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A service contract, also known as a maintenance contract, is a legally binding agreement between a business and a third-party service provider. It outlines the specific maintenance, repair and inspection services the provider will deliver for a fixed period of time and at an agreed-upon cost. These contracts are essential for tasks your in-house team may not have the resources, specialized skills or time to perform, like HVAC system overhauls, fire suppression system inspections or elevator maintenance.

Service contracts bring predictability and accountability to your maintenance operations. They ensure that critical assets receive regular, professional attention, reducing the risk of unexpected breakdowns. For facility and maintenance managers, these agreements provide peace of mind by guaranteeing a specific level of service and a fixed budget, eliminating the uncertainty and high costs of emergency, ad-hoc repairs. They also hold external vendors accountable to a set of pre-defined terms and service-level agreements (SLAs).

A well-written service contract should be detailed and leave no room for ambiguity. It should clearly define:

• The scope of work: A detailed list of the specific tasks, inspections and repairs to be performed on each asset.
• Service level agreements (SLAs): Metrics that define the quality of service, such as response times for emergency repairs or guaranteed uptime.
• Costs and payment terms: A breakdown of all fees, including labor, parts and travel as well as the payment schedule.
• Term and renewal: The start and end dates of the contract and the process for renewal.
• Termination clause: The conditions under which either party can legally terminate the agreement.