How to Create a Service Level Agreement (SLA)

Service Level Agreements (SLAs) are crucial documents that outline the expectations, responsibilities, and quality of service between a service provider and a client. An SLA defines the standards and metrics by which the service is measured, and the remedies or penalties if these standards are not met. Creating a comprehensive and effective SLA requires careful consideration of various key clauses. This article will guide you through the process of creating an SLA, explaining each key clause in detail.

1. Introduction and Purpose

The introduction of an SLA should clearly state the purpose of the agreement. It typically includes an overview of the service being provided, the parties involved, and the objectives of the Service Level Agreement. The purpose clause sets the context and scope of the agreement, ensuring both parties have a mutual understanding of what the SLA aims to achieve. This section might also highlight the importance of the SLA in maintaining a high standard of service and fostering a positive client-provider relationship.

2. Definitions and Terminology

This clause defines all specific terms and acronyms used within the SLA. Clear definitions help avoid misunderstandings and ensure that both parties have a consistent interpretation of the terms used. For example, terms like “uptime,” “downtime,” “business hours,” and “incident” should be explicitly defined. This section ensures clarity and sets the foundation for the detailed service specifications that follow.

3. Scope of Services

The scope of services clause outlines the specific services covered by the SLA. It includes detailed descriptions of the services, deliverables, and any limitations or exclusions. This section ensures that both parties have a clear understanding of what is included in the service provision and what is not. By defining the scope, the SLA helps manage expectations and reduce the risk of disputes.

4. Service Performance

This clause specifies the performance standards that the service provider must meet. It includes key performance indicators (KPIs) and metrics such as response time, resolution time, and availability. For example, the SLA might state that the service must have an uptime of 99.9% or that customer inquiries must be responded to within 24 hours. Clear performance standards help measure the quality of service and hold the provider accountable.

5. Service Availability

Service availability details the expected uptime of the service. It defines the times when the service is expected to be operational and any scheduled maintenance periods. For instance, an SLA might guarantee 99.9% uptime, allowing for minimal downtime. This clause ensures that clients know when they can rely on the service and helps manage their expectations regarding service interruptions.

6. Support and Maintenance

The support and maintenance clause outlines the support services provided, including how clients can report issues, the process for handling support requests, and the maintenance activities conducted by the provider. It includes details on support hours, response times, and escalation procedures. By defining support and maintenance processes, the SLA ensures that clients receive timely assistance and that service disruptions are minimized.

7. Incident Management

Incident management describes how service disruptions and incidents are handled. It includes procedures for reporting incidents, the classification of incidents based on severity, and the response and resolution times for each classification. This clause ensures that there is a clear and efficient process for addressing service issues, minimizing their impact on the client. It also provides transparency into how incidents are managed and resolved.

8. Responsibilities of the Service Provider

This clause outlines the responsibilities and obligations of the service provider. It includes ensuring service availability, providing timely support, maintaining service performance, and complying with the terms of the SLA. By clearly defining the provider’s responsibilities, the SLA ensures accountability and helps maintain a high standard of service.

9. Responsibilities of the Client

The responsibilities of the client clause details the obligations of the client to facilitate the provision of services. This may include providing necessary access to systems, reporting issues promptly, and complying with agreed procedures. Clear client responsibilities help ensure that the service provider can deliver the services effectively and without unnecessary delays.

10. Service Monitoring and Reporting

Service monitoring and reporting outline how the service performance will be tracked and reported. It includes the tools and methods used for monitoring, the frequency of reporting, and the metrics included in the reports. Regular monitoring and reporting ensure transparency and help both parties assess the performance of the service. This clause helps identify any issues early and allows for timely corrective actions.

11. Remediation and Penalties

This clause details the remedies and penalties if the service provider fails to meet the agreed performance standards. It may include service credits, financial penalties, or other compensatory measures. By defining remediation and penalties, the SLA provides a clear framework for addressing service failures and holding the provider accountable. This helps ensure that the provider is motivated to maintain a high level of service.

12. Termination and Renewal

The termination and renewal clause outlines the conditions under which the SLA can be terminated or renewed. It includes the notice periods required, the process for termination, and any conditions for automatic renewal. This clause ensures that both parties understand their rights and obligations regarding the continuation or termination of the agreement. It provides clarity and helps manage the end-of-contract process smoothly.

13. Confidentiality and Data Protection

Confidentiality and data protection clauses are critical in an SLA to ensure that sensitive information is protected. This section details how client data will be handled, stored, and protected, and outlines the obligations of the service provider regarding confidentiality. It ensures compliance with relevant data protection laws and builds trust between the parties by safeguarding sensitive information.

14. Dispute Resolution

The dispute resolution clause outlines the process for resolving any disputes that may arise between the parties. It includes the steps to be taken for informal resolution, as well as formal procedures such as mediation or arbitration. By defining a clear dispute resolution process, the SLA helps manage conflicts efficiently and reduces the likelihood of lengthy and costly legal proceedings.

15. Force Majeure

The force majeure clause addresses situations where the service provider is unable to meet the SLA terms due to unforeseen events beyond their control, such as natural disasters, war, or pandemics. This clause outlines the conditions under which force majeure can be invoked and the obligations of the provider in such circumstances. It provides a level of protection for the service provider while ensuring that the client is informed of any service disruptions.

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Creating a comprehensive Service Level Agreement requires careful consideration of various key clauses to ensure that both parties’ expectations and responsibilities are clearly defined. By including detailed sections on service performance, availability, support, incident management, responsibilities, monitoring, remediation, termination, confidentiality, dispute resolution, and force majeure, an SLA can provide a robust framework for managing the client-provider relationship and ensuring a high standard of service.

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