Software support SLAs

Written contracts covering the provision of software support services often incorporate some kind of service level agreement, or SLA for short. If you have been tasked with preparing or negotiating a software support SLA, and are looking for some guidance, this post should help you.

SLAs may cover more than just software support services. For example, where hosting, hosted services and/or software maintenance are being provided, an SLA may also cover aspects of those services. For the purposes of this post, however, I look only at support services.

What is an SLA?

As with many contractual concepts, naming conventions used in support contracts vary. Whilst the entirety of a software support contract will sometimes be referred to as "an SLA", I think it is useful to maintain the distinction between software support SLAs and software support contracts, with the former forming just one part – albeit an important part – of the latter.

Whether some set of provisions constitute an SLA depends upon their content.

The core provisions of an SLA are: (i) an elaboration of the scope of the support services; (ii) the specification of standards (especially measurable standards) that the services must meet; and/or (iii) the specification of the consequences if the services do not meet those standards. However, an SLA will not always cover all of this ground, and will often deal with supplemental issues.

I return to content issues below.

Documentary form

An SLA will usually appear as a schedule or annex to the main body of an agreement, although it may be a section in the main body.

Because the content of an SLA will be of particular interest to a range of commercial personnel within the service provider and customer organisations – personnel who may have limited interest in the rest of the document – it is usually better if the SLA appears as a distinct schedule or annex. The corollary of this is that formal legal matters (for instance, contract commencement and termination, warranties and indemnities, limitations of liability) should be set out in the main agreement, and should be kept out of the SLA.

Scope of support services

While the scope of support services may be defined in general terms in the main agreement, for instance in the definitions or in the services clauses, a more detailed scope will often be set out in the SLA.

Questions to consider when defining or elaborating the scope of support services include the following.

  • What are the core areas of service to be provided (eg providing assistance in relation to the use of software)?
  • What types of service are not covered by the contract (eg training services)?
  • What limitations will apply to the support services (eg after a certain number of hours' work in a month, the service provider may wish to charge the customer an hourly rate for additional services during that month)?

When third party software is integrated with the supported software or covered by the contract, services relating to that third party software may be subject to special exclusions.

Service levels

The two core sets of service levels for software support are (typically): (i) response times; and (ii) resolution times.

Consideration should be given to the questions of what constitutes a "response" and what constitutes "resolution". In some cases, there should be express definitions of these terms.

Each set of service levels will usually be organised by reference to the seriousness of the issues giving rise to the request for support services. For instance, an SLA may split issues raised through the support services into "critical", "serious", "moderate" and "minor" categories.

Where this approach is taken, each level of seriousness should be defined. Definitions may be supplemented by specific examples of each level of seriousness. Definitions and examples will vary from context to context, so you should be carefully cutting-and-pasting from SLAs formulated for other circumstances.

Some thought also needs to be given as to the nature of the obligation to meet each service level. For instance, does the service provider have an absolute obligation to respond to requests for support services within the defined time limits, or merely an obligation to use best or reasonable endeavours? This question should be considered in conjunction with the SLA provisions dealing with remedies in the case of a service level breach. Where service credits are to be awarded for a breach, the obligations will usually be absolute.

Service credits and other remedies

In addition to elaborating the scope of the support services, the SLA may also provide for remedies in the event the service provider fails to meet the defined standards of services.

One of the signature features of an SLA is provision for service credits: that is, discounts on charges in the event that the service levels defined in the SLA are not met.

Not all support SLAs contain service credits – they are not as common as they are in availability SLAs – but many do, particularly in the case of high value negotiated contracts covering support for software that is critical or important to the day-to-day business operations of the customer.

However, it should always be remembered that service credits can be a shield as well as a sword. Many provider-drafted SLAs act as limitations of liability, protecting the service provider from breach of contract actions where the services are not up to scratch.

Related matters

Although provisions covering service scope, service levels, and service level breaches are the core of the SLA, it is not at all unusual to find related matters covered in SLAs.  In particular, the following matters may be covered:

  • means of access to the support services
  • customer obligations relating to support services
  • misuse of services
  • management processes
  • dispute resolution

Precedents and legal support

The best precedent for an SLA is often one used before by your organisation.

If however you are looking for a template, you should consider SEQ Legal's range of software support agreement templates and software support and maintenance agreement templates, each of which incorporates a template SLA.

Alternatively, if you would like to speak to me about the drafting or negotiation of a software support SLA (or any other software-related legal contract) please do call or email me.

Comments

I was wondering if you could do me a quick favour and have a look at the below and attached and say whether they are contrary to the unfair terms and conditions act of 1999 / unfair trading regulations act 2008 and the requirement of good faith and fair and open dealing (A standard term is unfair “if, contrary to the requirements of good faith it causes a significant imbalance in the parties rights and obligations under the contract, to the detriment of the consumer”)? 

The agreement will end on the expiry of the period of agreement provided one of us has given at least 3 months written notice to the other that it is to end on such expiry date. If you wish this agreement to end at the end of the period of agreement we must receive written notice of that at least 3 months before then.

If no such written termination notice is served then we agree that this agreement will continue after the end of agreement in full force and effect for a further period of 12 months from the end of the period of agreement and that consequently either party is then required to give the other at least 3 months written notice that is to expire on such 12 month anniversary. 

Many Thanks,

James Baxter

 

Is this definitely a B2C contract?

Does English law apply?

What sorts of services are supplied under the contract?
 

Yes this is a business to business contract on a service agreement for photocopiers where the service minimum term has expired. This is English Law yes.

Thank you.

As this is a B2B contract rather than a B2C contract, the Consumer Rights Act 2015 (which superseded the Unfair Terms in Consumer Contracts Regs 1999) will not apply; nor will the Consumer Protection from Unfair Trading Regs 2008.

OK, does the busness have any rights regarding this? Also the service provider has been bought by a new company who have no new signed agreements - it's therefore felt the contract was finished however have been penalised by a further twelve month ectension

I would need much more information - and I'd need to review the contract in question - to advise here. In other words, I'd need to take you on as a client. Unfortunately I'm not taking on clients at present so cannot help further. 

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