What is Annual Maintenance Contract (AMC)

What is Annual Maintenance Contract (AMC) – When you buy a technical product, after sales service is something that plays the decisive role in your purchase behavior. As it is an open secret that value of every product depreciates after its purchase and consistent use is something that takes the toll on the life of such products. Here, annual maintenance contact keeps the condition of product in perfect condition.  Whether you have bought a product solely for your use at home or for office, you might not have the necessary technical skill to keeps the machine in smooth running condition.

What is AMC (Annual Maintenance Contract)

Important factors about Annual Maintenance Contact

Let’s know about the things that an annual maintenance contract giver considers before he takes up assignment of annual maintenance contact.

Condition of the product– Whether you have bought a refrigerator or a machine, contract undertaker would properly assess the condition of the machine. The terms and conditions of the contract would depend on the age of the machine or product.  The undertaker of the annual maintenance contract would always give important to the fact condition of the product is serviceable.

Period for Annual Maintenance Contract- Normally, the period of contact is for 1 year.

Downtime for maintenance–  If you are highly dependent on the machine and you use it frequently, the annual maintenance contract giver would make it clear about the downtime for maintenance. As the buyer of the maintenance contract, you would keep enough stock of  spare parts and other materials to avoid delay in service.

Clause about minimum visits of service engineer– The agreement would contain the clause about minimum visits of service engineer in a year.

Terms and conditions about replacement of spare parts- Spare parts are important for rendering after sales service in an annual maintenance contract. It needs to stay in writing about the serviceable spare parts and clause about who would bear the cost of spare-parts in case of breakdown of machinery. Usually, owner of the machine would take up the cost of spare parts, which would become necessary for rendering the service.

Intimation of change of address–  As the owner of the product, you would properly intimate your change in address to the company giving annual maintenance contract.

Clarity about repeated visits– The annual maintenance contract giver would make it clear that whether you would bear the cost of charges for extra visits of service engineer.

Do terms and conditions in AMC differ? – It depends on the type of machinery for which the AMC is taking place. If the product demands frequent servicing, the charges for annual maintenance contract would naturally differ. In case of high cost machinery, the AMC would even include the cost of spare parts and visiting charges of engineer for every visit.

What would AMC of a product contain?

The AMC would contain the following things;

  1. The Scope of work
  2. Responsibilities of customer
  3. Terms and conditions
  4. Price of the contract
  5. Inclusion of extra facts
  6. Terms and conditions for payment
  7. Period of AMC and Validity
  8. Name of service head with numbers.