Maintenance Contract

See Also:
Progress Billing for a General Contractor
Completed Contract Method
Covenant Definition of a Bond Contract
How to Maintain an effective Job Schedule
Accounting Cycle

Maintenance Contract Definition

A maintenance contract, defined as the contract between 2 parties which creates the agreement that one party will maintain an asset owned by another party, is common across many industries. Maintenance contracts can exist for equipment, a building, landscape, computers and other information technologies, and more.

Maintenance Contract Explanation

A maintenance contract, explained as an agreement which supports many service businesses, is simply an agreement to maintain something. This can expand across the many needs listed above, Additionally, a maintenance agreement can span across industries: manufacturing has equipment which needs to be maintained just as much as healthcare, IT, retail, and more. A maintenance contract signifies the agreement to maintain anything and is somewhat of a general concept.

Common parts of a maintenance contract span across all needs. To begin the process, a maintenance contract agreement sets the expectations, timeline, requirements, price, and what is not included in the contract. Also known as the annual maintenance contract rules, these terms are usually negotiated by the two invested parties and is then finalized with a maintenance contract form.

These are initially presented in the form of a maintenance contract proposal. This, the initial document, is similar to a proforma invoice. It is merely a quote. After negotiation the final agreement is made official with a contractual document.

One will want to pay special attention to the maintenance contract terms and conditions. Through these, agreements may be made which were not necessarily agreed upon. Only by fully reading and understanding the contract can a business understand what they are agreeing to. If further help is needed it is recommended that a lawyer reads the contract before it is signed.

Generally, to end the agreement a maintenance contract cancellation letter is needed. This document officially ends the relationship between the two parties. Professional courtesy dictates that before one of these letters is sent the customer will inform the vendor of how their expectations are not being met. If the problem persists, the agreement can be formally closed with a cancellation letter.

Maintenance Contract Example

Lisa is the owner of a property maintenance firm. Following in her father’s footsteps, she works diligently to maintain the apartments and other real estate properties which have created her livelihood. As part of her work as the founder of her business, Lisa is often found “putting out fires”.

Lisa has no small task ahead of her. In fact, she has a large one. She must convince one of her customers who recently cancelled service to send her a maintenance contract renewal letter. As the owner of her business, she is the head saleswoman and customer service representative.

She was surprised that this customer has cancelled service because he has never spoken of any issues. Upon speaking with him, she realizes that he has found a better price. She must start negotiating quick before she looses this account.

Instead of creating a price war she relies on her ability to satisfy her customers. She agrees, with the customer, to have a single associate dedicated to his account. By simply hiring a part time college student who is given a work cell phone she can provide this. This person will provide the custom service that many other companies, especially mass market companies, can not.

Lisa is able to keep the client she was trying to save. She is thankful that she was able to meet his needs. If she creates positive word of mouth she can receive the referrals that her company can convert to customers. Over time, this will create the success she deserves.

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