Service Level Agreement (SLA) Drafting

A Service Level Agreement is a contract between a service provider and a client that defines the expected service standards. It outlines how the service will be delivered, measured, and managed. Below are the essential clauses that are included in an SLA:

1. Definitions and Interpretation:

This clause provides precise meanings for terms like “Agreement,” “Effective Date,” “Professional Fee,” “Services,” and “Confidential Information.”

It explains how to interpret references to laws or headings within the contract.

2. Responsibilities/Duties:

This clause outlines the specific obligations of each party under the agreement to ensure seamless service delivery. It includes:

• The service provider’s duties include timelines, deliverables, and quality of work.
• The client’s obligations include access to resources, timely feedback, and payments.
• Mutual cooperation and communication responsibilities.
• Limitations on what either party is expected to perform.

3. Intellectual Property:

This clause deals with ownership and usage rights of intellectual property. It includes:

• Ownership of pre-existing IP and IP developed during the project.
• Licensing rights are granted during the term of the contract.
• Restrictions or modifications of proprietary material.
• Obligations to return or destroy IP after termination

4. Payment Terms:

This clause governs the payment process for services rendered. It includes:

• Agreed fees, rates, or pricing model.
• Payment schedules such as monthly, per milestone, or upon completion.
• Procedures for invoicing and payment timelines.
• Late payment penalties (if any) and how payment disputes will be handled.

5. Warranties:

This clause outlines the guarantees provided by the service provider regarding their services. It includes:

• Assurance that services will be delivered competently and as agreed.
• Any warranty period after delivery for fixing defects.
• The client’s right to request re-performance if issues arise.
• Disclaimer of implied warranties, where legally permitted

6. Limitation of Liability:

This clause limits the financial liability of either party for damages. It includes:

• A cap on total liability.
• Exclusion of indirect or consequential damages.
• Situations where liability is not limited, such as fraud, gross negligence.
• Clarity on specific risks that are not covered.

7. Confidentiality:

This clause protects sensitive or private information exchanged during the agreement. It includes:

• What is considered confidential, such as trade secrets, business data, etc.
• Restrictions on sharing or disclosing information to third parties.
• Duration of confidentiality obligations
• Legal exceptions against disclosure of confidential information, such as required disclosure by law or with consent

8. Indemnification:

This clause outlines how one party will compensate the other for specific losses. It includes:

• Circumstances under which indemnity is triggered
• Types of damages or legal costs covered.
• Any exceptions or exclusions to the indemnity obligation?

9. Termination:

This clause outlines the conditions for terminating the agreement early or upon its completion. It includes:

• Notice period required for voluntary termination.
• Grounds for immediate termination
• Obligations after termination, such as return of property or final payments.
• Effects of termination on pending services or fees.

10. Governing Law:

This clause establishes the governing law for the interpretation of this contract. It includes:

• The country or state whose laws apply.
• The location of courts or arbitration proceedings.
• Agreement on language and legal standards for interpretation.
• A reference to applicable acts or statutes such as the Indian Contract Act, 1872, The Arbitration Act, 1940, The Mediation Act, 2023, etc.

11. Dispute Resolution:

This guide outlines the process for addressing conflicts that may arise between the Parties. It includes:

• Internal resolution procedures (e.g., meetings between managers).
• Mediation or arbitration steps are taken before court proceedings.
• How arbitrators are selected and which rules apply.
• Jurisdiction for resolving legal disputes.

12. Severability:

This clause ensures that if part of the agreement is found to be invalid or unenforceable, the rest of the contract remains in effect. It includes:

• A statement that the invalidity of one clause does not affect the validity of the others.
• An intention that the remaining provisions continue to be legally binding.
• Language allowing the parties to replace the invalid provision with a lawful one that achieves a similar result.

13. Force Majeure:

This clause protects both parties in the event that unexpected events beyond their control prevent them from fulfilling the agreement. It includes:

• A list of qualifying events, such as natural disasters, war, pandemics, strikes, government actions, or power outages.
• A declaration that neither party will be held liable for delays or failures caused by these events.
• A requirement for the affected party to notify the other in writing as soon as possible.
• The right to suspend obligations for the duration of the event or, in prolonged cases, to terminate the agreement.
• Clarification that payment obligations for services already rendered remain enforceable.

Common Mistakes to Avoid

• Vague or generic service definitions
• Lack of clear performance indicators
• No service exclusions or boundaries
• Missing timelines for deliverables
• Absence of a dispute resolution clause
• Failure to mention governing law and jurisdiction

Why Choose Kanakkupillai for SLA Drafting?

Looking for legally sound and professionally drafted Service Level Agreements? Kanakkupillai offers expert SLA drafting services tailored to your business needs, ensuring compliance, clarity, and contractual protection. We provide:

• Expert Legal Team: Our team comprises qualified Company Secretaries and legal professionals with deep expertise in Indian contract law and IT regulations. You receive accurate and enforceable agreements from legal specialists.
• Customized SLA Drafting: No generic templates. Each Service Level Agreement is tailored to the specific industry, business model, and operational requirements of the client.
• End-to-End Support: Services include everything from drafting to stamping, e-signing, and guidance on execution or enforcement in the event of disputes.
• Regulatory Compliance: From initial consultation to drafting, stamping, e-signing, and execution support, we provide complete SLA lifecycle assistance. Need help with enforcement or a dispute? We are with you.
• Clarity and Precision: SLAs are drafted in clear language with professionally structured clauses covering scope, liability, confidentiality, dispute resolution, and more.
• Peace of Mind: Choosing Kanakkupillai means securing strong legal protection, improving service relationships, and minimizing contract risks.