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Service Level Agreement Termination Clause

3) Contractors in partnership with competitors: market situations can always lead the current contractor to collaborate with a competitor or diversify into a competing company. It is very important to mention such situations as part of the exit clause. Often, ALS will include an amendment control procedure that defines a mechanism for agreeing and recording changes to the agreement or services to be provided. In an agreement of any length or complexity, it is inevitable that changes will be made to services (which affects service levels) and an agreed and properly implemented change control procedure is essential. (b) if a service is not performed due to a lack of feasibility, make reasonable efforts to provide services and/or resume service delivery as quickly as reasonably possible. In the case of long-term contracts, the parties must verify the performance of the services. Provisions for reporting, meetings, information provision and dispute escalation procedures are sometimes included in the AES and not in the main part of the agreement. Unfortunately, such provisions are often overlooked, but for a service contract to be successful, it is essential that contract management procedures are agreed and effectively followed. Then, by providing each service one after the other, the customer should indicate the expected performance standards. It depends on the service. In the “Reporting” example above, a possible level of service can be 99.5%.

However, this issue needs to be carefully considered. Often a customer wants performance standards at the highest level. In practice, this is understandable, but it could be impossible, unnecessary or very expensive. On the other hand, the service provider can make it clear that service levels should be deliberately low to ensure that the service can be provided at a competitive price. It`s a matter of evaluation, and the client needs to carefully evaluate each level of service – it`s often that different services are weighted differently depending on the size of the business. Performance standards for the availability of an online service are generally high, as it is essential that the customer ensures constant availability of the service. Other individual services may be less important, and service levels for these may be set at a lower level. In order for ALS to have a “bite,” the non-level of service must have financial consequences for the service provider. More often than not, the integration of a service credit system is the most common way to achieve this. In essence, the service provider pays the customer an agreed amount that should be used as an incentive for performance improvement if the service provider does not meet or credit the agreed service standards. These service credits can be measured in different ways. Like what.

B, if the 99.5% level for reports is not met, ALS could include a service credit, which is granted some price reduction for each performance gap of 0.5% per week. Service credits may also be granted if z.B. three or more errors occur to complete a level of service over a period of time. Here too, each level of service must be considered individually and a reasonable level of credit must be agreed between the service provider and the customer if the agreed level is not reached over a period of time. It is important that the service credits are adequate and that they encourage the provider to do better and that they enter early enough to make a difference. 1.3. Information requirements. To obtain service credits, [PARTY B] [PARTY A] must be notified within 30 days of the date [PARTY B] is authorized to receive a service credit. Failure to comply with this requirement is [PARTY B`s] right to obtain a service credit.

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