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 addresses the many needs listed above, Additionally, a maintenance agreement can span across multiple industries. For example, 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. A maintenance contract agreement sets the expectations, timeline, requirements, price, and what is not included in the contract. The two invested parties usually negotiate the annual maintenance contract rules. Then, they finalize it with a maintenance contract form.
Initially, it is 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. A business can only understand what they are agreeing to when they fully read and understand the contract. Ask your lawyer to read the contract before it is signed if you need help.
Generally, you need a maintenance contract cancellation letter to end an agreement. This document officially ends the relationship between the two parties. Before sending one of these letters, allow the customer to tell you how their expectations are not being met. By doing this, you are being professionally courteous. If the problem persists, you can formally close the agreement 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. You can find Lisa often “putting out fires” as the founder of her business.
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.
When this customer cancelled his services, it surprised her. This was because he never spoke to her about 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. She can provide this by hiring a part time college student. This person will provide the custom service that many other companies, especially mass market companies, can not.
As a result, 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, then she can receive the referrals that her company can convert to customers. Over time, this will create the success she deserves.