About this service
Managed services — continuous technical maintenance, where a partner ensures over weeks and months the operation, monitoring, updating and incident response of systems — are today the foundation of almost every reasonably serious information system. Georgian law has no separate statute for managed services: the relationship is a blend of two classic contract types — works and mandate — governed by the corresponding chapters of the Civil Code and the general norms of freedom of contract. This service focuses precisely on getting that legal classification and the responsibilities flowing from it right — for service providers and customers alike.
The works contract — the result-oriented part
Article 629 of the Civil Code defines the works contract: under it, the contractor undertakes to perform the work stipulated by the contract, and the customer is obliged to pay the contractor the agreed remuneration. The part of a managed service that demands a concrete result — delivering a defined functionality, setting up an environment, carrying out a migration — fits exactly this model: there is work and there is its remuneration. Moreover, where the works contract contemplates the manufacture of an item and the contractor manufactures it from materials purchased by itself, it transfers to the customer ownership of the manufactured item — a rule that governs the transfer of assets created in a managed environment. It also matters that the compilation of a cost estimate connected with works is not reimbursed unless otherwise agreed — reimbursement of expenses separately exists only by agreement.
The mandate contract — the process-oriented part
The other half of a managed service — constant administration, the partner's actions in the client's interests — fits the mandate model. Under Article 709, under a mandate contract the mandatary is obliged to perform for the mandator one or several entrusted acts in the mandator's name and at its expense. This describes precisely functions such as daily system administration, user support in the client's name, maintenance of documentation and technical relations with third parties. Blending the two models is lawful and common, but it demands precision: where the agreement does not state which obligation follows which model, a dispute raises questions about remuneration, expenses, acceptance of the result and responsibility. A well-drafted managed-services agreement therefore always separates the two layers: one-off tasks — setup, migration, integration — are defined by their result and an acceptance procedure, while ongoing service is defined by periodic remuneration and measurable quality indicators. Such a structure gives both parties a precise language: when something fails, it is clear which norm and which annex applies.
Freedom of contract — the service architecture is the parties' decision
Article 319 grants subjects of private law the right, within the limits of the law, to conclude contracts freely and determine their content; a contract not provided for by law may also be concluded if it does not contradict the law. For managed services this means the parties themselves create the service architecture: what is included in the base fee, what counts as a separate order, which indicators are measurable. Freedom has a boundary too: a dominant market player is obliged to contract and may not without justification offer unequal terms, while a person acting for non-commercial purposes may not be refused a contract without substantiation.
Standard terms — the typical form of managed services
On the managed-services market the contract is often presented as standard terms. Article 343 regulates their incorporation: they become part of the contract only where the offeror makes a clearly visible reference to them at the place of conclusion and the other party can review and accept them. For entrepreneurs the bar is higher: they would have had to account for those terms when exercising diligence in the business relationship. The practical consequence for managed services: the service catalogue, the service level annex and the tariffs are documents that become part of the contract only through proper reference and review.
Breach of obligation and compensation of damage
When a managed service does not work to the agreed parameters — delivery is late, incidents recur without remedy — the customer has the right to claim compensation. Article 404 gives the general basis: the creditor is entitled to demand compensation for damage caused by delay. The norm extends to managed services: where the provider does not perform its obligation within the agreed period or quality, an obligation to compensate arises. The foundation of a successful claim is good record-keeping: an incident log, notifications, quality measurements and a calculation of the loss.
How we can help
Our specialists will examine an existing or planned managed-service model and determine which obligation follows which contract type, and what consequences this entails for remuneration and expenses. For providers, we build a structure of agreement and annexes that reflects the real architecture of the service and is defensible in a dispute; for customers, an analysis of what was truly promised and how to protect themselves on breach. Contact us for a concrete assessment or a draft agreement that cleanly separates the two layers — result and process — and binds your service to a real legal framework.