Service level agreement (SLA)

A service level agreement, often referred to by the acronym SLA, is the part of an IT contract that sets the provider’s measurable commitments on service quality: availability, performance, response and resolution times for incidents. It appears in SaaS agreements, the hosting agreements, outsourcing agreements and IT maintenance agreements. The service level agreement turns a general promise of quality into verifiable obligations.

The content of the service level agreement

First, the indicators: monthly or annual availability rate, application response time, guaranteed response time and guaranteed restoration time according to the severity of the incident, support hours. Next, the measurement method: tools, reference period, periodic reports, dispute procedure. Then the exclusions: scheduled maintenance, incidents attributable to the customer or to third parties, force majeure. Finally, the consequences of breach: penalties, service credits, right of termination for repeated or serious breaches.

The legal effect of penalties

Penalties provided for in a service level agreement are generally analysed as a penalty clause within the meaning of Article 1231-5 of the Civil Code. The judge may reduce or increase them if they are manifestly excessive or derisory. The contract often states that penalties are in full discharge and capped, which excludes any other compensation for the same breach. The customer has an interest in reserving its right to additional damages for gross negligence and in providing for a right of termination. The texts can be consulted on Légifrance.

Key points

In practice, a service level agreement is only worth something if it is measured and monitored. The customer must demand reports, dispute measurements within the deadlines and document incidents. The provider must ensure consistency between the commitments made to the customer and those obtained from its own subcontractors and hosts. The firm drafts and negotiates these clauses and acts in service level disputes, as presented on the page contracts.