Whether you’re rolling out SaaS, cloud, or IT services, getting SLAs in technology contracts right is critical to avoiding disruption and disputes.
You may have experienced the disruption of a system outage with no clear fix timeline, or struggled to escalate a critical issue because support tiers weren’t clearly defined. Without a well-drafted service level agreement (SLA), even strong supplier relationships can become legally and operationally fragile when performance slips.
Working with our commercial law solicitors ensures that you’re not just negotiating SLA terms, but also embedding the proper legal, technical, and operational protections into your technology contracts. We help both suppliers and customers define measurable service expectations, resolve the finer points of support provision, and avoid disputes by building legal clarity into every clause.
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Understanding your SLAs in technology contracts
Whether you are a Chief Technology Officer, in-house counsel, or a procurement lead, a crucial part of your role when buying technology services will be to define, negotiate and enforce the SLAs that support your business-critical technology relationships. Your ability to do this will be impacted by the quality of the SLAs you put in place for those services.
You are likely to need a large number of fairly complex service levels to support the underlying services, and your technical and legal teams must work together to produce a set of service levels which are:
- comprehensive
- clear
- measurable
- legally enforceable.
The SLA will outline each party’s expectations regarding the level of services to be supplied, clearly define their scope, detail the required timescales for delivery, and include reporting requirements to enable performance to be measured.
To avoid disputes, your SLA in your technology contracts should clearly define service levels and include enforcement mechanisms like service credits. These service credits are then triggered if the supplier falls short of the service level standards. A well-drafted SLA will be an indispensable tool for both parties in the practical day-to-day operation of the services, underpinning the core delivery expectations.
Why SLAs in technology contracts must be legally enforceable
There are several factors specific to the technology sector that need to be addressed in your SLA to avoid costly and time-consuming disputes arising from what is delivered. By devoting time and resources to getting the service levels right at the outset, you will make savings later on and benefit from an outsourcing relationship which runs smoothly.
You will need to set service level indicators (SLIs) to measure the performance of your service levels. In the technology sector, these can be complex and highly specialised. The types of issues you will need to measure include:
- Support – Specify the support hours you require and the type of support you expect to receive. Will it be provided on- or off-site? Will there be a general helpdesk, or does your business need a higher level of in-depth technical expertise to support the service? How will a support request be made (often referred to as raising a ‘ticket’)? Consider setting a priority order for the different types of issues you may encounter (support tiers), with business-critical incidents at the top and lower-scale problems, such as isolated system defects or minor errors, at the bottom. Specify how quickly support requests will be responded to and resolved. For example, will the supplier be required to apply software updates (patches) to fix any bugs or system vulnerabilities? If so, how quickly must they do this?
- Service availability and uptime – Service availability will be vital, and you will need to include metrics to assess uptime. Think about the point at which it should be measured and the period over which it will be evaluated. For example, for cloud services, measurement could take place at the end-users’ PCs, at the cloud service termination point (where the link is made between the service and the customer’s infrastructure), or at the cloud service provider’s servers. Consider the technical practicalities of how this will be measured.
- Service windows – Linked to service availability, the SLA should define when service windows are permitted, for example, to enable the provider to carry out maintenance tasks which require downtime. The service provider must be able to perform this task without incurring any service credits. Additionally, the customer must establish appropriate parameters in the SLA to prevent being impacted by frequent, unexpected, or sporadic interruptions to the service.
- System response times (latency) – Systems need to respond promptly to user inputs. Latency is the delay between a user taking an action on a network or web application and when they receive a response. You need to include appropriate service levels to address this issue. For example, you could include metrics to measure the speed at which screens respond to user inputs.
- Service credits – If the service provider fails to satisfy the service levels, you’ll need a robust system of service credits. These typically provide the customer with an agreed-upon deduction from the service or support fees. In technology contracts, it’s common to see a series of tables in the SLA specifying the service credits payable as a percentage of the monthly charges, measured against different levels of failure to meet specific service levels. Take care to ensure that the primary services contract preserves the customer’s right to claim damages, because service credits alone may not adequately compensate the customer for major outages, or significant service level failures.
In each case, the golden rule when setting service levels is clarity – to avoid disputes around expectations, but also to ensure that the service levels are legally enforceable. A court won’t enforce a service level unless it is adequately defined, and both parties know where they stand. For example, a SaaS provider promises your business 99.9% uptime but doesn’t define how this will be measured or compensated. If your business suffers a major outage and your SLA isn’t sufficiently clear to be legally enforceable, you will inevitably end up in a costly and time-consuming legal dispute over remedies.
If your business provides services to the public sector or is aligning its practices with broader standards, it's worth reviewing SLA expectations outlined in the UK Government’s G-Cloud supplier guidance. These outline the types of service levels, escalation mechanisms, and availability metrics that public buyers typically require – principles that can also help improve SLAs in private-sector technology contracts.
Data protection and cybersecurity provisions in your SLAs
When your business engages a third party to perform services that involve accessing its IT systems or handling its data, you need to take measures to address the impact this has on your risk profile, including potential data protection and cybersecurity risks. You’ll also need to take steps to comply with applicable laws, such as the UK General Data Protection Regulation (GDPR).
Managing these risks is crucial because any deficiencies on the part of your service providers may make your business’s information security compliance programmes ineffective, and your legal accountability for this can’t be outsourced.
Your main contract with the service provider will be the appropriate place for addressing most of these issues; however, the SLA can also be a valuable tool for addressing some of the finer details, which will help drive your overall compliance strategy. For example, you could include in your SLAs:
- Cyber security performance expectations and measures – Define the cybersecurity performance levels your service providers must achieve, as recommended by the National Cyber Security Centre. For example, you could include specific timeframes for identifying and addressing cybersecurity risks, scaled according to the criticality of those risks.
- Cyber security incident reporting and response requirements – Provide a mechanism for vulnerability reporting. Set out reporting timeframes for cybersecurity incidents, including any personal data breaches.
Our commercial law solicitors can help your business set up a practical and effective contractual framework which addresses these cyber security risks and issues.
Get legal help with SLAs in your technology contracts
A well-drafted SLA in your technology contracts ensures both legal protection and technical accountability.
Whether you're procuring essential cloud services or delivering software to clients under tight performance targets, a strong SLA can mean the difference between a smooth supplier relationship and a costly dispute. From system uptime metrics to service credits and cybersecurity responsibilities, your SLA needs to be enforceable and aligned with your business risks.
Our commercial law solicitors can support you with drafting, negotiating and reviewing SLAs that stand up to scrutiny and deliver practical results – so your technology contracts work for you, not against you.
