What is ANNUAL MAINTENANCE CONTRACTS?
An Annual Maintenance Contract is an agreement between a service provider and a client for the maintenance of a product or service typically for a period of 1(One) Year. It ensures that the service provider will perform maintenance, repair, or replace equipment or products sold to the customer. Two major types of AMCs are
Comprehensive AMC - It covers labour, spare parts and transportation costs
Non Comprehensive AMC - It covers only the maintenance services and labour costs
Comprehensive maintenance contract (CMC) covers any additional spare parts, labour, or transportation costs that come up while servicing those products.
- CMCs are typically good for a year after signing, but occasionally, both parties agree to extend the range up to between three and five years.
- To get maximum coverage, many businesses will choose CMCs over AMCs, though AMCs require less commitment on the service provider side.
A non-comprehensive agreement will only cover the services themselves and any other expenses that might come up during the process are the business’s responsibility.
- Given this breadth of coverage, comprehensive contracts often cost more than an AMC would.
- To get maximum coverage, many businesses will choose CMCs over AMCs, though AMCs require less commitment on the service provider side.
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