Turnkey Contract Definition
A turnkey contract is a type of agreement in which one party agrees to perform a complete and specified set of services for another party, with the understanding that the other party will not need to perform any additional work. The term turnkey is derived from the fact that once the contract is signed, the provider is responsible for ensuring that everything is in place and ready for use.
In some cases, a turnkey contract may also include an agreement for the purchase of equipment or other goods necessary to complete the project. For example, if a company is looking to build a new factory, it may sign a turnkey contract with an engineering firm. The engineering firm would be responsible for designing and constructing the factory, as well as procuring any necessary equipment. Once the factory was built and up and running, it would be ‘turnkey’ and ready for use by the company.
Turnkey contracts are often used in construction projects, but can be used in other industries as well. For example, a company might sign a turnkey contract with an IT firm to implement a new software system. The IT firm would be responsible for designing, developing, testing and deploying the software system. Once again, once the system was up and running, it would be ‘turnkey’ and ready for use by the company.
There are several advantages to using a turnkey contract:
– Turnkey contracts can save time and money by having one party responsible for
