Service Level Agreements

A service level agreement is a legally binding contract between a service vendor and a customer. Specifically, certain aspects of the service offered by both parties are outlined in a SLA. In short, it’s a contract that describes how the two sides mutually benefit from working together. For both companies involved, it ensures that there is a level playing field, protects both parties from potential litigation, and sets up a system for future reference.

When you talk about outsourcing, it’s really all about the end user of your outsourced services. If your business offers software development services, for example, the level agreement could spell out who holds the copyright to any software that’s created under your company’s brand. With this agreement, you prevent another company from offering the same software, or from claiming ownership to any of your other intellectual properties. It also spells out who gets to take credit for any of your company’s technical work, and who gets the credit for any of your outsourced services. This way, you and your client have a level of protection against damages due to unlicensed use of your services.

What exactly does a service level agreement (SLA) entail? Basically, it consists of the legal jargon involved in legally binding a service and a customer. It goes into detail about how a company benefits from selling its services to a third party, and what the specific rights that the service vendor or client has. For instance, it could describe the customer’s right to use the technology in question. It might also specify when that right is granted, and what happens when it isn’t. Essentially, it provides legal protection for both sides.

That’s why it’s important to have a good service level agreement in place. Without one, you could find yourself getting into serious legal trouble. If you’re outsourcing, you might be liable for patent or copyright infringement claims brought against you by an outsourcing firm that’s acting on behalf of a vendor. You could also be held responsible if there is damage done to your own company property or if any business losses because of the outsourcing firm’s activities. So it’s crucial that your service level agreement spells out all the details, and explains clearly who is responsible for what.

You don’t need to go crazy creating a service level agreement. Basically, it’s just a statement of fact, explaining who is responsible for what, and what happens if things go awry. Once you have it in writing, you can put it in the contract, and everyone just accepts it as the settled issue.

As with all legal documents, the service level agreement needs to be properly legible. If you and your outsourcing team can’t both read it, there’s a good chance that you won’t be able to enforce it against the other party. To save on cost, it might even be cheaper just to hire a legal expert to draw up one for you, so that you don’t have to waste time trying to find one, and so that you have the peace of mind that comes from knowing that you’re working in compliance with the law.

Even if your legal expert is unwilling to create one for you, or if it seems too complex for you to explain in person, try to hire a good printer. If you have a decent sized printing shop with lots of experience doing such agreements, they should be able to easily create one for you, based on the wording that you’ve included. You can have it printed in small portions, so that both sides can read and understand it, before making any signatories. The printer can also give each signatory their own copy of the document, as needed.

When you’re finally ready to sign the contract, make sure that each party reads it thoroughly. If there are any ambiguous words or sentences, it’s a good idea to have someone else look them over. Your service level agreement might be the perfect template for these sorts of agreements, but it’s also good to have input from both parties. It ensures that the document isn’t simply a template that has been imposed on you by your corporate management team, but rather a living, breathing piece of writing that expresses the exact services you provide to your customers.