Service Level Agreement Sla Template

SERVICE LEVEL AGREEMENT

This Service Level Agreement ("SLA") is entered into as of the Effective Date, by and between the Parties identified below.

WHEREAS, [Service Provider Legal Name], a corporation duly organized and existing under the laws of [Service Provider Jurisdiction], with its principal place of business located at [Service Provider Address] ("Service Provider"), is engaged in the business of providing [Description of Service Provider's general business];

WHEREAS, [Client Legal Name], a corporation duly organized and existing under the laws of [Client Jurisdiction], with its principal place of business located at [Client Address] ("Client"), desires to engage Service Provider to provide certain services as defined in the Master Services Agreement or Statement of Work referenced herein (the "Underlying Agreement");

WHEREAS, this SLA defines the specific service levels, performance metrics, and remedies associated with the Services provided by Service Provider to Client;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

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1. Document Preamble & Recitals

This Service Level Agreement ("SLA") is made effective as of [Effective Date] ("Effective Date"), by and between:

SERVICE PROVIDER: [Service Provider Legal Name] a corporation organized and existing under the laws of [Service Provider Jurisdiction] with its principal place of business at [Service Provider Address]

AND

CLIENT: [Client Legal Name] a corporation organized and existing under the laws of [Client Jurisdiction] with its principal place of business at [Client Address]

(Service Provider and Client are hereinafter collectively referred to as the "Parties" and individually as a "Party").

This SLA is entered into in conjunction with, and forms an integral part of, the Master Services Agreement dated [Date of Master Services Agreement] (or [Reference to specific Statement of Work or other foundational agreement]) (the "Underlying Agreement"). The terms and conditions of the Underlying Agreement are hereby incorporated by reference into this SLA. In the event of any conflict between the terms of this SLA and the Underlying Agreement, the terms of the [Underlying Agreement / SLA] shall prevail with respect to the specific subject matter of such conflict. This Agreement shall be governed by and construed in accordance with the laws of [Governing Law Jurisdiction].

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2. Operational Definitions

The following capitalized terms shall have the meanings ascribed to them below:

1. "Agreement" means this Service Level Agreement, including all exhibits, schedules, and appendices attached hereto.
2. "Business Day" means any day other than a Saturday, Sunday, or public holiday in [Relevant Jurisdiction for Business Days].
3. "Business Hours" means [Start Time] to [End Time] on a Business Day, in [Relevant Time Zone].
4. "Client System" means any hardware, software, network, or data owned, controlled, or used by Client.
5. "Confidential Information" means all non-public information, including but not limited to technical, business, financial, operational, product, or client information, disclosed by one Party to the other, whether orally, visually, or in writing, that is designated as confidential or would reasonably be understood to be confidential given the nature of the information and the circumstances of disclosure.
6. "Downtime" means any period during which the Services are unavailable or unusable due to a failure attributable to the Service Provider, excluding Planned Maintenance and Force Majeure Events.
7. "Force Majeure Event" means an event beyond the reasonable control of the affected Party, including but not limited to acts of God, war, terrorism, riot, embargoes, acts of civil or military authorities, fire, floods, accidents, strikes, or shortages of transportation, facilities, fuel, energy, labor, or materials.
8. "Incident" means an unscheduled interruption to an IT Service or a reduction in the quality of an IT Service, as further described in [Reference to Incident Management Policy/Exhibit].
9. "Key Performance Indicator (KPI)" means a quantifiable measure used to gauge the success of an organization, employee, or activity in meeting objectives.
10. "Planned Maintenance" means scheduled periods during which Service Provider may interrupt or limit access to the Services for purposes of maintenance, upgrades, or repairs, with prior notice to Client as specified herein.
11. "Resolution Time" means the elapsed time from when an Incident is reported to Service Provider until the Incident is resolved and the affected Service is restored to normal operation.
12. "Response Time" means the elapsed time from when an Incident is reported to Service Provider until Service Provider's personnel acknowledge receipt and begin diagnosis of the Incident.
13. "Service Credit" means a credit applied against future invoices or a payment made by Service Provider to Client as a remedy for failure to meet a Service Level, as detailed in Section 3.7.
14. "Service Level" means a defined performance target or objective for the provision of the Services by Service Provider, as specified in Schedule A (Service Levels).
15. "Services" means the services provided by Service Provider to Client as described in the Underlying Agreement and any SOWs thereunder.
16. "Severity Level" means the classification of an Incident based on its impact and urgency, as defined in Schedule B (Incident Severity Definitions).
17. "Uptime" means the percentage of time during which the Services are operational and available to Client, calculated as [(Total Hours in Period - Downtime Hours) / Total Hours in Period] * 100.

