I've had the opportunity to review several poor Service Level Agreement (SLA) contracts, which include clauses shielding the provider as if they are an endangered species. These clauses are usually masked under "general clauses" or fancy legal lingo to possibly go un-noticed.
Here are several examples of texts that a customer should watch out for in a Service Level Agreement:
1. The data protection trick
- Sample clause: The provider will protect and not reveal any received or collected information about the buyer, unless it's required by legal authorities during a formal investigation or in case of protection of provider's interests
- Analysis: Although this particular clause may vary from country to country (legal system differences), there is NO LOGICAL ARGUMENT for anyone to reveal your information for protection of their interest.
- Sample clause: The customer will hold harmless and indemnify the provider from all errors, damage or data loss, loss of business, delays in processing or any other problems resulting from usage or inability to use this service. The provider is not responsible for any damage to hardware or systems during the installation or maintenance of the service
- Analysis: While a relatively standard clause, always have your legal team AND your technical team review and dissect this clause. In the example, the bold sentence wording actually makes the provider not responsible for any screw-ups during installation, even if their technician placed a 110V line in a 300V outlet, or used a drill to tighten a screw of the serial port.
- Sample clause: The provider reserves the right to modify the conditions of service, and the modifications will be considered agreed to in case of service contract renewal.
- Analysis: An SLA can be written to refer to certain general conditions related to the service. A provider can modify these formal conditions without proper communication to the customer. Since most contract renewals are automatic, this can suddenly put the customer in a very bad position even if the initial SLA contract was good. Always insist that all agreed changes to service must be signed off in a dedicated document.
- Sample Clause: Our service has a service quality of XX% (delay, latency, bandwidth)...In case of unforseen circumstances, this quality may be reduced.
- Analysis: Nobody signs and pays for an SLA to guarantee services in ideal circumstances. The term unforeseen circumstances is simply get out of jail free card. For instance, even rain can be an unforseen circumstance for a poorly protected wiring cabinet, but it's not something that the customer should worry about. If special circumstances need to be addressed, they need to be properly itemized, without room for different interpretation.
- Sample Clause: All service activities are performed during the 8AM to 6PM. If the customer requires intervention outside of business hours, such intervention will be charged according to regular pricing policy.
- Analysis: This clause may have a place in a standard contract. When an SLA contract is signed, it's levels are above the standard contract, and are appropriately priced. So, if one is paying for a level defined in the SLA, the price MUST COVER ALL POSSIBLE SCENARIOS.