These obligations continue even after the agreement ends.
XIX. Environmental Compliance and Refrigerant Handling
This provision holds the contractor responsible for taking care of environmental compliance and refrigerant handling. Contractor must fully comply with all applicable federal, state, and local environmental laws, including the U.S. Environmental Protection Agency (EPA). It also requires them to recycle or dispose of the refrigerants properly.
Moreover, the contractor must have solid proof of proper handling of waste so that it can be presented upon request.
Refrigerant laws (U.S. – federal level)
Refrigerants play an important role in the environment and are dealt with with precise care under US federal law. The Environmental Protection Agency enforces the Clean Air Act (Section 608), which regulates HVAC systems.
According to the Clean Air Act, any technician who handles services, repairs, or disposes of refrigerant-containing equipment must hold an EPA Section 608 certificate. The act also declares it illegal to vent the refrigerants into the atmosphere. Moreover, any system that exceeds the leak threshold (10% leak rate for HVAC) must be repaired promptly. It also requires the contractor to maintain records, for example, refrigerant usage, leak inspections, repairs, and servicing logs.
In case of violation, civil penalties can reach up to $60,000 per violation per day. Real enforcement cases include:
- $195,000 fine for improper refrigerant release
- $400,000+ penalties for leak violations
XX. Equipment and Parts
This section makes sure that any extra costs outside the original scope must be handled transparently. The contractor must inform and seek prior approval from the client before incurring any additional expenses. If any additional expenses are made without the client’s approval, the client will not be obliged to pay for them.
XXI. Modification of Services
This clause is added to protect the provider from unapproved changes in the scope of work. It states that any alteration, modification, or addition to the scope of work must be agreed upon and signed by both parties. For instance, changes in labor requirements, service frequency, equipment specifications, or additional tasks. Any agreed modification will also change the payment amount, service schedule, or other terms of this Agreement.
Additional Common Clauses
Lastly, the template includes standard clauses to help understand how the contract works legally.
Clause XXII is a force majeure clause that states that in an emergency, such as a natural disaster, protests, or government restrictions, parties will not be held liable for not being able to perform their duties. But they must inform the other party of any such circumstances. This temporarily pauses your duties. Moreover, if a situation continues for a longer period, then any party can terminate the contract. However, the client will still have to pay for any services they have already availed.
Clause XXIII outlines a complete roadmap of how a dispute should be handled. The first step is to try to resolve the matter through good-faith efforts. If that fails, both parties should try mediation, but if that still doesn’t resolve the issue, then the final step is arbitration. This approach helps avoid lengthy and costly court proceedings.
No waiver clause XXIV explains that if a party chooses not to enforce a rule at one time, it does not mean they lose the right to enforce it later.
But if both parties want any change in the contract, it must be done in writing. Clause XXV explains the terms of the amendments. According to this clause, the written amendment must be signed by both parties. After that, verbal agreements or informal changes don’t stay relevant.
This Governing Law clause (Clause XXVI) is added to specify which state’s laws will apply to the agreement. Our template leaves a space here for you to write down your state name.
Clause XXVII is a severability clause. It states that if any term, provision, or clause of this agreement is held to be invalid, illegal, or unenforceable by a court, it should be changed, but that doesn’t affect the validity of the entire agreement or other provisions.
The XXVIII clause provides flexibility and allows both parties to include any extra terms that are not already covered in the agreement.
Next up, the entire agreement clause (clause XXIX) confirms the finality of the contract and understanding between the signing parties.
Lastly, both parties sign the contract, which guarantees that they have read, understood, and agreed to all terms.
Once signed, the contract becomes legally enforceable for both parties.
HVAC Maintenance Compliance
HVAC maintenance doesn’t only have practical benefits; in fact, it has close ties to legal obligations in the US, especially for rental properties.
Although there is no specific federal law, multiple legal frameworks require landlords to maintain HVAC systems in their properties. Especially under landlord-tenant law, where most states recognize the clause of implied warranty of habitability. The habitability clause obligates the landlord to provide the tenant/renter with a livable place.
In case the HVAC system is not properly maintained, the property will be considered uninhabitable. This can lead to a tenant withholding rent and multiple requests for repairs, and can even lead to the early termination of the lease.
The Clean Air Act (section 608) also imposes responsibilities related to HVAC systems. As discussed above in detail, this act handles refrigerants and requires proper maintenance of the system according to the environmental standards.
Other than that, many HVAC manufacturers require a proper record of regular maintenance for warranty claims. It includes service records or a maintenance certificate. Without proper records, a claim can be denied.
Additionally, many state and local housing codes demand functional heating and cooling systems. A well-drafted template helps define maintenance responsibilities and acts as a supporting document in managing regular HVAC maintenance.
Sums Up
Our HVAC service contract template is accessible in several file formats for your convenience, including Google Docs for cloud-based sharing, editing, and collaboration, and Microsoft Word for simple offline editing.
Overall, the template is perfect for any HVAC services setup, as it is completely editable and can be tailored to your own needs and specifications.
You can also alter the font size, type, and color to suit your needs and preferences, as well as the headings and text of clauses. Just fill in the appropriate information and let the work begin.