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3. Substantive Terms & Obligations

3.1. Scope of Services

The Services covered by this SLA are those specifically detailed in the Underlying Agreement and any Statement of Work ("SOW") issued thereunder. This SLA exclusively governs the performance standards for the delivery of those Services.

3.2. Service Levels and Performance Metrics

Service Provider shall maintain the Service Levels set forth in Schedule A: Service Levels attached hereto and incorporated herein by reference. Service Provider shall use commercially reasonable efforts to meet or exceed all Service Levels.

3.2.1. Uptime Commitment

Service Provider commits to an Uptime of [Uptime Percentage, e.g., 99.9%] for the Services during each calendar [Month/Quarter], excluding Planned Maintenance and Force Majeure Events.

3.2.2. Incident Response and Resolution

Service Provider shall adhere to the following Response Times and Resolution Times based on the Severity Level of an Incident, as defined in Schedule B: Incident Severity Definitions:

These times are measured during [Service Provider Support Hours, e.g., 24x7 / Business Hours].

3.2.3. Reporting and Review

Service Provider shall provide Client with a [Monthly/Quarterly] performance report detailing actual performance against the Service Levels set forth in Schedule A. This report shall be submitted within [Number] Business Days following the end of the reporting period. The Parties shall meet [Quarterly/Annually] to review performance, discuss any trends, and propose adjustments to Service Levels if necessary.

3.3. Client Responsibilities

Client acknowledges that its cooperation is essential for Service Provider to meet the agreed Service Levels. Client shall: a. Provide accurate and timely information, data, and access to Client Systems as reasonably required by Service Provider for the provision of Services. b. Designate a primary contact person to act as a liaison with Service Provider for incident reporting and service requests. c. Ensure its internal network, systems, and personnel are adequately prepared and maintained to interface with the Services. d. Promptly notify Service Provider of any service degradation or incidents. e. Comply with its obligations under the Underlying Agreement.

3.4. Service Provider Responsibilities

Service Provider shall: a. Dedicate appropriately qualified personnel and resources to provide the Services and meet Service Levels. b. Maintain the necessary infrastructure, systems, and security measures to deliver the Services. c. Provide a single point of contact for technical support requests and incident reporting, available during [Support Hours, e.g., 24x7 / Business Hours]. d. Comply with all applicable laws and regulations in its provision of the Services. e. Maintain appropriate disaster recovery and business continuity plans for the Services, the details of which are outlined in [Reference to DR/BC Plan document/exhibit].

3.5. Planned Maintenance

Service Provider shall provide Client with at least [Number, e.g., 72] hours' prior written notice for any Planned Maintenance that may result in Service interruption. Planned Maintenance shall be scheduled [Frequency, e.g., monthly / quarterly] during [Off-peak hours, e.g., 1:00 AM - 5:00 AM PST on Sundays] and shall not exceed [Number] hours per [Month/Quarter]. Emergency maintenance may be performed with shorter notice if critical to service stability or security.

3.6. Representations and Warranties

Each Party represents and warrants that: a. It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation. b. It has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder. c. The execution and delivery of this Agreement and the performance of its obligations hereunder do not violate any agreement or obligation to which it is a party or by which it is bound. d. It shall comply with all applicable laws and regulations in connection with its performance under this Agreement.

