Facility Management Agreement

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Facility Management Agreement

This agreement arises as a result of the services provided by a service provider to its clients. The agreement clearly emphasizes the scope of the facilities that will be provided by the service provider to its customer. The performance of the facility Management Agreement is elucidated in the Service Level Agreement.

This is an agreement to design and construct new facilities too, just as in the case of design build contract.

A Brief on Facility Management Agreement

What is a Facility Management Agreement? A facility management services agreement is a legal document signed by a service provider who is engaged in providing facility management services to its customers. These services are well-defined in the Facility Management Service Level Agreement to facilitate the performance management of the facility management services outsourced.

The agreement is taken by a facility management service provider and its customer, with a provision to provide facility management service level.

Purpose of a Facility Management Agreement

The main purpose of the agreement is to have a clear idea about the scope of the facilities that will be provided by the service provider to its customers, which will help to avoid any sort of dispute in the future.

Contents of a Facility Management Agreement

The following are some of the contents of an agreement;

  • Name and address of the parties involved i.e., service provider and customer
  • Date of the agreement
  • Duration of the agreement
  • Scope of the agreement
  • Details of general obligations of the service provider
  • Details of the obligations of the customer/client
  • Details of representatives, purchase orders, variations, performance monitoring
  • Inspection and Reports
  • Detail of price and payment
  • Details of methods of termination and suspension
  • Details of IP rights and Insurance
  • Details of governing law
  • Details of validity and the scope of the agreement

A facility management agreement sample elaborates on each of these inclusions.

How to Draft a Facility Management Agreement?

To draft an agreement,

  • Mention name and address of the parties involved service provider and customer
  • Mention date of the agreement
  • Mention duration of the agreement
  • Mention scope of the agreement
  • Mention details of general obligations of the service provider
  • Mention details of the obligations of the customer/client
  • Mention detail of price and payment
  • Mention details of methods of termination and suspension
  • Mention details of IP rights and insurance
  • Mention details of governing law
  • Mention details of validity and the scope of the agreement

Needless to say, the negotiation process of an agreement is generally not done as this is made in respect of the facility provided by the service provider to its clients. However, a client can add or subtract facilities as per mutual understanding with the service provider.

Benefits of a Facility Management Agreement

This helps the customer to know about the details of the facilities provided by the service provider and choose the service accordingly.

Also, it helps maintain transparency between the parties regarding the facilities that will be provided.

What Happens in Case of Violation?

In case of violation of the agreement on the part of the service provider or client, both of them can file a legal complaint against each other and also can claim for compensation for such breach.

Agreements as these have gained prominence. This agreement is deemed mandatory since it helps the service provider and its customer to maintain transparency and clarity regarding the scope of the services.

[ Also Read: Facility Agreement]

Sample for Agreement to Design and Construct New Facilities

A sample of the agreement can be downloaded from below.

facility management agreement - Download PDF

facility management agreement

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