Service contract life cycle

  • Release version: Yokohama
  • Updated January 30, 2025
  • 2 minutes to read
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    Summary of Service contract life cycle

    The service contract life cycle in ServiceNow defines the various states a service contract and its related entities (contract lines, entitlements) pass through from creation to expiration or cancellation. Each state enables specific actions and controls how contracts and their components can be modified or managed. Understanding this life cycle helps customers maintain accurate contract data and ensures alignment between sold products, service contracts, and entitlements.

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    Key States and Actions

    • Draft: Contracts are initially created in this state. Customers can modify start/end dates, add/remove contract lines and entitlements, and update sold product/install base items. Dates of child records must stay within the parent contract's date range.
    • Active: The contract is effective from the activation date. Modifications can be made manually, via integration, or CRM workflows. The start date cannot be changed, but the end date can be extended beyond the current date. Contract lines and sold products/install base items can be added or modified.
    • Expired: The contract is no longer active after its end date. No further actions can be performed.
    • Canceled: The contract is formally canceled. No further actions can be taken.
    • Suspended: When a sold product is suspended, related contract lines and entitlements in Draft or Active states move to Suspended. Suspended items are paused except for field value edits and creating related list records. Upon resuming the sold product, these items return to appropriate states based on their dates. If the end date is reached while suspended, they automatically expire.

    Key Rules and Considerations

    • Child entities (contract lines, entitlements) inherit the Expired state from the parent service contract but do not affect the parent’s state.
    • The sold product or install base item referenced in contract lines or entitlements must be in the same state as the entity referencing it.
    • Date validations enforce that service contract lines must be created and modified within the parent service contract’s start and end dates to maintain consistency.

    Practical Impact for ServiceNow Customers

    By following these life cycle states and rules, customers can effectively manage service contracts, ensuring proper tracking of contract status and alignment with related products and entitlements. This prevents invalid contract modifications, supports accurate contract fulfillment, and maintains data integrity across contract records.

    A service contract goes through the various states in each phase of its life cycle.

    In each state, a service contract is enabled to perform certain actions as mentioned in the following table.
    Table 1. Service contract life cycle, related states, and actions that it can perform
    Life-cycle State Action
    A service contract is generated. Draft
    • The start and end dates of the service contract can be modified such that the child records' dates are within the date range.
    • The related contract lines and entitlements can be added, removed, or modified.
    • The sold product/install base item covered can be added or removed.
    Service contract gets activated on the date of activation. Active
    • Modifications to the service contract can be done manually, via integration and via Sales Customer Relationship Management workflow.
    • The start date can't be modified.
    • The end date can be extended and should be greater than the current date.
    • Service contract line items can be added.
    • The sold product/install base item covered can be modified.
    Service contract is deactivated on the date of expiration. Expired No action.
    Service contract is canceled. Canceled No action.

    The service contract line items and entitlements also perform similar actions in the respective states.

    When a parent entity moves to the Expired state, the child entities inherit the same state. For example, when a service contract expires, the related contract lines and entitlements also expire.

    However, the state change of a child entity doesn't affect it parent entity.

    The sold product or install base item referenced either in the contract line or an entitlement must be in the same state as the entity where it's referenced.

    Suspended state

    When a sold product is suspended, the related service contract lines and entitlements, in the Draft or Active states, move to the Suspended state as well.

    A suspended service contract line or entitlement is paused for any activity, except the following:
    • Editing the field values.
    • Creating records in the corresponding related lists.

    On resuming the sold product, the related service contract line item or entitlement acquires the state depending on its start and end dates. For example, a resumed entitlement that has its start date in the past and its end date in the future, acquires the Active state.

    Exceptionally, when a contract line or entitlement in the Suspended state has reached its end date, it moves to the Expired state automatically.

    Date validations

    A service contract line associated with a service contract must be created within the service contract's start and end dates. Any modification to the dates of service contract lines must comply with the date range of the parent service contract.