Service contract: definition, example, and why it matters

Best practice for any job over $500. Should include scope, price, payment terms, change-order process, warranty, and termination clauses. A signed quote can serve as a contract.

• Short definition. A written agreement defining the work, price, and terms between two parties.
• Category. Service contract is a legal term used by service businesses when billing customers.
• How Glo Invoice handles it. Glo Invoice builds service contract into the invoice itself, so you don't track it on paper or in a spreadsheet.

Frequently asked questions

What does service contract mean?

Best practice for any job over $500. Should include scope, price, payment terms, change-order process, warranty, and termination clauses. A signed quote can serve as a contract.

Related terms

• Quote — A fixed-price offer to perform a job that, once accepted, is binding.
• Scope of work — The written description of exactly what work is included in a job.
• Change order — A signed addendum modifying the price, scope, or schedule of an existing job.