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Equipment Maintenance Agreement

Machinery and Equipment form the backbone of every organisation. Manufacturing industries depend on machines for their operations. Even in many service industries, there is heavy dependence on equipments; for instance, cars in taxi industry, computers in IT industry to name a few. Maintenance of such equipments need to be carried out meticulously to ensure optimal production and reduction in wastage of inputs. All organisations that use machinery and equipments need to have detailed arrangements with service providers for timely maintenance works of such equipments.


What Is An Equipment Maintenance Agreement?

An equipment maintenance agreement is a legal document signed between a business entity and a contractor. The business may be referred to as the owner in the agreement. Such an agreement sets forth the details of the agreement along with the terms and conditions to be followed by the parties. It is important to have an agreement signed in order to limit the rights and obligations of the parties. It is also of importance to decide the scope of the services to be performed by the contractor.

What To Include In An Equipment Maintenance Agreement?

An effective Equipment Maintenance Agreement shall be drafted carefully such that no vital detail is missed. Basic details about the parties, particulars about the terms and conditions, pricing and methods of payment; methods of termination and dispute related measures shall all be detailed well. Let us observe the individual breakups of important points.


In an Equipment Maintenance Agreement, the first party who engages a contractor can be referred to as the client. The second party can be called The Contractor. Include descriptions of their individual businesses along with registered offices. Such details can be of immense use in the event of disputes.


The factors that led to the creation of the agreement including the requirement faced by the client. Mention the related service offered by the contractor that led to the creation of the agreement. In many cases, the contractors are usually the sellers of such machinery who also undertake to provide maintenance services.


Only the legal owner of the assets has authority to sign an agreement for maintenance with a third party. If the client is not the owner, it should be mentioned along with details of the authorisation received from the legal owner.

Scope Of Service

The details of the services to be provided by the contractor should be specified, covering individual tasks. Primarily, it is the maintenance of equipment in good working condition. The maintenance works should include periodic inspections in a detailed manner. Once any faults are identified, the repairs need to be carried out and parts replaced wherever necessary. There should also be provisions for emergency repairs when any equipment becomes faulty.


The contractor should possess valid license to carry out the works specified in the agreement. All labour law requirements shall also be complied with by the contractor and the client may be given a right to verify the licence of the contractor.

Obligations Of The Contractor

The Contractor usually covenants to perform the following tasks

  1. To inspect and repair all the equipment and machinery detailed in the agreement on a regular basis. Such repairs should be conforming to the original maintenance manual supplied by the manufacturer for each specific component of equipment.
  2. To ensure that only well trained and certified individuals are sent for maintenance works. The client can insist that such personnel be trained either by the original manufacturing company or by a reputed technical institute.
  3. To respond promptly to the requests of the client whenever the need for emergency repairs arise. The hours within which repairs should be carried out can also be mentioned.
  4. To ensure that the personnel sent for repairs are legally eligible to work and and that all statutory benefits including minimal wages are provided to them.


The payment details for the agreement should be mentioned clearly. It may be divided into a monthly cycle for regular servicing in addition to emergency repairs that may require additional billing.

A detailed price list of individual repair tasks along with spare part prices should be made available to the client. The client may be required to make such purchases from the contractor only. The maximum period should also be specified for making payments for the bills submitted.

Other Details

Details can be included about the duration of the agreement, and the ways in which it may be terminated. The remedies available to the parties on breach should be mentioned as well. It is also important to mention the jurisdiction of the courts where disputes shall lie.

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