Defining An Installation Agreement
An installation agreement establishes the contractual framework for installing or providing a product. It outlines specific details about the installation, such as what it includes, who is responsible for what, and payment terms. An installation agreement can be a standalone agreement or incorporated into the form contract for a larger scope of work.
These agreements benefit both parties. For the installer, it provides specific details about what is to be done, and may address terms with third parties. For example, the installer may have obligations to a manufacturer or licensor supplying equipment either in addition to or in lieu of the general installation agreement. For the customer , it gives the customer a full understanding of what is included in the price of the product and provides a framework for evaluating any extras. It can also include information concerning modifications to drawings, and who will be responsible for installing according to the drawings.
Installers often use installation agreements when the installation work is outsourced to another company, such as a subcontractor or a supplier. In these circumstances, it is critical for the installer to memorialize what it is expected to do and, in many cases, to transfer liability to others.
Essential Components of an Installation Agreement
The installation agreement should include the scope of work to be done, including a description of the type of alterations done to the property and what is included in that process (moving things in and out, physically altering things such as moving walls or running pipes, etc.). This section should include a description of the type of materials that will be used and whether or not those materials will be produced by the installer or contractor. Additionally, the installation agreement should establish a time frame for the work to be done and when it will end. There should also be a payment schedule in the installation agreement and when the payments are due. If the company is going to begin the work before the entire contract is paid for, this must be established so that the installation itself does not begin to cost extra to the property owner, as the installers are sometimes known for doing.
Tailoring Your Installation Agreement Template
A generic template can serve as a good starting point for an installation agreement, but it’s important to remember that this document should be modified to fit the specific needs of your project and your client. It is especially crucial for a provider to customize an installation agreement if they are entering into a long-term agreement with the customer or if you are a vendor providing services to a company in Mexico. If you work for an established nationwide company, your corporate parent may already have a comprehensive form they want you to use, if not you can check out the sound sample shown above when first creating or re-evaluating your installation templates.
A provider should not sign any installation agreement without being sure that this contract meets its specific requirements. Even otherwise particularly loyal clients will appreciate the fact that you were diligent in making sure the agreement covered areas that were important to you. Modifying the agreement will also allow you to bring up points that you may have missed otherwise. You won’t have the template sitting in front of you reminding you of those provisions that are important to you because there are important to the company’s home office or other subsidiaries, so the time spent customizing the contract is time well spent. In addition to some of these general requirements, you should include project-specific project information, details on the product you are using and special instructions provided by the client to complete the project.
Installation Agreement: Legal Aspects
When it comes to installation agreements, there are a number of legal considerations to take into account. The first consideration is liability. In any installation agreement, there should be a well-written clause that captures the liabilities of each party. This clause should state the limits of liability for both the installer and the business. As is always the case in contract drafting, these liability limitations should be reasonable and fair to both parties. For example, there is no reason that an air conditioning dealer should be liable for damages caused by a faulty air conditioning installation that exceed the purchase price of the product.
Another important consideration is what types of dispute resolution mechanisms are in place as to any controversies that arise out of the installation agreement. For example, some agreements have mandatory arbitration clauses to settle any disputes that are not otherwise resolved between the parties. Arbitration is typical, but often more costly than the parties or better suited to the type of work that is contemplated by the agreement. For example, where work is done in phases and the installation is not yet complete, the parties may wish to consider other mechanisms for resolving disputes such as binding mediation. Binding mediation is a process whereby the parties have to agree to settle on the outcome at least somewhat in advance of the mediation. In binding arbitration, the parties have to agree to a settlement.
The final consideration in developing an installation agreement is what happens if the installation does not go well. What are the conditions of a termination? When can it occur? What remedies are available? These are a critical part of any installation agreement.
Typical Errors to Evade
There are several common pitfalls when creating installation agreement templates that can be easily avoided. Below are some of the most frequently encountered issues along with suggestions on how to navigate around them.
Failing to Obtain a Valid, Fully Executed Installation Agreement
Before commencing any project, obtaining the properly executed installation agreement is key to ensure payment for the products sold. Even in circumstances where a buyer has paid a deposit, securing a written installation agreement before commencing work is critical. Courts do not accept verbal agreements in the construction context and will refuse payment to those seeking to enforce such agreements because of their failure to secure a written contract.
Even when a signed installation agreement is obtained, be sure to have the buyer sign at the bottom of the document. Any spaces or lines left blank could result in a vacant line being filled, prior to the execution of the agreement, by an unflattering clause that could result in a loss of revenue for your business . Thus, be sure that the spaces and lines are filled in, with the signature at the bottom, to avoid any confusion as to the agreed terms.
Changing Terms After Presentation
After presentation of an installation agreement, before signature, changing or altering the terms even verbally may be deemed a counter-offer rather than an assent to the previously presented terms. If the buyer proposes terms that are more favorable to your business, be sure to document these changes in a writing that is signed by both parties. Verbal assent to the changes is inadvisable, as the court may find that such acceptance was never made.
Failing to Include Provision Regarding Disputes in Installation Agreement
Be sure that not only is a provision including the manner of arbitration contained in the installation agreement, but also include the manner of acceptance of the change to the installation agreement. As discussed above, if the terms are agreed to verbally but there is no written confirmation of the change, then the court is likely to find that there was no accepted modification.
Advantages of Implementing a Template
A professionally drafted installation agreement template will embody the legal best practices, and it will minimize the likelihood that an installation professional will fall into any typical traps of liability by inserting and crafting the schedule and other terms on their own.
Taking advantage of a professionally designed stream-lined agreement for all your installs is going to save you money in the long run. You can synchronize the many different elements of your installation business without having to re-do the same drafts repeatedly for each install. Remember: contracts are for the benefit of the person drafting them, and when a contactor is drafting it, the contract should be drafted for the contractor’s benefit (not the customer’s). But aside from that, it is time consuming and costly to re-draft the same agreement for multiple different installations. So the time savings alone for using a template, in and of itself, is compelling.
It just simply looks so much better and more professional when contracts and schedules are on a standardized template with consistent headings and formatting. It sends the message that the installer is organized and that they are running a well regulated business.
Viewpoints to Consider When Selecting a Template
Due to the wide variety of installation services offered by contractors and the varying needs of both contractors and customers, it is especially important to select an installation agreement template that best suits everyone’s needs. For example, if your installation services often require several subcontractors, choose a template with detailed terms on indemnities and insurance. If your services are generally simple, with little equipment and few special components to the work, select a template with basic legal protection. Also, consequently, if your equipment and particular installation tools often are of high value, consider a template with terms that reflect and protect your assets.
Another consideration with regard to a template’s value is having one that allows for modification. Although a solid, enforceable installation agreement template should include all of the necessary clauses, no template will apply equally to every situation . Therefore, it is wise to have a template that can easily be customized to suit your specific needs and the specifics of each particular installation service. For example, if certain installations require unusual terms on warranties, insurance, retention, or contingencies, a template that already has these clauses saves you time and effort, compared with a template that does not.
Finally, another aspect to consider in selecting an installation agreement template is the ordering process. A template written by a professional attorney will likely be well-written, but it also should be presented in a professional manner. Ideally, the template should be available for immediate download or editing so that you may customize it for your next installation service without unnecessary expense or delays.