The service level agreement and its importance for the contracts

The Service Level Agreement started to be adopted in Technology Information contracts (T.I,), and it is also object of the ABNT Regulation (ISO/IEC 20000-1:2011). But its importance is not restricted to this category of contracts, once it is a way to measure the service provision and follow it up, providing the contractors with more efficient mechanisms than just terminate contracts that frequently are of great importance for their company. It also provides the service provider with the opportunity to monitor their services and guarantee an advantage in their market activity.

So, what is the Service Level Agreement (SLA) after all?

This document is a complement for the providing service contract signed between the parties, and it normally has an Annex or a separated chapter. It defines items of great importance when providing services. Those items can be measured and fines can be established when they are not accomplished.

In T.I. contracts, the SLA usually establishes the deadline to correct instabilities or  operation failures, frequently using a gradation among critical levels and those with less harmful potential, availability and others.

Many continuous service providing contracts can benefit from the Service Level Agreement even when they don´t belong to the technology area because, on a daily basis, there area a series of issues that can jeopardize the execution of a contract, and the available legal mechanisms frequently don´t offer an appropriate solution.

Theoretically, an unsatisfied contractor can notify the service provider and point out items that do not correspond to the expectations of the contract, but if they are not well detailed and measured, it´s possible that the allegations end up without enough  factual support. On the other hand, a well-written Service Level Agreement may provide efficient ways to control and monitor the services before situations in which just the termination is possible occur, what frequently bring loss to both parties.

Consequently, the Service Level Agreement must be made in a collaboration between the company contracting area, which has technical knowledge and knows the necessities for that contract, and the Juridical area, which will avoid any dubious wording that might not offer the expected contractual protection.

This way, the contractor has good specifications regarding which issues might damage their company, and the contracted party that has a good performance in the measurements offers a reliable service providing, guaranteeing their image in the market and alongside their contractors.

Service items are specified, measurements and fines well delimited, with mechanisms for termination in case there are situations of non-compliance and recurrence.

So, it is an important point of attention for the contracting and the contracted companies in order to regulate the relation and reduce, or at least facilitate, the solution of eventual arguments that might arise during the service provision.

Eliana Bellucco, Lawyer, expert in the contractual area at Almeida Prado & Hoffmann Advogados Associados