Annual Maintenance Contracts: Things You Should Know Before You Sign One


It is an agreement with a service provider for the repair and maintenance of equipment (e.g. computers, networking devices, machines) used by your organization.

Annual Maintenance Contract ( AMC) is an agreement with a service provider for repairing and maintaining the property used by the company. It includes the maintenance or repair of any property owned by your company, including servers, access points, and computers or printers you use in your offices. For a company to maintain product and process quality on a daily basis, it should have an IT AMC in place.

Regardless of the device, quality output depends on its long-term repeatability. Regular machine maintenance is necessary to achieve this. To ensure your network or your machines are working properly, you want the best personnel with the most expertise and experience in that field.

AMCs can last up to 10 years, depending on the parties’ agreement. If you want to continue the service, you can extend the term. Typically, AMCs only cover service support; however, comprehensive maintenance contracts (CMCs) cover IT maintenance and replacement.

AMCs are common across many different industries, including healthcare, IT, retail, and even oil and gas. Having an AMC agreement to maintain IT property is a general concept that can be applied to any property. Additionally, most CMCs and AMCs contain similar provisions irrespective of the industry which are as follows:

  • Name and address of both parties
  • Details of devices and services under the contract
  • Number of Site visits
  • Number of remote support or call support
  • Comprehensive type AMC or non-comprehensive type AMC
  • Duration of service
  • Agreed payment
  • Payment terms
  • Terms and Conditions
  • What is not included
  • Contract Termination details
  • Signature and seal
  • Cancellation terms

An IT service provider will receive a maintenance contract cancellation letter if a company wishes to cancel the contract. Once this is signed, it ends the relationship between the parties. It is a professional courtesy for you to explain to the provider why they are not meeting your expectations and/or why you are canceling the AMC before sending this letter.

Comprehensive Maintenance Contract (CMC)

The CMC is usually for a year and can be extended by both parties for one or more additional years if they agree. In addition to repairs, replacements of faulty parts or devices are included in a CMC. The cost of a CMC is higher than that of an AMC since it also includes the cost of replacements.

What can be included in your contract

AMC agreements can be highly specific. For example, you can specify exactly which equipment is to be serviced. Additionally, you can mention that your service providers should bring all their own equipment and materials for the service. Let the IT service provider know if you will, or will not, provide extra manpower when they come for IT support service. It is possible to notify your service provider if one of your devices breaks down so that replacement parts or devices will be available right away. Moreover, you can specify what happens if a breakdown occurs between scheduled service visits and how this will be handled and paid for.

By signing up for an annual maintenance contract, a business and its IT service provider are assured that everything is planned in advance to avoid productivity loss and that if a machine, computer, piece of hardware, or software breaks, the business can be up and running as soon as possible. It helps avoid undue delays resulting in a loss of profits.

You can reach us at if you need maintenance support for your IT infrastructure.