Service-Level Agreement Template
About the agreement
This Service-Level Agreement (this “Agreement” or this “Service Level Agreement”), effective as of [ Effective date] (“Effective Date”) is made by and between [Client.Company], a company organized and existing in [Client.State] with offices located at [Client.Address] (“Customer”) and [Supplier.Company], a company organized and existing in [ Supplier.State] with offices located at [Supplier.Address] (“Supplier”).
WHEREAS, the Parties have entered into an agreement effective as of [ Effective date] (the “Contract”) for the provision by Supplier of the Services (as defined therein) (the “Services”); and
WHEREAS, the Contract states that a service-level agreement is a condition precedent to any extended term of the Contract; and
WHEREAS, the Customer is willing to continue with the Contract past the original end date solely upon Supplier’s acceptance of the terms and conditions of this Agreement, and Supplier confidently accepts the terms and conditions herein;
NOW, THEREFORE, in consideration of the foregoing, and of the terms and conditions and the Service Levels, the Parties hereby agree as is outlined in the following sections:
1. Rider Agreement
When signed, this Agreement will form a part of the Contract, and upon signing this Agreement, the Contract shall be automatically changed, in accordance with its terms, from a monthly contract to a yearly contract. All capitalized terms not defined herein shall have the meanings ascribed to them in the Contract.
- [ Client.Company] must provide all of the necessary information and assistance-related needs for service performance that allows the [ Supplier.Company] to meet the service level standards as outlined in this agreement.
- [ Client.Company] shall inform [ Supplier.Company] if there are any business changes that may require a review, modification, or amendment of the service-level agreements.
- [ Supplier.Company] acts as the primary provider of the services that are identified in this agreement, except if outsourcing is done to a third-party vendor. In that case, the third party assumes any support responsibilities that align with their services.
- [ Supplier.Company] will communicate with [ Client.Company] if there are scheduled or unscheduled service outages that happen because of maintenance, troubleshooting, disruptions, or as otherwise necessary.
3.Service Levels & Service Credits
The Supplier shall at all times during the term of this Agreement provide the Services to meet or exceed the Service Level Performance Measure for each Service Level Performance Criterion, as defined herein below.
The Supplier acknowledges that any failure to meet a Service Level may have a material adverse impact on the business and operations of the Customer, and that it shall entitle the Customer to the rights set out in this Agreement below, including the right to any Service Credits (as defined below).
The Supplier acknowledges and agrees that any Service Credit is a price adjustment reflecting the value of any lost service caused by failure to meet a Service Level. Both Parties agree that the Service Credits are a reasonable method of price adjustment to reflect poor performance.
Other than the Customer’s termination rights as set forth in the Contract, a Service Credit shall be the Customer’s exclusive financial remedy for a failure to meet a Service Level.
4. Performance Monitoring
The Supplier shall implement all measurement and monitoring tools and procedures necessary to measure, monitor, and report on the Supplier’s performance of the provision of the Services against the applicable Service Levels at a level of detail sufficient to verify compliance with the Service Levels.
The Supplier shall immediately notify the Customer in writing if the level of performance of the Supplier of any element of the provision by it of the Services during the term of the Contract is likely to or fails to meet any Service Level Performance Measure.
Objectives provide measurable steps for reaching your business goals. They set a basis for each strategy and tactic used. The objectives of the Service Levels and Service Credits are to:
- Ensure that the Services are of a consistently high quality and meet the requirements of the Customer;
- Provide a mechanism whereby the Customer can attain meaningful recognition of the Supplier’s failure to deliver the level of service for which it has contracted to deliver; and
- Incentivize the Supplier to comply with and to expeditiously remedy any failure to comply with the Service Levels.
6. Service Levels
Service levels are the actionable items you can complete for your client or partners. Each one needs to be measurable so that results are accurate and easy for your clients or partners to understand. Items you may include in your SLA metrics include:
Our peak hours are between 7:00 a.m-6:00 p.m. PST Monday thru Friday. The second most busy times are 8:00 a.m.-1 p.m. PST Saturday and Sunday. We guarantee an uptime of 99% during these hours yearlong. For each tenth of a percent that we fall below this guarantee, we credit your account the equivalent of how much you spend on our service partnership.
7. Service Exceptions and Limitations
The Supplier may need to outline exceptions to your service level agreements in the Contract that apply to certain regions or times of the year. For example, if The Supplier provides a technology service that can be impacted by natural disasters, The Supplier may exclude those downtimes from your SLA.
8. Service Credits
The Supplier is required to pay Service Credits in the event that the Service Level achieved falls below the Service Level Performance Measure in a Service Period.
The Service Credit is determined by the Service Level achieved, the Service Level Performance Measure, and the Service Level Threshold is calculated by using the straight line formula below:
Our team uses the following method to calculate your service credits for each SLA outlined in our contract:
- We assign a comparative price for each SLA based on how much you spend on the entire agreement.
- We divide the comparative price by 100 to determine the cost per percentage point for each outlined SLA.
- We assign a service credit amount per percentage or tenth of a percentage that is payable below the threshold of the agreed upon terms.
Service credits owed are calculated on a quarterly basis.
IN WITNESS WHEREOF, by execution by the parties below, this Service-Level Agreement will form a part of the Contract.
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