3.7. Service Credits

If Service Provider fails to meet the Uptime Commitment or any other critical Service Level specified in Schedule A in a given [Month/Quarter], Client shall be entitled to receive Service Credits as its sole and exclusive remedy for such failure, unless otherwise expressly provided herein or in the Underlying Agreement.

3.7.1. Service Credit Calculation

Service Credits shall be calculated as a percentage of the [Monthly/Quarterly] Service Fees for the affected Service, according to the schedule below:

The maximum aggregate Service Credits issued in any single [Month/Quarter] shall not exceed [Percentage, e.g., 25%] of the total [Monthly/Quarterly] Service Fees for the affected Services.

3.7.2. Claiming Service Credits

To receive a Service Credit, Client must submit a written claim to Service Provider within [Number, e.g., 30] days of the end of the [Month/Quarter] in which the Service Level failure occurred. The claim must include details of the Service Level failure, including dates, times, and impact. Service Credits will be applied against the next invoice issued to Client.

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4. Default, Termination, and Remedies

4.1. Events of Default

A "Default" shall occur if: a. Material Breach of SLA: Service Provider fails to meet the Uptime Commitment or any other critical Service Level in Schedule A for [Number, e.g., three (3)] consecutive [Months/Quarters], or fails to meet any single critical Service Level by a margin greater than [e.g., 50% of the target] for a single [Month/Quarter]. b. Breach of Underlying Agreement: Either Party commits a material breach of any term or condition of the Underlying Agreement. c. Payment Default: Client fails to pay any undisputed amount due under the Underlying Agreement within [Number, e.g., ten (10)] Business Days after receiving written notice of delinquency from Service Provider. d. Insolvency: Either Party (i) ceases to carry on its business; (ii) becomes insolvent or generally unable to pay its debts as they become due; (iii) files a petition or has a petition filed against it under any bankruptcy, insolvency, or similar law; (iv) makes an assignment for the benefit of creditors; or (v) has a receiver, trustee, liquidator, or similar official appointed for a substantial portion of its assets.

4.2. Notice and Cure Periods

Upon the occurrence of a Default, the non-defaulting Party may, at its option, give written notice to the defaulting Party specifying the nature of the Default.

a. General Defaults: For all Defaults other than those specifically addressed below, the defaulting Party shall have [30] Business Days from the date of receipt of such notice to cure the Default. b. Payment Defaults: For a Default under Section 4.1(c), the Client shall have [10] Business Days from the date of receipt of such notice to cure the Default. c. Critical Service Level Defaults: For a Default under Section 4.1(a), Service Provider shall have [30] Business Days from the date of receipt of such notice to submit and begin executing a remediation plan acceptable to Client. If the remediation plan is not approved, or if Service Provider fails to cure the Default within [60] Business Days from the date of the original notice, it shall constitute an uncured material breach.

4.3. Remedies

If a Default remains uncured after the applicable cure period, the non-defaulting Party shall have the right, in addition to any other remedies available at law or in equity, to: a. Terminate: Terminate this Agreement and the Underlying Agreement, in whole or in part, by providing [Number, e.g., 15] Business Days' written notice to the defaulting Party. b. Service Credits: In the case of Service Level failures, apply Service Credits as provided in Section 3.7. c. Monetary Damages: Seek monetary damages for losses incurred as a direct result of the uncured Default, subject to the limitations of liability set forth in Section 4.4. d. Specific Performance: Where appropriate and permissible by law, seek specific performance of the defaulting Party's obligations.

