Which statement best describes a service contract?

A service contract is primarily understood as a commitment made by a provider to perform maintenance and repair services on goods—often for an additional fee. This contract assures the consumer that, should anything go wrong with the product, the provider is responsible for resolving the issue through repairs or replacements.

This definition emphasizes the protective nature of the agreement, which is designed to enhance the value of a product by ensuring continued functionality. Such contracts are common in various industries, especially in the context of electronics and appliances, where issues may arise after the point of sale.

In contrast, other options do not encapsulate the essence of a service contract. For instance, financial agreements primarily relate to monetary exchanges or fiscal arrangements, while guarantees of customer service do not necessarily involve payment for specific repairs and maintenance. Finally, agreements to sell goods in bulk pertain to wholesale transactions, which are separate from the personalized service or maintenance commitments defined in a service contract.