Service Level Agreement

A service level agreement (SLA) turns a general promise of good service into measurable targets – such as 99.5% monthly availability or a one-hour response to urgent faults – and sets out how performance is measured and reported, and what happens when targets are missed (service credits, remediation plans and, ultimately, termination). It is written as a schedule-style agreement that sits alongside a main services contract (the “Main Agreement”), or can be used on its own for a simple service.

• IT support, managed IT, hosting, software-as-a-service or telecoms services
• Outsourced services such as payroll bureau, bookkeeping, cleaning, security or facilities management where timeliness and quality can be measured
• When a customer wants contractual comfort that a service will be reliable, or a supplier wants to define (and limit) exactly what it is promising

• Insert the parties’ details and identify the Main Agreement in the Background section
• Complete Schedule 1 with each service level, how it is measured, the target and the measurement period, and complete the priority table
• Agree the service credit bands and the overall cap in Schedule 2 – check the worked example makes sense with your own figures
• Fill in the reporting requirements (clause 11 and Schedule 3) and the contacts and escalation path (Schedule 4)