Legal Agreements

Sample Format of Service Agreement (SLA)

A Service Agreement is a written understanding between two or more parties wherein one party agrees to provide the services to another party. The purpose of drafting a Service Level Agreement is to define what the customer or end-user will receive from the service provider. It does not define how the service will be provided or delivered to the end-user. It is an important document as it sets the expectations and boundaries in advance.

WHY IS SERVICE AGREEMENT IMPORTANT?

• Visibly spelled-out service days and hours and contact information
• Clearly defined problem severity levels
• Reaction and resolution time targets for each severity level
• What happens when a time target is missed
• How problems are “escalated” to personnel with higher levels of expertise.
• It clearly mentions the area that the provider guarantees to perform.
• It is reliable as timely and regular services are made available.
• A proper procedure is available to resolve the issue in case of any problem.

WHAT ARE THE TYPES OF SLAs?

Depending upon the level or sort of services, the common predefined types of SLAs are:-

• Customer-based SLA:
  

This type of Service Level Agreements is that agreement which is made with an individual customer group, covering all the services the customer uses. It is detailing the nature, and quality of the service to be provided.

• Service-based SLA:
  

This agreement is made targeting the customers using the services offered by a particular service provider.

• Multi-level SLA:
  

The multi-level SLA^[1] is split into three different levels, each addressing a particular set of customers for a service, in an SLA.

• Corporate-level SLA:
  

It covers all the generic service level management issues appropriate to every customer throughout the organization with whom the agreement is made. These issues are likely to be less volatile and so the SLA informs are not required frequently.

• Customer-level SLA: This type of agreement covers all service issues related to a particular set of customers, despite the services that they use.
• Service-level SLA: It covers all issues relevant to any specific service, in relation to a particular set of customers.

Necessary Points required to be disclosed

The SLA Agreement generally discloses on the following:-

1. Definitions and interpretations:
   

SLA Agreement must disclose the important definitions and must define the technical or legal terms used in the agreement; like Administrative Services”, “Confidential Information” Facilities” etc. It is the only documents which creates the expectations and the boundaries between the parties enter into a contract.

1. Terms of Agreement:
   

The agreement must specify the date of when the agreement shall become effective and the tenure till the agreement shall be in force.

When the agreement shall be binding on the parties.

Either Party may terminate this Agreement following the giving of [NUMBER] calendar days prior written notice of termination to the other Party.

1. Financial Provisions:
   

• The recipient shall pay to the Service Provider a non-recurring fee for his services like; Site Preparation, Additional AC or DC Power Circuits and Circuit Interconnection at each of the Service Provider Network Location(s) as set forth in the Non-Recurring and Monthly Recurring Pricing Summary.
• Recipient shall pay Service Provider on a monthly recurring basis for Location Management Fee(s), an Uninterruptable Power Supply (UPS) for [115V OR OTHER] AC Power Circuits and for Service Provider First-Level Maintenance Support at each of the Service Provider Network Location(s) as set forth in the Non-Recurring and Monthly Recurring Pricing Summary.
• The recipient shall pay Service Provider a onetime charge of [AMOUNT per circuit when, at the Recipient’s request, Service Provider provided cabling is added, moved or changed after the initial Site Preparation work listed in the Equipment and Location Summary is completed by Service Provider.
• For equipment moves made pursuant to Recipient’s request, Recipient shall pay for each unit of Equipment this is moved to a different location within the same Service Provider Network Location after the initial Site Preparation work listed in the Equipment and Location Summary is completed by Service Provider.
• The recipient shall pay directly or reimburse Service Provider, as applicable, for all taxes, duties, and similar liabilities which may result from this Agreement, or any support services specified hereunder, exclusive of taxes based on Service Provider’s net income.
• All invoices shall be due and payable in [CURRENCY] within [NUMBER] calendar days upon receipt as set forth in the Non-Recurring and Monthly Recurring Pricing Summary.

• Nondisclosure of Confidential Information
  

• The parties hereby agree that any Confidential Information provided to the Recipient by the Disclosing Party hereunder shall remain the exclusive property of the Disclosing Party.
• The Recipient agrees that it will maintain all Confidential Information in strict confidence and that it will not permit whether directly or indirectly the Confidential Information in its possession to be disclosed to or allowed access to by any third party or used for any purpose without the prior written consent of the Disclosing Party.
• The Recipient shall not permit any employee, director, officer, agent, representative or affiliate to have access to the Confidential Information unless such employee, director, officer, agent, representative or affiliate (a) needs to know the Confidential Information for the purposes of this Agreement, (b) has been informed of the confidential nature of the Confidential Information, and (c) agrees to act in accordance with the terms and conditions set out in this Article.
• The Confidential Information shall not be reproduced in any form or stored in a retrieval system or database without the permission of the Disclosing Party in writing, except as required for the execution of activities agreed upon between the parties.
• Upon termination of this Agreement, in whole or in part, the Recipient shall, upon request, forthwith return to the Disclosing Party all Confidential Information, including all documents and information which contain Confidential Information of the Disclosing Party in the possession of the Recipient.

• Miscellaneous:
  

In addition to the above major clauses, Service Level Agreement also covers the following clauses to make the SLA transparent and unambiguous.

Other clauses are as follows:-

• Arbitration
• Notice
• Amendments And Waiver
• Compliance With The Law
• Governing Law
• Severability
• Guarantees
• Jurisdiction
• Indemnity