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A service level agreement ensures a successful working relationship between clients and service providers. Not surprisingly, they can be a little complex and tricky to understand.
This guide helps to clear up the key points of service level agreements, including how to write one. Plus, where to find free legal documents and templates.
A Service Level Agreement (SLA) is a contract between a service provider and a client. It defines the details and expectations of a service that's expected from a vendor. An SLA helps both parties of the contract understand their responsibilities more clearly.
An SLA should clearly state the services to be provided, the responsibilities of each party, penalties for a breach of service and the general terms of the agreement. Its key purpose is to prevent misinterpretation and lay the basis for productive co-operation.
A Service Level Agreement may be used in a range of circumstances. This includes situations when there's a need to:
The most common types of organisations to use an SLA tend to be those who work in Information Technology and Communications (ICT). However, the company receiving the service isn't always going to be an ICT company. For example, most businesses and government institutions can be heavily reliant on IT systems. What this means is that SLA's are becoming more common among non-ICT organisations.
An SLA can be defined as a documented agreement between service provider and client that identifies both services provided and the expected level of service. This is usually between two separate organisations. An Operational Level Agreement (OLA) is usually part of an SLA. The difference being that an OLA considers the business units that contribute to the SLA. The objective of OLA is to provide guidance on which units support the various responsibilities contained in the SLA.
What should be included will depend on the type of services required. Here a list of the common things that are included in an SLA:
A Service Level Agreement doesn't have to be bulky or overly complicated. Avoid unnecessary information that adds no value. Essentially, an SLA describes what the service is.
Describing the ins and outs of how the service is going to be provided isn't usually needed. Legal jargon is hard to avoid in an SLA. However, it is important that everything is clear, can be understood and it watertight from a legal standpoint. Any ambiguities in an SLA should be identified and removed.
A good SLA will grow the business because of improved customer relations. It also creates the environment for professional relationships to build, develop and create value. It does this as the basis for effective communication between all stakeholders. A well designed SLA ensures that the terms of an agreement are met. This means that the SLA is critical for completing projects and meeting business goals.
An SLA is a legally binding contract between a client and service provider. For that reason, a contract lawyer may be a sensible and safe option for you to consider. The legal part of an SLA is usually quite complex, and you may choose to get legal advice after the document is written (a service which is commonly offered by legal template providers; see below). This is mainly to be prepared should the need for litigation occur in the future.
Due to the high cost of litigation, it’s reasonable to consider legal advice as an essential part of completing an SLA.
Because of the complex nature of the ICT industry there isn’t a one size fits all SLA. Depending on the kind of service offered SLA’s can vary significantly. There are three main types of SLA:
The following key components may be included in a service based SLA:
An example of a Service Level Agreements is Aruba's. Depending on what you want, there are several templates you can choose from, to get you started. These templates are available online, some are even free and customisable. When writing any type of SLA, the following points need to be considered:
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