Service level agreement: what UK businesses should check
A service level agreement — SLA — is a contract between you and a service provider that defines the standard of service you can expect, how performance will be measured, and what happens when the provider fails to meet those standards.
SLAs are common in IT services, cloud hosting, managed services, outsourced functions, and professional service retainers. They are also one of the most commonly misunderstood types of commercial contract.
The key point: an SLA protects you only if it contains meaningful commitments with real consequences for breach. Many SLAs look comprehensive but are structured in ways that make it practically impossible to claim any remedy.
What the SLA should define
Service availability is typically expressed as a percentage of uptime — 99.9% availability, for example. But availability means different things in different SLAs. Some measure availability 24 hours a day, seven days a week. Others measure only during business hours. Some exclude planned maintenance windows from availability calculations. Check exactly what the uptime commitment covers.
Response time commitments define how quickly the provider will acknowledge and begin addressing issues. Distinguish between response time — when someone acknowledges the problem — and resolution time — when the problem is actually fixed. Many SLAs commit to response times but not resolution times.
The definition of a service failure matters enormously. Some SLAs define failure in ways that are difficult to trigger — requiring you to demonstrate that a particular threshold was breached over a rolling 30-day period, for example, rather than at any given moment.
Service credits and remedies
Most SLAs provide for service credits when commitments are not met — a reduction in your next invoice proportional to the period of unavailability or the severity of the failure. These credits sound like compensation but are usually structured to be worth far less than the cost of the disruption to your business.
Check whether service credits are your exclusive remedy — meaning you cannot claim additional compensation beyond the credits. If a three-hour outage costs your business £10,000 but the SLA provides a service credit of £50, a clause making credits your exclusive remedy means you cannot recover the difference.
Check whether you have to claim credits actively — many SLAs require you to submit a formal claim within a specified time window, and failure to do so forfeits the credit.
Exclusions and force majeure
SLAs typically exclude service failures caused by your own actions, third-party failures, or force majeure events. Check the scope of these exclusions. Broad force majeure clauses — covering anything beyond the provider's reasonable control — can significantly limit their liability.
Exit rights for service failures
Consider whether the SLA gives you the right to exit the contract if the provider repeatedly fails to meet their commitments. Persistent underperformance that does not trigger an exit right locks you into an underperforming service with no remedy beyond credits.
Getting your SLA reviewed
PaperSafe reviews service level agreements in plain English, identifying whether the commitments are meaningful and whether the remedies for breach are adequate. Upload your PDF and receive a complete review in under 2 minutes for £49.
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