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Operations and Maintenance Agreement

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OPERATIONS AND MAINTENANCE AGREEMENT

This Operations and Maintenance Agreement (the "Agreement") is entered into by and between:

Service Provider Name:

Service Provider Address:

Client Name:

Client Address:

RECITALS

WHEREAS, Service Provider possesses expertise, personnel, equipment and licenses necessary to perform operations, maintenance, repair and related services for the Client's facilities and equipment; and

WHEREAS, Client desires to retain Service Provider to perform operations and maintenance services at the locations set forth in this Agreement under the terms and conditions contained herein; and

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the parties agree as follows:

SCOPE OF WORK

The scope shall include routine operations, preventive maintenance, corrective repairs, emergency response, spare parts management where applicable, maintenance recordkeeping, and coordination with third-party contractors as required to maintain safe and reliable operation of the equipment and facilities described above.

PERFORMANCE STANDARDS; WORK SCHEDULE

Service Provider shall perform all work in a professional manner consistent with industry standards for similar facilities and equipment. Response time for emergency calls shall not exceed . Routine maintenance shall be scheduled in accordance with an agreed maintenance plan and minimized to avoid disruption of Client operations.

PAYMENT TERMS

Invoices shall be submitted by Service Provider to Client in accordance with the Payment Schedule. Unless otherwise agreed in writing, Client shall pay undisputed amounts within calendar days of receipt of invoice. Late payments shall accrue interest at the rate of per month, or the maximum lawful rate, whichever is less.

TERM AND TERMINATION

This Agreement shall commence on Start Date: and shall continue in full force until End Date: , unless earlier terminated pursuant to this section.

Either party may terminate this Agreement for convenience upon written notice delivered at least days prior to the effective termination date. Either party may terminate for material breach if the breaching party fails to cure the breach within thirty (30) days after receipt of written notice specifying the breach; provided that for breaches that cannot reasonably be cured within thirty (30) days, the breaching party shall have such additional time as is reasonably necessary if cure is commenced within the initial thirty (30) day period and diligently pursued to completion.

CONFIDENTIALITY

Each party shall protect the other's confidential information and shall not disclose such information to any third party except as necessary to perform this Agreement or as required by law. Confidential information includes non-public technical, financial, and business information, but does not include information that is or becomes publicly available through no fault of the receiving party, was already known to the receiving party without restriction, or is rightfully received from a third party without obligation of confidentiality. The receiving party shall use at least the same degree of care to protect confidential information as it uses to protect its own confidential information, but in no event less than reasonable care. The obligations of confidentiality shall survive termination of this Agreement for a period of three (3) years, except that trade secrets shall remain protected for so long as they qualify as trade secrets under applicable law.

INSURANCE; INDEMNIFICATION

Service Provider shall maintain insurance coverages customary for the services provided, including commercial general liability, workers' compensation, and automobile liability, with limits sufficient to cover claims arising from the performance of this Agreement. Upon request, Service Provider shall provide certificates of insurance evidencing such coverage.

To the fullest extent permitted by law, Service Provider shall indemnify, defend and hold harmless Client and its officers, directors, employees and agents from and against any and all claims, liabilities, damages, losses and expenses (including reasonable attorneys' fees) arising out of or resulting from Service Provider's negligent acts, errors or omissions, willful misconduct or breach of this Agreement, except to the extent caused by Client's negligence or willful misconduct.

ACCESS, PERMITS AND COMPLIANCE

Client shall provide Service Provider reasonable access to facilities and equipment and shall obtain any necessary consents, permits or easements required for Service Provider to perform services. Service Provider shall comply with all applicable laws, regulations and codes in performing the services under this Agreement.

CHANGE ORDERS; SUBCONTRACTING

Changes to the scope, schedule or compensation shall be made only by written change order signed by authorized representatives of both parties. Service Provider may engage subcontractors to perform portions of the work provided that Service Provider remains fully responsible for subcontractor performance and compliance with this Agreement.

