You may well have heard of service level agreements, or SLAs. These are formal contracts between a service provider and their customer that delineate the important details of the services being provided. While an SLA is not always required, there are many good reasons to have one in place. Here are just a few:

  1. An SLA can help ensure that both parties understand the expectations for the services being provided. This can help avoid misunderstandings and frustrating issues down the road.
  2. An SLA can provide some protection for the service provider in terms of liability and compensation if something goes wrong with the services being provided.
  3. An SLA can help set realistic expectations for both parties in terms of response times, turnaround times, etc. This can help avoid unnecessary frustration on either side.

An SLA should include details of the following:

  1. The parties involved in the agreement
  2. The services to be provided
  3. The standards of service to be met
  4. The metrics by which performance will be measured
  5. The remedies available to the customer if the service provider fails to meet the standards in the agreement
  6. The term of the agreement

What happens if an SLA is breached? 

When an SLA is breached, it means that the service provider has not met the agreed-upon standards of service. This can lead to a number of consequences for both the service provider and the customer.

For the service provider, a breach of SLA can mean financial penalties, as well as damage to their reputation. In some cases, the customer may even cancel their contract with the service provider. For the customer, a breach of SLA can mean disruptions to their business operations and decreased productivity. In extreme cases, it can even lead to legal action against the service provider.

It is important for both parties to understand what happens when an SLA is breached in order to avoid any negative consequences and accidental breaches of what is expected by both parties.

We would strongly advise that you seek good quality legal advice over the drafting of an SLA, as it is prudent to avoid any ambiguity creeping into the wording used in the agreement. Contact rhw’s Commercial Team for more advice on Service Level Agreements or on any other commercial legal matter.  01483 302000