Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Find a Job
  • Tutoring
  • Home
  • Law, Transactions, & Risk Management
  • Commercial Law: Contract, Payments, Security Interests, & Bankruptcy

Service Level Agreement - Explained

What is a Service Level Agreement?

Written by Jason Gordon

Updated at April 5th, 2023

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

What is a Service Level Agreement? 

A service-level agreement (SLA) simply means the contract or agreement that exists between a service provider and the end user or client. SLAs refer to outputs from a service provider that the customer is expected to receive. SLA describes the agreement and commitment to quality service, availability of service and fulfillment of responsibilities between a service provider and a customer. Whether it is an internal or external service provider, it is expected that the services and responsibilities included in the contract are met.

Back to: MARKETING, SALES, ADVERTISING, & PR

How is a Service-Level Agreement Used?

A service-level agreement can be a legal contract or informal agreement binding the relationship between service providers and their customers. SLAs define what a customer is expected to get from a service provider in a business agreement. However, any service rendered that is not in alignment with the contract between the service provider and the client is not a SLA. The main focus of the service level agreement is the output received by the customer as a result of the service provided. SLAs can occur at different levels which include;

  • Service-based SLA: this is an agreement for all customers using a specific service, good examples are services provided by a mobile phone/service provider or a service provided by an email system that an organization uses.
  • Customer-based SLA: unlike the service-based SLA, this type of SLA is customer specific. It is an agreement between individual customers.
  • Corporate-level SLA: this is generic, it covers the agreement between a service provider and a corporate organization.

Other common levels of SLAs are multi level SLA, service-based SLA, customer-level SLA among others. There are some major components of Service Level Agreements, these include;

  • The definition of services that a customer is entitled to.
  • The specifics of services to be provided by the service provider without leaving any detail.
  • The reliability and responsiveness of the SLA.
  • Monitoring of SLA and periodic reports on its effectiveness.
  • Modifications for reporting issues with the services provided.
  • Response time-frame from the service provider on the complains by the customer.
  • Periodic check on issues and time-range of when they will be resolved.
  • Consequences of failure to keep to the terms and conditions of SLAs both by the customer and the service provider.
  • The period for termination of service agreement.

Common metrics

There are certain metrics associated with service-level agreements, these metrics constitute the mode of operations and corresponding service-level objectives exhibited in service-level agreements. The common metrics of service level agreements include;

  • The time taken to complete a task during the phase of a project (TAT; Turn-around Time)
  • Time taken to recover after an outage of service. (MTTR; Mean Time to Recover)
  • The percentage of calls answered within a time-frame (TSF; Time-service factor)
  • The percentage of calls abandoned otherwise called (Abandonment Rate).
  • The percentage of incoming calls that can be resolved without the caller calling back the helpdesk. (FCR; First-Call Resolution)

Related Topics

  • Contract Law (Intro)
  • What is a Contract?
  • Contract Theory Definition
  • Meeting of the Minds
  • Doctrine of Utmost Good Faith 
  • Aleatory Contract Definition
  • What are the sources of contract law?
  • Restatement of Contracts
  • Uniform Commercial Code
  • Convention on Contracts for the International Sale of Goods (CISG) 
  • What is a Unilateral Contract vs a Bilateral Contract?
  • What is an Express Contract vs an Implied Contract?
  • What are the requirements to form a Contract (Offer, Acceptance, Consideration)?
  • What is an Enforceable Contract vs. a Valid Contract?
  • What is a Void Contract vs a Voidable Contract?
  • Adhesion Contract 
  • What is Mental Capacity to contract?
  • What is the requirement of a Lawful Purpose?
  • What are common types of Voidable Contract?
  • What is an Offer?
  • Sum Certain (Contracts) Definition
  • When does an offer to contact terminate?
  • Counterparty Definition
  • Mirror Image Rule?
  • Rule for Sale of Goods
  • Silence is Not Acceptance?
  • Mailbox Rule
  • Shrink-wrap Agreement Definition
  • Click-Wrap Agreement Definition
  • What is Consideration?
  • What is Promissory Estoppel?
  • When is a contract required to be in writing Statute of Frauds?
  • What type of writing satisfies the statute of frauds?
  • Exceptions to the Statute of Fraud
  • Documents Under Seal
  • Who Can Sign Contracts on Behalf of a Company?
  • E-Sign Act
  • Privity of Contract
  • Who are third-party beneficiaries to a contract?
  • What is assignment and delegation of a contract?
  • When is a party's Duty of performance?
  • Aleatory Contract
  • What is an Executed contract vs an Executory contract?
  • Inchoate Definition
  • Evergreen Contract
  • What is Performance, Substantial Performance, and Breach of a contract?
  • What is performance of a Divisible Contract?
  • When is a party's duty of performance discharged?
  • What are conditions to Contract (Precedent & Subsequent)?
  • Abandonment Option (Contract) Definition
  • Cooling Off Rule Definition
  • What is tender performance of a contract?
  • What are Impossibility and Impracticability
  • What is a Frustration of Purpose?
  • Waiver or Release from Contract
  • Accord and Satisfaction
  • Force Majeure Clause
  • Novation
  • What is a Breach of Contract?
  • Repudiation (Contract) Definition
  • Anticipatory Repudiation
  • Acceleration Clause (Contracts) Definition
  • What methods exist for resolving a breach?
  • Assumpsit
  • What remedies exist for a breach of contract?
  • Rescission (Contract)
  • Exculpatory Clause
  • Hold Harmless Clause
  • What is Efficient Breach?
  • Organization of a Contract
  • How to Read the Contract
  • Boilerplate
  • Contract Representations & Warranties
  • Contract Covenants
  • What rules does a court follow in interpreting a contract?
  • Addendum 
  • Allonge Definition
  • What is the Parol Evidence Rule?
  • What is a complete integration vs a partial integration?
  • Exceptions to the Parol Evidence Rule
  • Patent and Latent Ambiguity in a Contract
  • Service Level Agreement Definition 
  • Offtake Agreement
service level agreement sla

Was this article helpful?

Yes
No

Related Articles

  • Absolute Auction - Explained
  • Rainmaker - Explained
  • BANT (Marketing) - Explained
  • Priority of Purchase Money Security Interest in Collateral - Explained



©2011-2023. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand