Explaining Service Contracts


After completing this lesson, you will be able to:

  • Explain Service Contracts

Explaining Service Contracts

Service Contract

See the following video for an overview of the service contract.

The features of a Service Contract can be summarized as follows:

  • Represent an outline agreement with customers that defines content and scope of services, under specific conditions, for a particular period.

  • Specify the service levels to which a customer is entitled.

  • List the parts that are covered by contracted services (for example, server, workstations, and printers).

  • Include a product list containing services and service parts in contract entitlement.

  • Contain price agreements for services and parts.

  • Limit contracted services or service parts in terms of value and/or quantity.

A service contract is a long-term agreement with business partners that specifies which services are being offered for that period. The service contract line item lists customer objects, typically pieces of equipment, that are covered by the contract line item.

Service level agreements list the level of service to which a customer is entitled and contain functions for monitoring compliance with those terms. A contract may include contract-specific price agreements that control not only what is covered by the contract, but also what prices may be charged for any work covered by that contract.

See the following video to learn more about the structure of a service contract.

How to Create a Service Contract

Service Order assigned to Service Contract

Depending on the Customizing settings, when creating a service process with a transaction type for which contract determination is activated, you are either requested to select a contract or the system determines the contract and copies it to the transaction automatically. For successful contract determination, the following criteria must be fulfilled:

  • Partner data

  • Sales and Service Organization

  • Status

  • Validity

  • Object List

  • Product list

  • Copy control

How to Create a Service Order with Contract Assignment

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