Common use of Performance Credits Clause in Contracts

Performance Credits. If the Contractor fails to maintain the Product within the times specified by the maintenance agreements between the Contractor and the Authorized User, it is understood and the Contractor hereby agrees that the amount of 1/30th of the monthly maintenance value, up to the monthly value of the maintenance service, shall be deducted from the monies due the Contractor, for maintenance, for each intervening calendar day any work remains incomplete, as a performance credit. The Contractor shall not be liable if failure to perform arises out of causes beyond its control and without the fault or negligence of the Contractor (Acts of God, the public enemy, fires, floods, strikes, freight embargoes, regulated telephone company delays, etc.). Authorized Users have the right to sign a maintenance agreement that increases the Performance Credit as stated, but the Performance Credit can’t be eliminated through negotiation.