RECORDS; AUDITS

Service Provider shall maintain complete and accurate records of services performed, parts used, hours worked and invoices. Client shall have the right to audit such records during normal business hours upon reasonable prior notice. Service Provider shall retain records for a period of three (3) years following the date of the applicable service.

LIMITATION OF LIABILITY; FORCE MAJEURE

Except for liability arising from willful misconduct or gross negligence, in no event shall either party be liable to the other for consequential, incidental, special or punitive damages. The aggregate liability of a party for claims arising under this Agreement shall be limited to direct damages not to exceed one times the total fees paid or payable to Service Provider under this Agreement in the twelve (12) months preceding the claim.

Neither party shall be liable for delays or failures in performance resulting from causes beyond its reasonable control, including acts of God, acts of government, strikes, epidemics, floods, fires, or transportation interruptions, provided the affected party gives prompt notice and uses reasonable efforts to resume performance.

ASSIGNMENT

Neither party may assign this Agreement or any rights hereunder without the prior written consent of the other party, except that either party may assign to an affiliate or in connection with a sale of substantially all of its assets or business to which this Agreement relates, provided that the assignee assumes all obligations under this Agreement.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflict of law rules.

ENTIRE AGREEMENT

This Agreement, including any exhibits and executed change orders, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and representations, whether written or oral. Any amendment to this Agreement must be in writing and signed by authorized representatives of both parties.

NOTICES

MISCELLANEOUS

If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect. Headings are for convenience only and shall not affect interpretation.

Service Provider:

Party Label:

By:

Date:

Client:

Party Label:

By:

Date:

Enter text✕

What an Operations and Maintenance Agreement Covers

An Operations and Maintenance Agreement (O&M Agreement) is a contract that defines ongoing operational duties and maintenance responsibilities for equipment, facilities, or systems between an owner and a service provider. It specifies the scope of services, performance standards, response and repair times, preventive maintenance schedules, spare parts and warranties, reporting obligations, pricing and payment terms, liability allocation, insurance requirements, contract term and termination procedures, and attachments such as exhibits, schedules, and service level agreements. These agreements are common in real estate, healthcare, construction, and industrial services.

Why a Clear O&M Agreement Matters

A well-drafted Operations and Maintenance Agreement clarifies responsibilities, sets measurable performance benchmarks, reduces downtime through scheduled upkeep, limits disputes with defined remedies, and allocates costs and risk. Clear terms preserve warranties, control operating expenses, and provide predictable service delivery throughout the contract term.

Why a Clear O&M Agreement Matters

Who Typically Uses an O&M Agreement

Typical users and signers include facility owners, maintenance contractors, property managers, and equipment vendors, as well as in-house engineering teams.

  • Facility owners who retain asset responsibility and contract out maintenance management.
  • Maintenance contractors managing scheduled and emergency repairs for third-party clients.
  • Property managers coordinating vendors, tenant communications, and compliance oversight programs.

Lenders, insurers, and regulatory compliance teams also review these agreements to confirm service levels and risk allocation.

Step-by-step: Preparing and Executing the Agreement

Follow these steps to prepare, complete, and execute an Operations and Maintenance Agreement accurately and legally.

  • 01
    Gather Details: Collect party names, asset lists, locations, and contract term.
  • 02
    Define Scope: Specify services, preventive tasks, repair obligations, and exclusions.
  • 03
    Set SLAs: Establish response times, uptime targets, and measurable KPIs.
  • 04
    Finalize Signatures: Confirm authorized signatories, dates, and witness or notary needs.

Six essential components to include

A complete Operations and Maintenance Agreement combines several core sections to manage expectations, performance, and legal exposure across the contract lifecycle.

Scope of Services

List covered equipment, routine and emergency tasks, service frequencies, exclusions, and the process for approved change orders to avoid scope disputes.

Service Levels

Define response times, resolution targets, uptime thresholds, measurement methods, and financial remedies or service credits for missed targets to enforce performance.

Pricing & Payment

Specify fixed fees, time-and-materials rates, billing cycles, invoicing requirements, tax responsibilities, and mechanisms for price adjustments or additional work.

