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A service-level agreement is a commitment between a service provider and a client. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user.

These are theoretically enforceable in our courts. The better a Service Level Agreement is, the greater the chance that it will be enforceable.A service-level agreement (SLA) is a contract between a service provider and its customers that documents what services the provider will furnish and defines the service standards the provider is obligated to meet. Once the service levels have been ascertained, it is necessary to deal with the impact of failure to meet them and the level of compensation must be defined. Negotiations often focus on the compensation the service provider must pay for service failure (whether it be in the form of penalties, service credits or damages).

This document is suitable for:

A service level agreement describes the services (not goods) that one entity will provide to another. If goods are being provided, a SLA is not the right agreement.

The service levels are at the heart of the relationship, as they set out the (agreed) criteria by which you can objectivity demonstrate that the quality of service you want has been achieved. There is no such thing as a generic “service level” agreement. Why? The content is entirely dependent on what the actual service is. It can be any service that you want to measure (ranging from looking after the pot plants in your office to hosting your IT infrastructure). It is necessary to identify and quantify the key activities that will be necessary. Perfect performance is not a realistic criterion.

Negotiation of service levels involves a compromise between the clients ideal list of requirements and the need to prioritise these in terms of what is realistically achievable. Performance measurement can entail considerable negotiation. A balance needs to be struck so that the desired levels of performance can be secured without imposing restrictions on the service provider that are so tight that they inhibit the development of a creative and effective working relationship.

Contents

In order to create a SLA that works, you must define:

the service to which the SLA applies;

a set of criteria or objectives to determine service levels that can be used to measure whether your objectives have been met;

who the SLA applies to (you or your customer);

the responsibilities of each person involved;

how the service levels will be measured (if it cannot be measured there is no point having a service level) and

actions to be carried out if the service levels are not met (for example service level credits).

Draftsman

This document was written for Agreements.org by a Senior Attorney (Admitted in the High Court) with more than 18 years’ experience. It complies with current South African law.