Maintenance Contract in India

A maintenance contract is an agreement between a company and a contractor specifying in detail about the services which are going to be covered and what are the conditions to be considered for the contract to hold ground in any court of law.

A maintenance contractor is usually hired to reduce the costs of a firm/company and to contract out works which require less attention in comparison to other “core” business activities. This approach has some merit depending upon various factors.

Should You Outsource?

Taking cue from Shakespeare’s Hamlet, the phrase ‘To be or not to be’ is what comes to mind. Conventional wisdom says that you should outsource your “non-core” business activities. However, the difficulty is that how do you differentiate your “non-core” business activities from the “core” business activities?

The deeper you dig, better is the possibility of you finding lot many discrepancies which juxtapose on a lot of functionalities. So this requires strategic thinking and brainstorming, no doubt whatsoever!

Outcomes of Strategic Thinking

1. Functions that are of Strategic importance to the company needs to be competitively performed on a continuous basis. This helps the company boost its revenues.
2. Functions that are of Strategic importance to the company, but which are not currently being performed competitively, should not be outsourced. Instead, a better and effective long-term plan is to be envisioned, to make it perform at a competitive cost.
3. Functions that are not of any Strategic importance to the company, and which are not being performed competitively presently should be outsourced.
4. Functions that are not of Strategic importance to the company, but which are being performed competitively with the marketplace is more enticing. Many options are sprung open in this function, including

• Selling the function in the marketplace
• Extending the function to provide services to external customers
• Raising the profile of the function into a source of strategic competitive advantage.

Selecting a good maintenance contractor is not only an uphill task but also, requires you to take a lot of factors into consideration. See to that the hourly rates are agreeable and do some background analysis on the maintenance contractor, how good is the maintenance philosophy from his end, how dependable and steadfast are the workers he provides you to get the job done at your premises, how skilled are they in order to repair or prolong the service life of any machinery or its components at your end. Knowing all of these factors will obviously give you an advantage in getting the best kind of work serviced to you!

Specifications Of A Maintenance Contract

Here are a couple of important  pointers specified for creating a maintenance contract. In accordance with the same, a lot many custom clauses can also be added to the contract suiting individual requirements.

Governing Laws And Jurisdiction

This specifies that the document is bound to follow the laws of a particular nation. In this case, the document adheres to Indian Union Laws and laws within a state or a union territory, under which it’ll be signed. Any disputes encountered shall be legally resolved within the contract’s jurisdiction.

Type Of Agreement

It may be clearly noted that it is not an employer-employee or principal-agent relationship but that of an Independent contractor with a client/company.

Client / Maintenance Contractor Information

This contains information related to the client/ maintenance contractor like name, address, city, state, postal code, phone number and email, including other information like registration details and license number.

Service Description

The nature of work which needs to be carried out has to be meticulously described in the document which the maintenance contractor must adhere to. A detailed description of what service is being provided to the client by the maintenance contractor is to be listed here. The frequency of scheduled checks and maintenance needs to be clearly mentioned with normal business hours and has to be cross-checked with the maintenance contractor. In addition, charges for working beyond the stipulated time limit or during after hours / emergencies can be separately charged. Consumables and spare parts costs can also be levied on the client/company.

Compensation And Incentives

This field should be clearly laid out with the payment schedule.  All of the invoicing and payment terms must be clear to both the parties. The billing must be carried out in a timely fashion, say a monthly billing cycle or upon completion of a previously set milestone. Also, you should be clear about the additional expenses like food, travel, accommodation etc. which is generally borne by the contractor.

Just to increase the productivity of the workers, incentives can be introduced. Incentives can make a contractor deliver more reliably, perform preventive maintenance, scheduled maintenance and plan maintenance regularly. This instills a disciplined approach towards maintaining a system and providing support to it.

Risks And Liabilities

Risk allocation between the two parties forms an important aspect of any contract in question. Disclaimers on representations and warranties must be clearly marked. Contractual obligations giving rise to indemnification should be heavily negotiated with, for it deals with who can be held responsible for certain types of damages incurred by the other party.

Force Majeure

This clause specifies that neither of the parties can be held accountable for any acts of government, lockouts, strikes, public commotions, riots, wars, natural calamities etc. So whatever is beyond reasonable control of man and can’t be prevented or controlled by due and reasonable care, those reasons cannot be attributed to failures on behalf of the parties involved in the legal contract.

Termination Of Contract

Termination of contract can be carried out by the written consent of the two parties involved in the contract. The grounds for termination can be late payment or denial of payment from the client to the maintenance contractor, not adhering to a code of conduct, delays and unsatisfactory work carried out by the maintenance contractor and so on and so forth.

Read And Understood

Both the parties acknowledge that they have read the entire terms and conditions of the contract and that they have fully understood the scope of the contract and that they’re going to abide by it at all times.

In addition to the above fields, one can add a lot more like Reporting, Intellectual Property and Confidentiality, Dispute resolution, Assignment and Subcontracting and so many other clauses in the contract.

Create Your Own Maintenance Contract

A maintenance contract is an assurance and not a source of worry. In this technology-driven world, more tasks can be accomplished online. LegalDesk.com eases the creases in this process by providing various kinds of documents, affidavits and custom online services which can be availed anytime!

You can opt for a document to get printed on Stamp paper and get it delivered using our Print-n-Deliver service at your doorsteps! Simply draft this agreement and we will help you through any issues that prop up to match your specific needs. Do so by placing an order by clicking the button below.