Warranty & SLA Decoded: What Your Cooling Vendor Actually Owes You

Circolife Team · 6 August 2026 · 9-minute read

AC warranty coverage and service-level agreement guide

Your contract says "5 years comprehensive warranty." Read it again. It almost certainly isn't.

Comprehensive is a marketing word, not a legal one. What actually governs your cooling is a stack of clauses spread across the warranty card, the AMC annexure, and — if you are lucky enough to have one — the service level agreement. Most business owners sign all three without reading any of them, then discover the gaps in the third week of May, when a unit is down and nobody is contractually obliged to show up.

This is a clause-by-clause breakdown of what your cooling vendor actually owes you, what has quietly been excluded, and what to push back on before you sign. We have also built an interactive contract exposure check at the end — seven questions about your current contract that will estimate what those clauses are likely to cost you out of pocket over three years.

01Your warranty is four warranties, not one

The biggest misreading of AC warranty terms in India is treating "warranty" as a single block of coverage. It is four separate promises — compressor, components, refrigerant, and workmanship — each with its own duration, its own exclusion list, and in most contracts, a different party responsible for honouring it.

Compressor warranty — the headline that misleads

Five to ten years — and the number on every proposal. Read it carefully: it usually means the vendor will supply a replacement compressor, not that they will fit it, gas it, or transport it to your premises. On a 2-tonne commercial cassette unit, the labour, refrigerant recharge, and handling around a compressor swap typically runs ₹8,000 to ₹14,000 — more than the cost of the part itself in many cases. A vendor offering a "10-year compressor warranty" who is billing you for the swap is not technically in breach of anything.

PCB, condenser, fan motor — the parts that actually fail

One to five years is the standard range, and parts-only cover is the default structure. Labour is billed per visit at ₹800 to ₹2,000 depending on city and vendor. The PCB — printed circuit board — is statistically the most common failure point in commercial inverter units after the compressor, particularly in high-dust environments like restaurant kitchens and gym floors where thermal cycling and particulate load are intense. A PCB replacement on a commercial inverter unit runs ₹4,500 to ₹9,000 in parts. If labour is not included, add another ₹1,500 to ₹3,000 per callout.

Refrigerant — twelve months, then your problem

Gas leaks are the most common recurring fault in Indian commercial cooling, driven by vibration, poor brazing during installation, and dust-loaded coils that accelerate corrosion. The majority of standard AMC contracts cover refrigerant top-up for the first twelve months, then exclude it entirely. Two recharges over a three-year contract term is a reasonable estimate for a commercial unit in a harsh environment — at ₹2,500 to ₹4,000 per recharge, that is ₹5,000 to ₹8,000 of direct out-of-pocket cost that never appears in the headline AMC price.

Workmanship — the shortest and most fragile

Typically twelve months, and it lapses the moment anyone outside the authorised service network opens the panel — including your own maintenance staff, unless they are explicitly named as permitted in the contract. This clause is also the one that catches most businesses in disputes: routine cleaning by a building maintenance team, a hotel engineer tightening a fitting, or a restaurant manager topping up water in a drain line can all void workmanship cover in a strict reading of standard Indian AMC terms.

"The question isn't how long is the warranty. It is: for each of compressor, PCB, fan motor and refrigerant — is labour included, and for how many years?"

02The warranty says what gets fixed. The SLA says when.

A warranty is a promise about parts. An SLA is a promise about time — and for a running business, time is the expensive variable. A café with a dead cassette unit in June is losing covers whether or not the compressor is technically covered.

Four SLA terms that look solid until you read them carefully.

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Response time — attendance, not acknowledgment
"4-hour response" can mean the vendor sends you a ticket confirmation email in 4 hours, or that a technician is physically on site in 4 hours. These are very different promises. Insist on on-site attendance, with the clock starting from the moment you log the ticket — not from when the vendor accepts it, allocates it, or calls you back. In most Indian commercial AMCs, response time means acknowledgment. Peak-season on-site attendance for unplanned callouts commonly runs 24 to 72 hours.
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MTTR — mean time to repair, the number that actually matters
Response time gets someone to your door. MTTR — mean time to repair — is when the unit is working again. The difference matters enormously: a technician can be on site in 4 hours and tell you the part needs to be ordered from a distributor in another city. If MTTR is not written as a number in the contract, it is not a commitment. Ask for it split: on-site resolvable faults (capacitor, cleaning, minor electrical) and faults requiring a part. The latter should have a separate, longer MTTR with a named escalation path if the part is unavailable locally.
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Uptime guarantee — what 95% actually means in a peak summer
95% uptime sounds strong. It is an allowance for 18.25 days of downtime per year — roughly the entire peak month of May, if a vendor is minded to use the allocation. 98% uptime is about 7.3 days. 99.5% is under 2 days. But the measurement window matters as much as the percentage: annual averaging lets a vendor absorb a fourteen-day peak-summer outage, miss the months your business depends on most, and still hit the yearly target. Push for monthly measurement, and check whether planned maintenance windows are excluded from the calculation — they usually are, and vendors in India often schedule "planned maintenance" during peak demand as a way of reclassifying unplanned failures.
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Penalties — a preference is not an obligation
An SLA without a penalty schedule is a statement of intent, not a contract obligation. It does not need to be large to be effective — even a ₹500 per-hour-of-overrun credit changes the internal calculus of the vendor's service team, because missing you becomes a visible cost in their system rather than an inconvenience. A vendor who refuses to include any penalty clause for SLA breach has told you something significant about how they prioritise their clients.

95% uptime is not a guarantee. It is an allowance for 18 days a year without cooling — including peak summer.

