Service Level Agreements
by Lauren Sturgess, Trainee Solicitor
Throughout my role working as a trainee solicitor, I have been able to undertake work within the Contract Law sector. As part of this work, I have had exposure to drafting and reviewing various types of agreements. One agreement I have had exposure to drafting is a Service Level Agreement (SLA). An SLA can be very useful to multiple departments within North West Leicestershire District Council (NWLDC) where NWLDC are looking to provide a service to the public, but this service is being provided by another organisation in return for a specified payment.
What is a Service Level Agreement?
SLA’s are a commitment between a service provider and a customer. An SLA defines the level of service expected from a service provider and sets out clearly in one single document all of the agreed services and expectations between that service provider and the customer. SLA’s usually provide a framework for the provision, management and development of that specific service being provided.
What should a Service Level Agreement include?
An SLA should include details of two elements, the ‘Service Element’ and the ‘Management Element’.
Some examples of what should be included in an SLA are:
- Service specification
This should include the Service Aims and Objectives of the agreement, detailing the services that will be provided and the expectations of that service.
This should set out the duration that the agreement is set to last, specifying a clear start and end date of the agreement. It may be that the agreement includes an option to extend the agreement if it is successful in the original agreement.
- Financial arrangements
This should cover the financial arrangement that is in place between the service provider and the customer, i.e., the agreed amount of funding that the customer will provide the service provider for carrying out the services set out in the service specification.
This also may detail the terms of payment, i.e., whether payment will be made at the end of the duration of the agreement, or in specified intervals throughout the duration of the contract. For example agreeing that payment will be made on a set date each month, or after a set amount of days upon receipt of an invoice on a set date each month.
- Data Protection
The agreement should also include a provision that the service provider will carry out its business in accordance with relevant legislation including but not limited to the Data Protection Act 2018. This ensures that in carrying out the service for NWLDC they are not to breach any data protection legislation.
This should state the consequences for the service provider if they are in breach of any of their obligations under the agreement. This would usually include the right for the customer to terminate the agreement upon service of a notice of termination in writing or to serve a notice on the service provider to remedy the breach on specified terms within a reasonable time stipulated in the notice.
- Point of Contact
This should set out who the main points of contact are and their job title for both the service provider and the customer for the avoidance of doubt throughout the duration of the agreement.
- Terms of Review
This should set out how the services will be reviewed to ensure that the service provided is complying with the terms of the agreement. This should set out the frequency of the reviews (I.e. every month) and what the review will cover (i.e. all aspects of the operation). These reviews may then determine if the agreement is extended.