Service Level Agreements (SLAs) are crucial documents that businesses use to clearly outline expectations and maintain healthy relationships with their suppliers and customers.

Whether you're managing an IT service, marketing campaign, or any professional service, having a well-defined SLA helps everyone stay on the same page and reduces the potential for misunderstandings.

What is a Service Level Agreement (SLA)?

A Service-Level Agreement (SLA) is a clear commitment between two business parties—typically a customer and a supplier—that outlines the details of their working relationship and the level of service expected. It sets measurable targets and standards, ensuring that both sides know exactly what's required and how performance will be evaluated.

Creating a professional SLA doesn't have to be complex. The easiest way is by using the Bind contract generation tool. Bind asks you straightforward questions and instantly creates a well-written agreement for you. From there, you can quickly share it for review, digitally sign it, and securely store it—all in one place. Bind even offers a free 3-day trial, so you can test it without any commitment.

What Does an SLA Typically Include?

An SLA defines specific services that a supplier commits to delivering, along with performance standards like response times, uptime guarantees, and quality measures. This clarity helps prevent misunderstandings and sets clear expectations for both parties.

SLAs in the UK

In the UK, SLAs are treated as formal contracts. Businesses from sectors such as IT, telecoms, consulting, marketing, and facilities management rely on these agreements daily to manage relationships and ensure accountability. A good SLA protects both parties, clearly detailing what happens if things don’t go according to plan.

Other Service Agreements

Master Services Agreement (MSA):
An MSA is a broad contract between two or more parties that sets out general terms and conditions that govern all current and future activities and responsibilities between them. It serves as the foundation for multiple future contracts or work orders.

Create a Master Services Agreement in Bind >

Service Agreement:
A Service Agreement outlines the terms and conditions between a specific service provider and client. It details the scope of the services, payment terms, and conditions for delivery, typically for a single, clearly defined project or service.

Create a Service Agreement in Bind >

Service Level Agreement (SLA):
An SLA specifically focuses on the performance and service quality expected from the service provider. It includes measurable targets and metrics to regularly monitor performance, ensuring the agreed standards are consistently met.

Each document serves a unique purpose and is frequently used together to ensure comprehensive coverage and clarity in business relationships.

Create a Service Level Agreement (SLA) in Bind >

Defining Service Levels

To avoid disputes, it’s important that service levels are described as specifically as possible. Avoid vague terms; instead, include precise, measurable outcomes. For instance, rather than saying services must be delivered "quickly," specify exact timelines—like "response within 4 hours."

Measuring SLA Performance

Clearly state how you’ll measure performance. Common methods include regular reporting, automated monitoring tools, or periodic customer surveys. For instance, an IT service might track uptime, while customer service teams may track ticket response times.

If Service Levels Aren’t Met

Your SLA should specify what happens if agreed-upon service levels aren’t achieved. Usually, this involves financial penalties, compensation, or other remedial actions such as additional services at no extra cost. Having clear consequences in place encourages compliance and performance consistency.

Regular SLA Reviews

SLAs aren't set-and-forget documents. Regular reviews—quarterly or semi-annually—are crucial to keep the agreement relevant. During these reviews, you can adjust service expectations, discuss performance issues, and amend any details to reflect changing business needs.

Legal Compliance and GDPR

SLAs in the UK need to follow local legal requirements, including data protection laws like GDPR. If your SLA involves data handling, clearly outline responsibilities around data privacy, security, and breach reporting.

Who Should Sign an SLA?

Typically, authorized representatives from both the supplier and the customer sign an SLA. Digital signatures are widely accepted in the UK, making this process straightforward and fast. Using a digital platform like Bind streamlines the signing process, allowing everyone involved to sign remotely without hassle.

Common Mistakes to Avoid

A common mistake in creating SLAs is setting unrealistic or ambiguous expectations. Ensure your SLA is achievable and clearly worded. Also, don’t neglect to specify review dates or mechanisms for dispute resolution—these details are vital to a successful SLA.

Free Service Level Agreement (SLA) Template

Here's a simple template you can use to start:

Service Level Agreement (Generic Template)

Date: [Insert Date]
Between: [Supplier Name] and [Client Name]

1. Services Provided:
Briefly describe the services.

2. Service Availability:
State the availability clearly (e.g., 24/7, weekdays only).

3. Performance Metrics:
Define exact performance criteria.

4. Response and Resolution Times:
Specify timeframes for issues to be acknowledged and resolved.

5. Monitoring and Reporting:
Describe how performance will be tracked and reported.

6. Compensation and Penalties:
Outline financial or service-level penalties clearly.

7. Duration and Termination:
State how long the SLA lasts and under what conditions it can be ended.

Signed by:

Supplier Representative

Client Representative

The simplest and most effective way to manage SLAs from creation to signatures up to storage is by using the Bind contract generation tool. Its intuitive process creates professional, clear, and compliant agreements in minutes. Sign up for your free 3-day trial today and simplify your contract management.