03The fine print that quietly voids your cover

Most warranty disputes in India are not lost on the main coverage clause. They are lost on the exclusion list — typically buried in an annexure, in font size ten, under a heading like "conditions of validity" or "standard exclusions." These are the four most common ways Indian businesses discover their warranty is worthless at exactly the moment they need it.

⚠ Exclusion

Third-party technicians

The moment a non-authorised technician opens the panel — even for routine coil cleaning — workmanship cover typically lapses. This includes your own building maintenance staff unless they are explicitly named as permitted in the contract. A clause like "serviced by authorised personnel only" sounds reasonable; in practice, it means a ₹500 coil-cleaning visit by your regular maintenance vendor can void thousands of rupees of coverage.

⚠ Exclusion

Non-approved refrigerant

A cheaper top-up from a local vendor — common practice, and typically ₹500 to ₹1,000 cheaper per visit — can void compressor cover entirely, because off-spec or unverified gas is treated as a contributing cause of failure. The vendor does not need to prove it caused the failure; they just need to show it was used. This is the most expensive shortcut in commercial cooling, and the one most business owners discover only after a compressor failure.

⚠ Exclusion

Missed routine servicing

Many warranties are conditional on servicing being completed at the vendor's stated frequency and documented in a service log. If the vendor does not turn up — which is common — and you did not chase them in writing, the service log is blank, and the burden of proof lands on you in any dispute. "As required" service schedules mean nothing. Get a fixed number of visits per year in writing, with a scope checklist attached.

⚠ Exclusion

Narrow definition of failure

If "failure" is defined as complete non-functionality — the unit does not turn on at all — then a unit cooling at 40% rated capacity during a Delhi June is technically "working" under the contract. No SLA trigger, no penalty, no obligation to repair urgently. This exclusion is standard in most Indian AMC templates. Push for a functional definition: "failure to maintain set-point temperature within X degrees" or "failure to deliver rated BTU output within Y%."

04What to actually negotiate before you sign

Vendors in India expect negotiation on price. They rarely expect it on terms — which is exactly why terms are where the real leverage sits. The AMC template was written to protect the vendor. Most of its provisions can be renegotiated, and most vendors will concede on the things that matter most, because the concessions that matter to you (response time, refrigerant cover, penalty clauses) are cheap to promise and rarely exercised against a well-maintained vendor relationship.

Push on these five points, in this order:

On-site response time, written in hours
Not "response" — attendance. Clock starts from ticket log, not from vendor acknowledgment. Get a specific number: 4 hours for Tier 1 cities during business hours, 8 hours outside business hours, 24 hours for Tier 2. If a vendor will not commit to on-site attendance time in writing, they are telling you their peak-season capacity is already spoken for.
Named parts coverage with labour marked against each
Not "all parts" — compressor, PCB, fan motor, capacitor, sensors, and refrigerant listed individually, with "labour included" or "labour excluded" written against each one. A comprehensive-sounding headline with a parts exclusion annexure is the oldest structure in the business. If the vendor cannot give you a named list, the list does not exist in their favour either.
Refrigerant for the full term
The highest-value single ask in any cooling contract, and the one most vendors will concede because gas leaks are so common that they affect all their clients — absorbing the cost is a differentiation play for them. Push for refrigerant top-up included for the full contract term, with no limit on number of recharges per year, using approved refrigerant only.
Preventive maintenance as a fixed number, with a scope checklist
Four visits per year minimum for a commercial installation — six for high-usage environments like restaurants, gyms, and server rooms. Scope checklist to include: coil cleaning, drain-line flush, refrigerant pressure check, electrical connection torque check, capacitor check, and filter replacement. "As required" means visits when they choose, not when you need them, and missed servicing is also the most common grounds for claim rejection.
A written definition of failure tied to capacity
Not "unit does not operate" but "unit fails to maintain set-point temperature within 2°C under rated load conditions." This clause is what makes the SLA enforceable in practice. Without it, a half-functional unit in a 38°C Mumbai office is technically "covered" and no penalty triggers. Ask also for a named second-level escalation contact and a defined escalation window — because when the first technician cannot fix it, the ticket needs somewhere to go.

05Red flags — when to walk away from the contract

These are not negotiating points. These are structural tells. If you see them, the contract was written to minimise the vendor's obligations, not to protect yours.

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The SLA is shared only after signing
If the service level agreement is not available at proposal stage — "we will sort the SLA after signing" — it was never meant to be read before signing. The terms are always written; the delay is a tactic. Walk away, or make SLA review a pre-condition of contract signature, in writing.
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"Parts extra" buried in an annexure
A comprehensive headline warranty with a parts exclusion list in an annexure three pages deep is the oldest structure in Indian commercial maintenance contracts. Look for annexures titled "Schedule of Charges," "Parts List," or "Exclusions" before signing anything. If the annexure is longer than two pages, read it. If it prices individual parts, you are buying a labour-only contract.
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Uptime measured annually without a peak-season carve-out
Annual uptime averaging allows a vendor to run 0% uptime for the entire month of May — your most critical trading month — and still hit a 97% annual target. Push for monthly measurement, with a separate and higher uptime commitment for April through July, when your business cannot afford downtime and when every other client is also calling for service.
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No named escalation matrix
Without a second-level contact and a defined escalation window (e.g., if the first technician cannot resolve within 4 hours, who is the next contact, and what is the resolution target), your ticket has nowhere to go when the first attempt fails. Most AMC contracts in India have no escalation clause at all. The absence of one is a structural tell about how the vendor handles complex or repeated failures.