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Service Level Agreement (SLA)

Define and enforce service standards, uptime commitments, and remedies with a clear SLA

What is Service Level Agreement (SLA)?

An SLA sets measurable service standards — uptime, response time, resolution time — and specifies the remedies (service credits, termination rights) when standards are not met. We draft SLAs for SaaS providers, IT service companies, cloud vendors, and managed service providers.

A Service Level Agreement is a supplement to (or a section within) a Master Service Agreement that defines specific, measurable service standards and the consequences of failing to meet them. For SaaS and cloud services, key metrics include uptime percentage (commonly 99.9%), incident response time, resolution time, and scheduled maintenance windows. An SLA must be specific enough to be enforceable — vague commitments like "best efforts" are not. It must also specify the remedy: typically service credits (a percentage of monthly fees) for each breach, and a right to terminate if credits exceed a threshold. Drafting an SLA requires balancing customer assurance against realistic operational commitments. A poorly set SLA that the service provider cannot consistently meet becomes a source of constant commercial friction and potential penalties. The starting point should always be the provider's actual operational baseline — real uptime data, real support team capacity — before committing to contractual numbers. An SLA drafted from aspirational numbers, rather than real performance data, creates legal exposure and erodes customer trust when commitments are missed repeatedly.

Who Needs Service Level Agreement (SLA)?

SaaS platforms, cloud infrastructure providers, IT managed service companies, data centre operators, and any business that provides services subject to measurable availability or response-time commitments.

What's Included

  • Uptime and availability metrics realistically set (99.9% = ~8.7 hours downtime per year)
  • Response and resolution times tiered by severity (critical, high, medium, low)
  • Service credit formula that is fair but not punitive
  • Exclusions for force majeure, scheduled maintenance, and client-caused incidents
  • Measurement methodology — how uptime is measured and by whom

⚠️ Penalty for Non-Compliance

Without an SLA, clients have no contractual basis to claim compensation for downtime or poor service. Without defined remedies, your liability for outages is unlimited and uncertain.

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How It Works

  1. 1

    Review your operational baseline

    We review your actual uptime data, support capacity, and incident response process before committing to numbers — unrealistic SLA commitments cost more than no SLA.

  2. 2

    Define metrics and tiers

    We define the metrics (uptime, MTTR, MTBF), severity tiers, and the remedies for each breach.

  3. 3

    Draft the SLA

    The SLA is drafted as a standalone document or as a section of the MSA, ready to attach to each new client agreement.

  4. 4

    Review and finalise

    You review the SLA and we adjust any metrics or remedies before execution.

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Documents Required

Items marked Required are mandatory; others are situational.

Service details

  • Description of the service and componentsRequired
  • Current uptime data or infrastructure specs
  • Support team hours and structure
  • Any client RFP or procurement requirements
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Fees & Pricing

Fees

Government fee

No registration required

Free

Professional fee

Quoted after reviewing your service model and infrastructure baseline

Varies

* Government fees may vary. GST applicable on professional fees. Final pricing confirmed after review.

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Frequently Asked Questions

What uptime percentage should I commit to?

99.9% (three nines) allows about 8.7 hours of downtime per year and is a common commercial standard for SaaS. 99.95% allows about 4.4 hours. 99.99% (four nines) allows about 52 minutes and requires highly redundant infrastructure.

What is a service credit?

A service credit is a discount or rebate on future fees, applied when the provider misses an SLA metric. It is not a cash payment. Credits are typically calculated as a percentage of the monthly fee proportional to the severity and duration of the breach.

Can clients claim unlimited damages for an SLA breach?

Only if the SLA or MSA allows it. A well-drafted SLA specifies that service credits are the sole remedy for SLA breaches (unless there is gross negligence or wilful default), protecting the provider from unlimited liability.

What is excluded from uptime calculations?

Scheduled maintenance windows, force majeure events, incidents caused by the client's configuration or third-party integrations, and third-party infrastructure failures are typically excluded. These carve-outs must be explicit.

Does an SLA apply per customer or globally?

Per customer. Each customer's SLA entitlement is measured for their specific account. A global outage that affects all customers triggers the SLA for each affected account.

Can I have different SLA tiers for different pricing plans?

Yes — enterprise tiers commonly carry higher SLA commitments and faster response times. A tiered SLA is a legitimate commercial and technical differentiation.

Detailed guides for Service Level Agreement (SLA)

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Checklist

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Fees

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Service Level Agreement (SLA)

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