What is a Service Level Agreement? 

A service-level agreement (SLA) simply means the contract or agreement that exists between a service provider and the end user or client. SLAs refer to outputs from a service provider that the customer is expected to receive. SLA describes the agreement and commitment to quality service, availability of service and fulfillment of responsibilities between a service provider and a customer. Whether it is an internal or external service provider, it is expected that the services and responsibilities included in the contract are met.

How is a Service-Level Agreement Used?

A service-level agreement can be a legal contract or informal agreement binding the relationship between service providers and their customers. SLAs define what a customer is expected to get from a service provider in a business agreement. However, any service rendered that is not in alignment with the contract between the service provider and the client is not a SLA. The main focus of the service level agreement is the output received by the customer as a result of the service provided. SLAs can occur at different levels which include;

• Service-based SLA: this is an agreement for all customers using a specific service, good examples are services provided by a mobile phone/service provider or a service provided by an email system that an organization uses.
• Customer-based SLA: unlike the service-based SLA, this type of SLA is customer specific. It is an agreement between individual customers.
• Corporate-level SLA: this is generic, it covers the agreement between a service provider and a corporate organization.

Other common levels of SLAs are multi level SLA, service-based SLA, customer-level SLA among others. There are some major components of Service Level Agreements, these include;

• The definition of services that a customer is entitled to.
• The specifics of services to be provided by the service provider without leaving any detail.
• The reliability and responsiveness of the SLA.
• Monitoring of SLA and periodic reports on its effectiveness.
• Modifications for reporting issues with the services provided.
• Response time-frame from the service provider on the complains by the customer.
• Periodic check on issues and time-range of when they will be resolved.
• Consequences of failure to keep to the terms and conditions of SLAs both by the customer and the service provider.
• The period for termination of service agreement.

Common metrics

There are certain metrics associated with service-level agreements, these metrics constitute the mode of operations and corresponding service-level objectives exhibited in service-level agreements. The common metrics of service level agreements include;

• The time taken to complete a task during the phase of a project (TAT; Turn-around Time)
• Time taken to recover after an outage of service. (MTTR; Mean Time to Recover)
• The percentage of calls answered within a time-frame (TSF; Time-service factor)
• The percentage of calls abandoned otherwise called (Abandonment Rate).
• The percentage of incoming calls that can be resolved without the caller calling back the helpdesk. (FCR; First-Call Resolution)

Related Topics

• Contract Law (Intro)

• What is a Contract?
• Contract Theory Definition
• Meeting of the Minds
• Doctrine of Utmost Good Faith 
• Aleatory Contract Definition
• What are the sources of contract law?
• Restatement of Contracts
• Uniform Commercial Code
• Convention on Contracts for the International Sale of Goods (CISG) 

• What is a Unilateral Contract vs a Bilateral Contract?
• What is an Express Contract vs an Implied Contract?
• What are the requirements to form a Contract (Offer, Acceptance, Consideration)?
• What is an Enforceable Contract vs. a Valid Contract?
• What is a Void Contract vs a Voidable Contract?
• Adhesion Contract 
• What is Mental Capacity to contract?
• What is the requirement of a Lawful Purpose?
• What are common types of Voidable Contract?

• What is an Offer?
• Sum Certain (Contracts) Definition

• When does an offer to contact terminate?
• Counterparty Definition
• Mirror Image Rule?
• Rule for Sale of Goods
• Silence is Not Acceptance?
• Mailbox Rule
• Shrink-wrap Agreement Definition
• Click-Wrap Agreement Definition
• What is Consideration?
• What is Promissory Estoppel?
• When is a contract required to be in writing Statute of Frauds?
• What type of writing satisfies the statute of frauds?
• Exceptions to the Statute of Fraud
• Documents Under Seal
• Who Can Sign Contracts on Behalf of a Company?
• E-Sign Act
• Privity of Contract
• Who are third-party beneficiaries to a contract?
• What is assignment and delegation of a contract?

• When is a party's Duty of performance?
• Aleatory Contract
• What is an Executed contract vs an Executory contract?
• Inchoate Definition
• Evergreen Contract

• What is Performance, Substantial Performance, and Breach of a contract?
• What is performance of a Divisible Contract?
• When is a party's duty of performance discharged?
• What are conditions to Contract (Precedent & Subsequent)?
• Abandonment Option (Contract) Definition
• Cooling Off Rule Definition
• What is tender performance of a contract?
• What are Impossibility and Impracticability
• What is a Frustration of Purpose?
• Waiver or Release from Contract
• Accord and Satisfaction
• Force Majeure Clause
• Novation
• What is a Breach of Contract?
• Repudiation (Contract) Definition
• Anticipatory Repudiation
• Acceleration Clause (Contracts) Definition
• What methods exist for resolving a breach?
• Assumpsit
• What remedies exist for a breach of contract?
• Rescission (Contract)
• Exculpatory Clause
• Hold Harmless Clause
• What is Efficient Breach?
• Organization of a Contract
• How to Read the Contract
• Boilerplate
• Contract Representations & Warranties
• Contract Covenants
• What rules does a court follow in interpreting a contract?
• Addendum 
• Allonge Definition
• What is the Parol Evidence Rule?
• What is a complete integration vs a partial integration?
• Exceptions to the Parol Evidence Rule
• Patent and Latent Ambiguity in a Contract
• Service Level Agreement Definition 
• Offtake Agreement