Service Level Agreement

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What is Service Level Agreement?

  • A service level agreement is an agreement between the service provider and the customer. Service level agreement is output based specifically to define what the customer will receive. Thus, it is a legal necessary paper between the service provider and the user of service; it defines the nature, quality, and scope of the service to be provided.

What are the types of Service Level Agreements?

What are the types of Service Level Agreements?

Service Level Agreement can be defined at different levels and differentiated in types:

  • Customer-Based Service Level Agreement
  • Service-Based Service Level Agreement
  • Multi-level Service Level Agreement
  • Customer-Based Service Level Agreement

    Usually this form of service level agreements covers all types of individual groups of customers. Such customers would be different types of individuals. A typical example of this type of agreement would be an agreement between a Wi-Fi provider and a customer. The Wi-Fi provider has to provide specific standards of Wi-Fi services to the customer.

  • Service-Based Service Level Agreement

    between a large number of customers using a particular service and the service provider. For example, an SLA between a telecom service provider and all its customers using a particular service from the provider.

  • Multi-level Service Level Agreement

    is divided into levels for directed towards different sets of customers for the same services, in the same SLA:

    1. Corporate Level covering all the issues which are same for the entire organization.

    2. Customer level covering the entire issues specific to a customer. Service Level covering all the entire issues relating to a specific service.

    Service Level Agreement is one of the foundational agreements between the service providers with the customer. Between the Master Service Agreement which establishes the general terms and conditions and SLA, the SLA adds greater specificity regarding the services provided.

Advantages of Service Level Agreement

A Service Level Agreement (SLA) is important for both the person providing a service and the one receiving it. It serves as a final word. By this, both the parties play very close attention to the details making it so there is no confusion.

All the services that the customer needs are included in the SLA. This means that the customer knows what to expect in terms of quality of service and other certain parameters are defined, making it a necessary necessary paper.

Why is a Service Level Agreement essential?

Service Level Agreement (SLA) is important for the reason that it states following:

  • Clear and unambiguous details of the service are provided with service days and hours;
  • Defines the problem that might occur and their gravity, also providing the reacting time;
  • The consequences of missing targets;
  • SLA lays down the customer rights and penalties in case of non-performance which ensures that the relationship between the customer and the service provider remains clear and positive;
  • What is the procedure, hierarchy and the expertise of the service provider;
  • It mentions the guaranteed areas in which the service shall be provided and what shall be exempted;
  • What is the method of problem resolving;
  • SLA defines the commitments made to and by the customers and well-defined indicators for the customer service which minimizes the chances of disappointing the customer and keep a check of levels of customer satisfaction.

What terms does a Service Level Agreement include?

A well-drafted SL Agreement generally discloses the following:-

  • Definitions and interpretations of the terms used in the agreement- What are the terms utilised in a typical service level agreement.
  • Scope of SLA- What does the agreement cover and what are the services provided in the Service Level Agreement.
  • Duration of the SLA- How long the SLA is operational. Will the SLA be operational for only one particular period of time? Here also the renewals of the SLA would be mentioned.
  • Reliability- How many parties would rely on this agreement and what are the conditions related to breach of this agreement.
  • Customer support arrangements- Usually a SLA would be between one service provider and many customers. Hence it would be crucial to mention the amount of support and level of support provided in the SLA.
  • Point of Contact, escalation and a communication matrix- If there are some forms of disagreements in the SLA then what the point of contact of the SLA should be determined.
  • Mutual Responsibilities- Under this clause the responsibilities of the parties of the Service Legal Agreement would be stated.

Financial Provisions

  • Payment of recurring fee- Such would indicate the fee which has to be paid by the customer to the service provider.
  • Monthly fee- Monthly fee would be the fee that is paid every month to the service provider by the customer.
  • One time charges- One time charges which would have to be paid by the customer to the service provider. Such fees will include any form of deposit which is paid by the customer to the service provider.
  • Reimbursements- Reimbursements would include any form of service which is reimbursed by the service provider. This would be the case if the customer takes any form of trouble in rectifying the systems.
  • Miscellaneous fee- Any additional fee would be considered as miscellaneous fee.
  • Format of Invoice- The invoice would have to be provided in a particular format by the service provider to the customer.
  • Term period of payment- This would include any term which has the period of payment for the service.
  • Clause for Non-Disclosure of Confidential information- There has to also be included a clause for Non-Disclosure of Confidential information. This clause would be operative both ways for the service provider and the customer. Information which is provided by the customer to the service provider would be sensitive and personal.

Miscellaneous Provisions

  • Arbitration- What would be the method for dispute settlement. Whether the parties would utilise Arbitration, conciliation or alternative dispute resolution.
  • Notice- Any form of notice must be provided by one party to another party in writing.
  • Amendments And Waiver- If there is any form of amendments in this agreement, then notice of the same must be provided to the other party. Situation such as the waiver must also be present in the SLA. If this clause is utilized by the party then the all their rights with respect to the agreement would be waived.
  • Compliance with the Law- The parties of the agreement have to comply with the provisions of the law. All the rules must be effectively followed by the parties.
  • Governing Law- This would indicate the law that affects the service level agreement. The courts and jurisdiction would also be affected by such governing law.
  • Jurisdiction- Jurisdiction would include the place at which the parties have to settle the matter related to the dispute.
  • Warranties and Guarantees- For a particular type of product and service, there will be particular different forms of warranties and guarantees. Warranties would be related to the products which are offered or the services offered. Guarantees would be in the form of a third-party assurance for the services provided in the SLA.
  • Indemnity- Such provision would state that one party would indemnify the other party in case of any loss or breach caused as a result of the agreement.
  • Severability- This clause would state on which occasions would the agreement be severable.

Procedure to Draft a Service Level Agreement

  • A well efficient lawyer from our team shall contact you, and explain you the total process, and will understand the need of Service Level Agreement by you.
  • Once the objectives of the same are clear, the lawyer shall draft a sample Service Level Agreement accordingly.
  • The draft Service Level Agreement shall be sent to you, for your review.
  • The whole process takes around 3-4 working days.

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Frequently Asked Questions

A service level agreement is a contract between the customer and the service provider. Usually through this agreement the levels of service would be stated.

SLA or known as the Service Level Agreement would be a contract or agreement between the service provider and the customer. However, the master service agreement would be a contract between two or more companies or entities to carry out services as per the conditions agreed in the agreement. The conditions would be usually agreed between the parties that govern future contracts.

Employment Agreement is the contract between the employee and the company that governs the relationship which the employee has with the company. However, the SLA would determine the relationship between the customer and the service provider.

Yes it is crucial to have a SLA. The SLA would define the quality of service which is provided by the service provider to the customer. It would be crucial to have this form of agreement.

At Enterslice, our professionals and lawyers would assist you in drafting the Service level agreement. All the terms and provisions related to the SLA must be included in the agreement.

Usually the services which have to be covered by the SLA would be on the agreement. Depending on the requirement, the services have to be covered.

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