A clearly defined service level agreement makes it much more difficult for both parties to argue over whether the service is in line with what was originally agreed. As a CIO, make sure you have a service level agreement for every important business relationship and have it verified by a lawyer. While service levels, service credits, and the right to terminate are the main provisions of a service level agreement, an SLA can encompass other issues depending on the structure of the entire contract, such as compiling an SLA can be a difficult process – since it is often about documenting processes that have previously been created organically within an organization. However, if you follow your business goals and follow the tips in this article, every SLA you create should improve your business relationship with your service provider and help you get the service you expect. While service agreements aren`t always legally binding, they need to be as clear as possible for the services you provide to be provided – this is where our lawyers can help. Here at First4Lawyers, our business lawyers are specialists in labour law. An SLA is larger and defines in detail how services are delivered. These include, for example, online time guarantees (« at least 99.5%)) and disruption protocols (« a receipt within 10 minutes, a status report within 30 minutes »). It`s up to you to see in what detail you want to go. In an SLA, it is important to clearly define the situations in which there is a breach of the obligations set out in the document and the consequences of such breaches. Service credits are useful for incentivizing the service provider to improve performance, but what if service performance is significantly lower than expected? If the SLA contained only one service credit, the customer, unless the service provided was so bad that it constituted a substantial breach as a whole, might be able to pay for an overall unsatisfactory service (albeiving at a reduced rate). The solution is to include a right for the customer to terminate the contract if the provision of services becomes unacceptable.
Therefore, the SLA should include a level of critical service level failure below which the service provider has this right of termination (and the right to bring an action for damages). For example, if service credits come into effect, if a service level outage has occurred twice in a given period, the SLA could indicate that the customer has the right to terminate the contract for major breaches if, for example, the service level has not been reached eight times in the same period. As with service credits, each level of service must be considered individually and weighted according to commercial significance. . . .