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A Service Level Agreement (SLA) specifies which services a provider delivers, the quality standards they must meet, and what happens if that level is not met. A good SLA protects both the provider and the customer—provided you pay attention to clear (SMART) objectives, sanctions, exceptions, and compliance monitoring. Below, you can read what to look out for when drafting an SLA.
What is a Service Level Agreement?
A Service Level Agreement (SLA) is a contract between a service provider and a customer. It specifies which services the provider delivers, the quality of those services, and the conditions under which they are delivered. A well-drafted SLA ensures that the agreements are workable and beneficial for both parties.
Formulate the right objectives (SMART)
Objectives are the core of an SLA. Which ones these are varies by situation, but in any case, consider:
- Security: of vital importance, because a data breach can seriously damage a company's reputation;
- Performance: the customer wants the services to be and remain fast and efficient;
- Support: good support with problems and questions.
Establish these objectives the SMART method : Specific, Measurable, Acceptable, Realistic, and Time-bound. The time-bound component concerns, for example, the guaranteed uptime per month and per year. Clear objectives clarify what parties can expect from each other and make the service delivery measurable.
Consequences if the service level is not met
It is always possible that the agreed level is not achieved. Link clear sanctions to this, such as:
- a discount;
- a contractual penalty;
- service credits — points with which the customer can obtain extra services if the provider does not meet the level.
Also include exceptions , for example in the event of force majeure: situations beyond the provider's control, such as natural disasters or strikes. Describe in the SLA what does and does not constitute force majeure. Scheduled maintenance is also often included as a ground for exception.
Control, reporting and changes
Finally, make agreements regarding:
- Compliance monitoring — possibly outsourced to an independent third party;
- Report on service delivery;
- Room for changes — for example, if new investments make a different service level possible.
Frequently Asked Questions
What is the minimum content of an SLA?
The services to be delivered, the quality requirements (SMART objectives such as uptime), the sanctions for failure to meet them, exceptions (force majeure, maintenance), and agreements regarding monitoring and reporting.
What are service credits?
Service credits are a form of compensation: points that the customer can use for extra services when the provider has not met the agreed level.
How do I handle force majeure in an SLA?
Include a clear force majeure clause that describes which external circumstances (such as natural disasters or strikes) release the provider from its obligations, and what does not fall under force majeure.
Can an SLA be modified mid-term?
Yes, provided you build in room for it. Specify under what conditions the service level or agreements can change.
Have an SLA drafted or reviewed?
Drafting an SLA is complex and can entail legal risks. We review your SLA, make adjustments where necessary, and ensure that both provider and customer are well protected.
View our SLA or our expertise in contract law, and schedule a no-obligation intake meeting.