Term & Termination

State initial term, renewal mechanics, notice periods, termination for cause or convenience, cure periods, and post-termination obligations including asset handover.

Liability & Insurance

Allocate liability limits, indemnity obligations, required insurance coverages, and any caps on consequential damages, consistent with applicable state law.

Reporting & Records

Set required inspection reports, maintenance logs, audit rights, evidence of completed work, and retention schedules for service records and performance data.

Security and compliance considerations

Encryption in transit: TLS 1.2/1.3
Encryption at rest: AES-256 encryption at rest
Certifications: SOC 2 Type II, ISO 27001
HIPAA readiness: HIPAA compliant with BAA available
ESIGN/UETA: Compliant with ESIGN and UETA
21 CFR Part 11: Supports FDA electronic records requirements

Consequences of poorly drafted or incorrect agreements

Service interruptions: Operational downtime and revenue loss
Warranty voidance: Improper maintenance may void warranty
Regulatory fines: Noncompliance with safety rules
Contract disputes: Litigation and damages
Increased costs: Emergency repairs and penalties
Reputational harm: Customer trust damage

Common preparation errors to avoid

  • Unclear scope wording leading to disagreements over whether specific tasks are included or excluded, often resulting in costly change orders and service disputes.
  • Missing or vague SLAs that fail to define response times, uptime metrics, remedies, or measurement methods, making enforcement difficult during performance issues.
  • Inadequate authority verification for signers, where individuals sign without corporate approval or POAs, risking contract voidability and third-party challenge.
  • Failure to document preventive maintenance schedules and parts procurement terms, producing unexpected downtime, supply delays, and disputes over responsibility.

How the agreement lifecycle typically proceeds

The typical flow from drafting to continuous maintenance and recordkeeping is summarized here to guide process design and approvals.

  • Draft: Prepare agreement, exhibits, and service schedules.
  • Negotiate: Revise scope, SLAs, and pricing until agreed.
  • Execute: Obtain signatures, notarization if required, and countersigns.
  • Operate: Begin maintenance, record activities, and report per contract.

Digital workflow settings for online completion

Configure signing flow, authentication strength, notifications, storage, and integrations to support secure electronic execution and auditability.

Field Configuration
Signature Flow Sequential or parallel signing
Authentication Email, SMS code, or advanced ID verification
Notifications Automated reminders and delivery receipts
Storage Location Encrypted cloud storage or on-prem archive

Technical requirements for e-signing and storage

Select platforms and file formats that support secure e-signing, audit trails, and compliance with contract retention policies across devices.

  • Browser Support: Modern browsers and mobile apps
  • Integrations: Salesforce, NetSuite, Google Workspace
  • File Types: PDF, DOCX, and HTML supported

Key dates and recurring timelines to track

Identify and calendar effective dates, inspection windows, maintenance intervals, response deadlines, and renewal notice periods to avoid missed obligations.

Effective Date and Commencement:

Service begins on the effective date specified in MM/DD/YYYY.

Initial Acceptance Period:

Timeframe to inspect and accept initial handover work.

Maintenance Intervals:

Scheduled preventive maintenance frequency (monthly, quarterly).

Response Time Commitments:

Maximum response time for emergencies in hours.

Renewal and Notice Periods:

Notice window for renewal or nonrenewal obligations.

Major milestones from contract to first service cycle

A sequential milestone view helps plan resources and confirm contractual handoffs from signing through initial operations.

01

Contract Drafting

Complete draft, attach exhibits, and circulate for review.

02

Execution

Authorized signatories sign, notarize if required, and exchange copies.

03

Handover & Commissioning

Provider completes initial commissioning and owner acceptance tests.

04

First Maintenance Cycle

Begin scheduled maintenance and submit first performance report.

Baseline pricing and feature comparison for e-signature vendors

Comparison of common e-signature vendors and baseline features relevant to executing Operations and Maintenance Agreements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial, no credit card required Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes (Business Premium) Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Frequently asked questions about execution and enforceability

Answers to common questions about execution, enforceability, and electronic completion of Operations and Maintenance Agreements.


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