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Why you need Hardware Sale & Maintenance Agreements

ICT suppliers in the hardware business invest a significant amount of time and money in the development of their products and any software that is bundled with their products.

In order to obtain a return on their investment it is necessary for the ICT supplier to be able to re-sell their hardware, and to provide maintenance services, at a profit.

The key considerations in the hardware sale agreement are to ensure that the customer pays for the hardware, that title is passed to the customer and any defects that are found in the hardware are remedied in accordance with the warranty or maintenance arrangements.

The key considerations in the maintenance agreement are that the ICT supplier provides maintenance only for the items that are genuine defects and not for items that have been caused by the customer’s use and/or modification of the hardware.

Accordingly, the key issue is to properly describe those remedial services which are in-scope (and therefore within the price paid by the customer) and those which are out of scope and for which the ICT supplier should be entitled to additional payments.

The hardware sale and maintenance agreement is the contract that is associated with the sale of the hardware and the provision of any maintenance and support services and provides a number of legal protections for both the ICT supplier and the customer. It is this contract which allocates responsibilities and liabilities between the parties.

Without a hardware sale and maintenance agreement the ICT supplier will:

take on many unmanaged risks;
have unlimited liability for breach of contract;
be exposed to providing services to maintain hardware which the supplier may not have anticipated or which arose from something that the supplier perceived to be “faults arising from the customer’s wrongful use of the hardware”;
be uncertain as to when title in the hardware passes to the customer;
have a lack of clarity as to what constitutes a warranty claim and what constitutes maintenance service. Importantly, these 2 services may be charged for in different ways and so it is essential to describe which type of claim falls under which type of service;
if you are a distributor, fail to comply with the terms of your agreement with the original equipment manufacturer. Typically, distribution agreements with original equipment manufacturers require that certain provisions are included in the agreement between the ICT supplier and its customer.

Next, learn about Passing of Title.

Why you need Hardware Sale & Maintenance Agreements Passing of Title Warranty Obligations for Hardware Sellers Hardware Reseller Agents & Distributors Warranty and Maintenance for Hardware Key Commercial Issues for Hardware Sales Tips to Make Money

Master Hardware Sale Agreement Master Hardware Sale & Maintenance Agreement Master Hardware Maintenance Services Agreement

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