4.4. Limitation of Liability

EXCEPT FOR [EXCEPTIONS, e.g., BREACHES OF CONFIDENTIALITY, INDEMNIFICATION OBLIGATIONS, OR GROSS NEGLIGENCE/WILLFUL MISCONDUCT], AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW: a. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOST REVENUE, LOSS OF GOODWILL, OR LOSS OF DATA), EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. b. THE AGGREGATE LIABILITY OF [SERVICE PROVIDER / CLIENT] UNDER OR IN CONNECTION WITH THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF STATUTORY DUTY, OR OTHERWISE, SHALL NOT EXCEED THE TOTAL FEES PAID OR PAYABLE BY CLIENT TO SERVICE PROVIDER UNDER THE UNDERLYING AGREEMENT IN THE [Number, e.g., twelve (12)] MONTHS IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM. c. THE REMEDIES SET FORTH IN SECTION 3.7 (SERVICE CREDITS) ARE CLIENT'S SOLE AND EXCLUSIVE REMEDY FOR SERVICE PROVIDER'S FAILURE TO MEET THE SPECIFIED SERVICE LEVELS, EXCEPT IN CASES OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY SERVICE PROVIDER.

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5. Boilerplate Legal Provisions

5.1. Severability

If any provision of this Agreement is found by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable while preserving the intent of the Parties, and the remaining provisions of this Agreement shall remain in full force and effect.

5.2. Entire Agreement

This Agreement, together with the Underlying Agreement and any referenced schedules or exhibits, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, understandings, and communications, whether written or oral, relating to such subject matter.

5.3. Amendments

No modification, amendment, or waiver of any provision of this Agreement shall be effective unless it is in writing and signed by duly authorized representatives of both Parties.

5.4. Waiver

The failure of either Party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that Party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.

5.5. Force Majeure

Neither Party shall be liable for any failure or delay in performing its obligations hereunder (excluding payment obligations) if such failure or delay is caused by a Force Majeure Event, provided that the affected Party: (a) gives prompt written notice to the other Party of the Force Majeure Event (within [Number, e.g., five (5)] Business Days of its occurrence); (b) uses commercially reasonable efforts to mitigate the impact of the Force Majeure Event; and (c) resumes performance of its obligations as soon as reasonably practicable after the Force Majeure Event ceases. If a Force Majeure Event continues for more than [Number, e.g., 30] consecutive days, either Party may terminate this Agreement upon written notice to the other Party.

5.6. Governing Law

This Agreement and any disputes or claims arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the internal laws of the State of [Governing Law State], without regard to its conflict of laws principles.

5.7. Dispute Resolution

a. Informal Resolution: The Parties agree to first attempt to resolve any dispute, claim, or controversy arising out of or relating to this Agreement through good-faith negotiation between their respective management representatives who have authority to settle the dispute. b. Mediation (Optional): If the dispute cannot be resolved informally within [Number, e.g., 30] days, either Party may elect to initiate non-binding mediation with a mutually agreed-upon mediator in [City, State] or via remote means. The costs of mediation shall be shared equally by the Parties. c. Arbitration (Mandatory unless specified otherwise): Any dispute, claim, or controversy arising out of or relating to this Agreement that is not resolved through informal resolution or mediation within [Number, e.g., 60] days, shall be resolved by binding arbitration administered by [Arbitration Body, e.g., the American Arbitration Association ("AAA")] in accordance with its [Relevant Rules, e.g., Commercial Arbitration Rules]. The arbitration shall take place in [City, State]. The award rendered by the arbitrator(s) shall be final and binding upon the Parties, and judgment upon such award may be entered in any court having jurisdiction thereof. The Parties hereby waive any right to a trial by jury. OR Litigation (Default to Court): Subject to Section 5.7(a) and 5.7(b), the Parties irrevocably agree that the courts of [Specific Court, e.g., the State of Delaware and the United States District Court for the District of Delaware] shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims). Each Party irrevocably waives any objection to the laying of venue in such courts and irrevocably waives any claim that such courts are an inconvenient forum. Each Party hereby waives any right to a trial by jury in any action or proceeding arising out of or relating to this Agreement.

5.8. Notices

All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, sent by recognized overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested, to the Parties at their respective addresses set forth in Section 1 or to such other address as either Party may designate by notice to the other Party.

