If you’re engaging someone for services or you’re the one providing services, you may have heard of the concept of “service levels”.

In a service business, a client might expect minimum levels of required service from the service provider. In the marketing and technology industries, this is commonly referred to as “service levels”.

To make sure that the service provider actually commits to a service level, it is often recorded in writing as part of a Service Level Agreement

But what is a Service Level Agreement, anyway?

What Is A Service Level Agreement?

A Service Level Agreement (often shortened to “SLA”) is an agreement that sets out the minimum required levels of service that a client can expect from their service provider.

Perhaps the easiest way to explain this is to walk you through an example.

Imagine that you run a creative agency business. And, as part of your services, you build and design websites for your clients.

Typically, you would have a general Service Agreement that sets out your roles, responsibilities, payment terms and other clauses that you’d normally see in a Service Agreement.

But for more sophisticated projects or clients, a Service Level Agreement is a more complex document that sets out the levels of service required for that client.

For example, the client might expect that you attend to any website bugs or problems that occur. These requirements can be quite specific, so the SLA might require that you respond to any website issues within a certain timeframe. This will ensure that, from the outset, both you and the client are clear on how and when you’ll respond to these issues.

Often, a Service Level Agreement will also set out consequences for failure to comply with the agreement — including service credits or partial refunds.

How Do I Use A Service Level Agreement?

A Service Level Agreement works pretty closely with your general Service Agreement. As such, it’s actually quite common to have your SLA set out in a Schedule in your Service Agreement.

This means having your Service Agreement formatted normally, with a separate section attached to the back of the document that simply sets out the “service levels”.

Otherwise, more sophisticated projects might actually require a longer-form and completely separate document (either way is fine, though!). 

And, it can be quite common for a SLA to deal with many other contracts common to the IT industry: from Managed Services Agreements to Master Services Agreements.

What Can I Find In A Service Level Agreement?

A Service Level Agreement can really vary from one contract to another (depending on your project and what your client’s expectations are).

However, often the most common clauses are around:

  • Required response times of a service provider for issues raised by a client
  • Required up-times or availability of websites hosted by service providers (for IT businesses)
  • Consequences of the service provider’s failure to comply with the SLA.

Need Help With A Service Level Agreement?

Whether you want a contract with a SLA schedule, or if you need a separate Service Level Agreement, we’re here to help!

As a matter of best practice, it’s always a good idea to speak with an experienced lawyer who understands your industry, the common problems that come up, and how to customise the contract to your needs.

Our legal team at Sprintlaw is quite familiar with these kinds of contracts so don’t hesitate to reach out!You can have a chat with us on 1800 730 617 or drop us a line at team@sprintlaw.com.au.

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