Top 5 FAQs about service level agreements (SLAs)

1. What is an SLA?

A service level agreement (SLA) is a document that sets out the standards of service to be provided by a service provider to a customer. It is a legally binding contract that outlines the specific expectations, responsibilities and performance metrics in relation to the service provision. SLAs are commonly used in IT services, customer support services, and facilities management services, but can also be used in many other industries to maintain transparency and accountability between parties involved in service delivery. It can be particularly useful where the services being provided are of a business-critical nature, in order to ensure consistent service delivery and availability.

2. What clauses does a typical SLA include?

SLAs usually define key parameters for measuring service delivery, such as response times, uptime guarantees, and support services, and also set out any agreed consequences for failing to meet these predefined benchmarks. A typical SLA will include the following sections:

1. Service levels - this is the heart of an SLA and sets out the service levels that the supplier is expected to meet when providing the services to the customer. It will often categorise different service levels depending on their importance, from critical to low severity. This can be a useful way of prioritising service delivery and understanding what is most important to the customer;

2. Availability - SLAs will sometimes include a specific service level in relation to the availability of the service, as well as clauses that relate to exceptions for planned and unplanned maintenance. An availability service level is particularly common where the service includes the provision of software as a service;

3. Service credits - a common consequence for failure to meet service levels is the payment of service credits. SLAs will often include a section that sets out the service credits that will be payable by the supplier to the customer in the event that the service levels are not achieved. It can also include a cap on the maximum service credits that are payable in a specified period. A service credit is usually a deduction from the price payable by a customer in response to a supplier's failure to meet a service level, and must be set at a justifiable level that is not

4. Monitoring and reporting - this type of clause will include an obligation on the supplier to keep records and provide reports upon request by the customer. It can also contain an optional audit right in favour of the customer in order to maintain an oversight over the supplier's activities; and

5. General - this section would include a number of other legal terms that are common in English law contracts including, for example, governing law and jurisdiction, notices, variation and severability. It is also common to include a precedence clause which makes it clear which agreement (this SLA or the main agreement) takes precedence in the event of a conflict between their terms.

Docue’s service level agreement example has the option to include all of the clauses above, so that you have a fully tailored SLA agreement to suit your business needs.

3. How can an SLA benefit my business?

SLAs are essential for ensuring a clear understanding between service providers and their customers. They set expectations, provide a basis for performance evaluation and offer a means of redress in case of service deficiencies (e.g. via service credits). They also promote accountability and help maintain a positive working relationship.

SLAs can serve as a crucial document in various business relationships, ensuring that the quality and level of service provided meet the agreed-upon standards. By providing a clear remedy for customers where service levels are not met, SLAs can be a great way to incentivise service providers whilst also protecting customers through a clear remedy process.

Use Docue’s service level agreement example today to protect your business.

4. What other documents might I need alongside an SLA?

An SLA will specifically address the performance standards that services must adhere to and the consequences in case these standards are not met. It is therefore supplemental to a “primary” or “main” agreement, which encompasses broader aspects of the service relationship, including its duration, termination provisions, liability, and payment terms.

The different types of “main” agreement could include, for example, a MSA, SaaS Agreement, Services Agreement or Software Licence Agreement. If you're looking to determine the most suitable service agreement for your business, check out this informative guide.

In addition, if any personal data is processed as part of the service delivery a data processing agreement will need to be entered into in order to govern the processing relationship and to comply with data protection laws. Find out more about data processing agreements here.

5. How can I draft an SLA? Use Docue’s service level agreement example!

SLAs are a crucial part of service delivery, whether you are a customer or a service provider. It’s therefore important to make sure that you get it right. Docue’s service level agreement example is here to help you - all you need to do is answer a series of questions, and your SLA will be updated in real-time to reflect your answers. The result is a fully customised SLA to protect your business.

So easy to use: Docue is quick and simple to use. With Docue, you can choose from 100+ templates to create your own legal documents in no time.

Full contract process: signatures can be collected electronically, and all contracts you make are saved securely in your company's own contract account.

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