Service Level Agreement (SLA)
Also called: SLA · Service Levels · Uptime Guarantee
A service level agreement defines the measurable performance standard a provider must meet — typically uptime, response time, or resolution time — and the remedy the customer receives when that standard is missed, usually service credits.
In more detail
The number is the least interesting part of an SLA. 99.9% uptime sounds strong but permits roughly 43 minutes of downtime per month; whether that is acceptable depends entirely on what the service does for your business.
What matters commercially is the remedy. Most SLAs offer service credits — a percentage discount on the next invoice — which are typically capped and often described as the customer’s sole and exclusive remedy. That phrase is important: it can bar you from claiming actual losses caused by an outage.
Also check how the metric is measured and by whom. If uptime is measured by the provider, excludes scheduled maintenance, and requires the customer to file a claim within a short window, the practical value of the SLA drops considerably.
What our lawyers check
- Whether missing the SLA actually triggers a meaningful remedy or a token credit
- Whether service credits are stated as the sole and exclusive remedy
- How the metric is measured, what is excluded, and who does the measuring
- Whether repeated SLA failures give a right to terminate
Contracts where this clause matters
Related terms
This definition is general information about commercial contracting practice, not legal advice. How a clause operates depends on the specific wording of your agreement and the law that governs it. For advice on your contract, have it reviewed by a lawyer.
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