To Service Provider: [Service Provider Legal Name] Attention: [Contact Person Name] [Service Provider Address] Email: [Service Provider Email]

To Client: [Client Legal Name] Attention: [Contact Person Name] [Client Address] Email: [Client Email]

5.9. Assignment

Neither Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding the foregoing, either Party may assign this Agreement in its entirety, without the other Party's consent, to an affiliate or in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets.

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6. Formal Execution Block

IN WITNESS WHEREOF, the Parties have executed this Service Level Agreement as of the Effective Date.

SERVICE PROVIDER:

[Service Provider Legal Name]

By: ___________________________________ Name: [Signatory Name] Title: [Signatory Title] Date: [Date of Signature]

CLIENT:

[Client Legal Name]

By: ___________________________________ Name: [Signatory Name] Title: [Signatory Title] Date: [Date of Signature]

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SCHEDULE A: SERVICE LEVELS

(This Schedule details specific performance targets for the Services. This is a crucial section and should be highly customized.)

A. Uptime Commitment:

• Target Uptime: [e.g., 99.9%] per [Month/Quarter]
• Measurement: Calculated based on 24x7 monitoring, excluding Planned Maintenance (max [X] hours per [Month/Quarter]) and Force Majeure.
• Measurement Tool: [e.g., Service Provider's internal monitoring system, third-party tool]
• Credit for Failure:
  • < 99.9% to 99.5%: [5%] of [Monthly/Quarterly] Service Fee
  • < 99.5% to 99.0%: [10%] of [Monthly/Quarterly] Service Fee
  • < 99.0%: [15%] of [Monthly/Quarterly] Service Fee

B. Response and Resolution Times (as per Section 3.2.2): (Repeat table from Section 3.2.2 or expand with more detail if needed)

C. Other Specific Service Levels (Examples):

• Data Backup Success Rate: [e.g., 99.9%] of all scheduled backups completed successfully.
  • Failure Credit: [X]% of [Monthly/Quarterly] Fee if rate falls below target.
• Data Restore Time (RTO): Critical data can be restored within [e.g., 12 hours] of a major data loss event.
  • Failure Credit: [Y]% of [Monthly/Quarterly] Fee if RTO is missed.
• Patch Management & Security Updates: Critical security patches applied within [e.g., 72 hours] of release by vendor.
  • Failure Credit: [Z]% of [Monthly/Quarterly] Fee if target is missed.
• Reporting Accuracy: All performance reports provided to Client shall have an accuracy rate of [e.g., 99%] for key metrics.
  • Failure Credit: [A]% of [Monthly/Quarterly] Fee if reports are materially inaccurate.

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SCHEDULE B: INCIDENT SEVERITY DEFINITIONS

(This Schedule defines the criteria for classifying incidents, which directly impacts Response and Resolution Times.)

1. Severity 1 (Critical):

• Definition: Services are completely unavailable or severely degraded, preventing the majority of users from performing critical business functions. No reasonable workaround is available.
• Impact: Production system down, significant data loss, major security breach, severe financial impact.
• Example: All users unable to log in, core application functionality entirely offline.

2. Severity 2 (Major):

• Definition: Significant portion of the Services are unavailable or degraded, affecting a substantial number of users or critical business functions. A temporary workaround may exist but is inefficient or unstable.
• Impact: Major sub-system failure, performance degradation leading to significant user frustration and reduced productivity, non-critical data loss.
• Example: Specific module of the application is unresponsive, data synchronization failures impacting multiple users.

3. Severity 3 (Minor):

• Definition: Minor functionality of the Services is impaired, or performance is slightly degraded. Affects a limited number of users or non-critical functions. A reasonable workaround is available.
• Impact: Minor service interruption, non-urgent bug, cosmetic issue, minor performance slowdown.
• Example: Occasional slow response times for certain reports, a non-essential feature is unavailable for a few users.

4. Severity 4 (Low):

• Definition: General questions, feature requests, or minor non-critical issues that do not impact Service functionality or performance.
• Impact: No direct service interruption, minimal or no business impact.
• Example: "How-to" questions, documentation clarification, enhancement requests, minor UI glitches.

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