Service Level Agreement

A service level agreement is an agreement which is done between the service provider and the customer. Service level agreements is output based specifically to define what the customer will receive. Thus, it is a legal document between the service provider and the user of service, it defines the nature, quality, and scope of the service to be provided.

Service Level Agreement can be defined at different levels and differentiated in types:

  • Customer-Based Service Level Agreement covering all the services utilized by individual customer groups.
    For example, an SLA between a Service Provider of HR services and the HR department of a company.
  • Service-Based Service Level Agreement between a large number of customers using a particular service and the service provider.
    For example, an SLA between a telecom service provider and all its customers using a particular service from the provider.
  • Multi-level Service Level Agreement is divided into levels for directed towards different sets of customers for the same services, in the same SLA:
  1. Corporate Level covering all the issues which are same for the entire organization.
  2. Customer level covering the entire issues specific to a customer. Service Level covering all the entire issues relating to a specific service.

Service Level Agreements is one of the foundational agreements between the service providers with the customer. Between the Master Service Agreement which establishes the general terms and conditions and SLA, the SLA adds greater specificity regarding the services provided.

Why are Service Level Agreement essential?

Service Level Agreement (SLA) is important for the reason that it states following:

  • Clear and unambiguous details of the service are provided with service days and hours;
  • Defines the problem that might occur and their gravity, also providing the reacting time;
  • The consequences of missing targets;
  • SLA lays down the customer rights and penalties in case of non-performance which ensures that the relationship between the customer and the service provider remains clear and positive;
  • What is the procedure, hierarchy and the expertise of the service provider;
  • It mentions the guaranteed areas in which the service shall be provided and what shall be exempted;
  • What is the method of problem resolving;
  • SLA defines the commitments made to and by the customers and well-defined indicators for the customer service which minimizes the chances of disappointing the customer and keep a check of levels of customer satisfaction.

What terms does a Service Level Agreement include?

A well-drafted SL Agreement generally discloses the following:-

  • Definitions and interpretations of the terms used in the agreement
  • Scope of SLA,
  • Duration of the SLA,
  • Reliability,
  • Customer support arrangements,
  • Point of Contact, escalation and a communication matrix,
  • Mutual Responsibilities,

Financial Provisions

  • Payment of recurring fee
  • Monthly fee
  • One time charges
  • Reimbursements
  • Miscellaneous fee
  • Format of Invoice
  • Term period of payment
  • Clause for Non-Disclosure of Confidential information,


  • Arbitration
  • Notice
  • Amendments And Waiver
  • Compliance With The Law
  • Governing Law
  • Jurisdiction
  • Warranties and Guarantees
  • Indemnity
  • Sever ability etc

Advantages of Service Level Agreement

A Service Level Agreement (SLA) is important for both the person providing a service and the one receiving it. It serves as a final word. By this, both the parties play very close attention to the details making it so there is no confusion.

All the services that the customer needs(wants) are included in the SLA. This means that the customer knows what to expect in terms of quality of service and other certain parameters are defined, making it a necessary document.

Service Level Agreement Procedure

  • A well efficient lawyer from our team shall contact you, and explain you the total process, and will understand the need of Service Level Agreements by you.
  • Once the objectives of the same are clear, the lawyer shall draft a sample Service Level Agreements accordingly.
  • The draft Service Level Agreements shall be sent to you, for your review.
  • The whole process takes around 3-4 working days.

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anmol ghai

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