SLA is the abbreviation for service level agreement.

Is an SLA a Software Licence?

No. A service level agreement (SLA) sets out the SaaS services being provided in addition to the right to use the SaaS software.

What is an SLA?

An SLA forms part of a SaaS agreement. The SLA can be contained in a separate schedule to the SaaS agreement, or included in the main terms and conditions of the SaaS agreement and set out:

– Details about the availability of the software and services;

– Technical details about hosting; and

– Details about support and maintenance services for the software.

How much Detail?

It is advisable for an SaaS supplier to provide some degree of detail in the SLA to avoid spending unnecessary time negotiating the addition of further details requested by customers.

– The degree of detail will depend upon:

– How much a customer pays for the SaaS software and services;

– Whether the SaaS software is business critical i.e. online banking;

– What is standard in that particular business sector.

Terms to Include

SLAs should generally contain the following provisions, where appropriate:

– Guaranteed availability of the services and software;

– Timing of and prior notice of maintenance;

– Description of the security provisions at the hosting centre and the technical infrastructure;

– Problem response and resolution times;

– Customer support description and support hours;

– Provision of service availability reports;

– Backup of customer data;

– Security and disaster recovery provisions;

– Right to terminate for breaches of the SLA;

– Service credits for breaches of the SLA;

Advantages of having an SLA

If SaaS suppliers do not have their own SLA, customers will often try to impose their own SLA on the supplier which does not “fit” the services being provided. This can lead to protracted negotiations about the content of the SLA.


Due to the unique nature of SaaS and in particular the use of SLAs you should seek specialist legal advice on the content of an SLA whether you are a supplier or a customer to ensure that your rights are adequately protected.

Irene Bodle is an international IT lawyer who specialises in IT law, in particular, SaaS and cloud computing. Irene provides specialist, pragmatic and business-focused legal advice to companies who provide IT services to business customers. She has over 14 years experience (gained both in-house and in private practice) advising technology companies across all business sectors on the legal and commercial risks of operating a technology business. Whether you are a start-up who needs help creating a legally compliant business website or are an established technology company who needs assistance drafting and negotiating complex legal agreements, Irene can help you achieve your commercial objectives, efficiently and cost effectively. As a dual-qualified English and Irish lawyer, Irene advises primarily on English law, but also advises on Irish IT law. Being based in Berlin and fluent in German, Irene can also assist in negotiating or advising on technology agreements drafted in German.

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