The words that decide who pays.
Service contracts turn on a dozen terms that are rarely defined where you need them. These are the ones worth knowing before you approve an invoice.
- Parts-only coverage
The vendor supplies the failed component free, but bills you for the labour to fit it.
Under a parts-only plan the contract covers the physical component and nothing else. The technician's time is billed at the contract labour rate, which on a major repair is usually the larger half of the invoice. A $1,250 compressor replacement can arrive as a $0 part and four billable hours. Check the rate schedule as carefully as the parts list.
- Parts and labour coverage
Both the component and the time to fit it are covered by the contract.
The most common mid-tier plan, and the one where incorrect billing shows up most often — a labour line on a covered repair looks entirely routine, so it gets approved without anyone checking the plan. If a repair is covered for parts and labour, the diagnostic time spent finding the fault is usually covered too, not billable separately.
See also parts-only coverage, diagnostic fee
- Covered equipment schedule
The list of specific units, by model and serial number, that the contract applies to.
Contracts cover named machines, not kitchens. The schedule is usually an appendix near the back listing each unit by model and serial. If the serial on the invoice is not on that schedule, the repair may be genuinely uncovered even though an identical unit three feet away is covered. This is worth checking first, because it settles the entire invoice in one step.
See also term
- Exclusion
A named circumstance where the contract gives coverage back.
Exclusions are typically a numbered list, and a handful account for most declined claims: consumables and wear items, misuse or operator error, lack of documented maintenance, damage from external causes, and refrigerant loss without a located leak. An exclusion only bites if something triggers it, and what triggers it is almost always the technician's service report — which is why obtaining that report matters as much as reading the contract.
See also service report, consumables and wear items
- Service report
The technician's written account of what failed and why.
The single most consequential document in a coverage dispute, and the one most often missing. It is what turns "compressor failure" into either a covered claim or an excluded one, because exclusions are written in terms of cause. If the vendor has not supplied one, requesting it is a reasonable message on its own and frequently resolves the question before any dispute is needed.
See also exclusion
- Contract labour rate
The hourly rate the contract fixes for technician time, often varying by time of day.
Most contracts fix separate rates for standard hours, evenings, weekends and holidays. Rate drift — the contract says $125 an hour, the invoice says $145 — is the quietest form of overbilling because the line looks correct in every other respect, and the same $20 recurs on every invoice for the life of the agreement. Before raising it, check the service time: a rate that looks wrong may be the correct after-hours rate.
See also parts-only coverage, callout or trip fee
- Callout or trip fee
A charge for attending the site, distinct from the labour billed once there.
A contract will often promise a response time — four hours, next business day — without anywhere authorising a fee for meeting it. The promise is an obligation on the vendor, not permission to charge. If a callout fee appears, look for a clause that specifically allows it, and check whether the rate schedule already includes an after-hours rate covering the same thing.
See also response time commitment, contract labour rate
- Response time commitment
How quickly the vendor undertakes to attend after a fault is reported.
A service level the vendor owes you, commonly four hours for emergencies or next business day for routine calls. It is easily misread as justifying an emergency surcharge; it does the opposite, since the fast response is something you have already paid for in the premium.
See also callout or trip fee
- Deductible
A fixed amount you pay per incident before coverage applies.
Common on extended warranties and less so on annual maintenance contracts. Worth checking whether the deductible is per incident or per visit — a fault requiring two visits should normally attract one deductible, not two, and being billed twice for a single underlying failure is worth questioning.
See also term
- Consumables and wear items
Parts expected to be replaced routinely, usually excluded even under full coverage.
Gaskets, filters, light bulbs, door seals and belts. Because they wear out through normal use rather than failing, most contracts exclude them at every coverage level. A gasket billed on an otherwise covered repair is usually correct — knowing that saves an unnecessary dispute.
See also exclusion
- Diagnostic fee
A charge for determining the cause of a fault, separate from repairing it.
Where a plan covers parts and labour for a failure, the time spent diagnosing that failure is usually part of the covered labour. Billing diagnosis separately and then billing the repair as covered charges you for half of a job the contract already pays for.
See also parts and labour coverage
- Term
The dates between which the contract is in force.
The first thing to check on any invoice, because it settles everything downstream: there is no point arguing about whether a compressor is covered if the service date fell two months after the contract expired. Watch for coverage that runs from installation rather than from purchase, which can differ by months on equipment that sat in a warehouse.
See also covered equipment schedule