Liverpool Solicitors

What is a service level agreement ?

A contract made with a supplier that specifies what service will be provided by that supplier and at what level the service will be accepted is referred to as a Service Level Agreement.

The agreement will specify the responsibilities and priorities of the supplier in providing the service.

What should a service level agreement include ?

A service level agreement should specify the services to be provided, payment methods, indemnity options and who owns the products as well as any warranties and confidential information.

•             Services and time limits must be clearly defined as this may impact on the performance of the supplier

•             Make sure to incorporate provisions in relation to how much is to be paid for the service, the time of payment and whether there is anything else included in the payment such as expenses, taxes and travel. Define penalties for late payments.

•             The contract should state that it is not a partnership, joint venture or employer employee relationship as these can be implied by law.

•             Representation and warranties provision requires the supplier to properly perform the contract and to industry standards.

•             The supplier should be obliged to indemnify the company in case they do not fully perform the representations and warranties specified.

•             In order to keep legal title of the products, it is important to state that the ownership will not pass to the other party.

•             The service level agreement should define how the any confidential information will be hands by both parties and what the restrictions are.

•             A force majeure provision deal with situations where the service cannot be performed because the supplier is out of control i.e. due to acts of god, war or weather. Therefore, it is essential to have this provision in place and identify what happens if such situation occurs.