Service Level Agreement (SLA)
SERVICE LEVEL AGREEMENT (SLA)
This Service Level Agreement (the "SLA" or "Agreement") is entered into as of [Effective Date] (the "Effective Date"), by and between:
[Provider Name], located at [Provider Address] (the "Service Provider"); and
[Customer Name], located at [Customer Address] (the "Customer").
The Service Provider and Customer are collectively referred to as the "Parties."
1. SERVICES AND SCOPE
1.1 Services. This SLA governs the following services provided by Service Provider to Customer:
[Service Description]
1.2 Service Hours. The services shall be available [Service Hours].
1.3 Term. This SLA shall remain in effect for [Agreement Term].
2. SERVICE LEVEL COMMITMENTS
2.1 Availability / Uptime. Service Provider commits to maintain service availability of at least [Uptime Commitment], measured on a monthly basis, excluding scheduled maintenance and SLA exclusions.
2.2 Incident Response Time. For critical (Priority 1) incidents, Service Provider shall acknowledge and respond to Customer's report [Response Time] of notification.
2.3 Resolution Time. Service Provider shall target resolution of critical (Priority 1) incidents [Resolution Time] of initial report.
2.4 Scheduled Maintenance. Planned maintenance windows shall be [Maintenance Window]. Downtime during notified maintenance windows is excluded from uptime calculations.
3. SERVICE CREDITS
3.1 Credit Schedule. In the event Service Provider fails to meet the uptime commitment in Section 2.1, Customer shall be entitled to service credits as follows:
[Credit Structure]
3.2 Credit Cap. The maximum aggregate service credit in any calendar month shall not exceed [Credit Cap].
3.3 Credit Process. Customer must request a service credit within thirty (30) days of the month in which the SLA failure occurred. Credits shall be applied against Customer's next invoice and are non-refundable as cash.
3.4 Exclusive Remedy. Service credits constitute Customer's sole and exclusive remedy for Service Provider's failure to meet the service level commitments in this SLA.
4. SLA EXCLUSIONS
The following conditions are excluded from SLA calculations and do not constitute downtime for purposes of the uptime commitment:
[Credit Exclusions]
5. SUPPORT AND INCIDENT REPORTING
5.1 Reporting Incidents. Customer shall report all service incidents through the following support channel: [Support Channel].
5.2 Cooperation. Customer shall cooperate reasonably with Service Provider in investigating and resolving incidents, including providing access, logs, and information reasonably requested.
6. GENERAL PROVISIONS
6.1 Governing Law. This SLA shall be governed by the laws of the State of [Governing State], without regard to conflict of law principles.
6.2 Modification. Service Provider may update this SLA upon thirty (30) days' written notice to Customer. Customer's continued use of the services after the effective date of any update constitutes acceptance.
6.3 Order of Precedence. In the event of conflict between this SLA and any master services agreement between the Parties, the master services agreement shall control unless this SLA expressly states otherwise.
6.4 Entire Agreement. This SLA, together with any accompanying service agreement, constitutes the entire agreement of the Parties regarding service levels.
6.5 Counterparts. This Agreement may be executed in counterparts. Electronic signatures are valid under the E-SIGN Act.
IN WITNESS WHEREOF, the Parties have executed this Service Level Agreement as of the Effective Date written above.
SERVICE PROVIDER:
Signature: _______________________________ Date: _______________
Printed Name: _______________________________
Title: _______________________________
Company: [Provider Name]
CUSTOMER:
Signature: _______________________________ Date: _______________
Printed Name: _______________________________
Title: _______________________________
Company: [Customer Name]
Service Provider
________________
Signature
Customer
________________
Signature
What Is a Service Level Agreement (SLA)?
A Service Level Agreement (SLA) in the United States governs the relationship between the parties by fixing what each must do.
The defining characteristic of an SLA — what distinguishes it from a general service contract or master services agreement — is the use of quantified, objectively measurable performance metrics rather than qualitative service descriptions. An SLA does not promise to provide 'excellent' or 'high-quality' service; it commits to a specific uptime percentage (99.9%, 99.95%, 99.99%), a specific incident response time (15 minutes for Priority 1 incidents, 2 hours for Priority 2), a specific resolution time (4 hours for critical outages, 24 hours for standard issues), or a specific throughput standard (95th percentile API response time not to exceed 200 milliseconds). These metrics create objective accountability and make disputes about service quality determinable from monitoring data rather than subjective judgment.
SLAs appear in several structural forms in U.S. commercial practice. A standalone SLA is a separate agreement defining service levels for one or more services, typically attached as an exhibit to a master services agreement or subscription agreement. A multilevel SLA distinguishes between corporate-level standards (applying to all customers), customer-level standards (customized for a specific customer tier or contract value), and service-level standards (specific to individual service components). Technology providers including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform publish publicly available SLAs for each service tier, and enterprise customers negotiate supplementary contractual SLAs that provide additional commitments beyond the public terms.
From a damages perspective, SLAs interact critically with limitation of liability clauses found in most commercial service contracts. Many SLAs provide service credits (reductions in future invoices) as the customer's exclusive remedy for SLA breaches, and the overall contract limits consequential damages. The interplay between the SLA credit mechanism and the limitation of liability clause determines whether a customer can recover business interruption losses, lost profits, or reputational harm caused by service failures — and in most U.S. commercial contracts, the answer is no unless the contract expressly preserves consequential damages claims for SLA breaches.
When Do You Need a Service Level Agreement (SLA)?
A Service Level Agreement is needed whenever a U.S. business engages a service provider to deliver ongoing services that are measurable, time-sensitive, or critical to the customer's business operations.
Managed IT services and infrastructure outsourcing engagements require SLAs that define uptime for servers, networks, and cloud infrastructure; response and resolution times for help desk tickets categorized by severity; backup and recovery objectives (Recovery Time Objective and Recovery Point Objective for disaster recovery planning); and security incident response timelines. Managed service providers (MSPs) such as Rackspace, Cognizant, and IBM Global Services all use SLAs as the primary performance accountability mechanism in their service contracts.
SaaS platform subscriptions for enterprise software — Salesforce CRM, ServiceNow ITSM, Workday HCM, Oracle ERP Cloud — are structured around SLAs defining platform availability and the service credits payable when uptime commitments are missed. Enterprise buyers negotiating large SaaS contracts routinely negotiate enhanced SLAs with higher uptime commitments, shorter credit calculation windows, and additional remedies beyond the vendor's standard published SLA. The Uniform Computer Information Transactions Act (UCITA), adopted in Maryland and Virginia, provides a statutory framework for software licensing terms including implied warranties that SLAs may expand or disclaim.
Cloud hosting and content delivery network (CDN) services from Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), Cloudflare, and Fastly are governed by published SLAs. AWS's EC2 SLA commits to 99.99% monthly uptime for multi-region configurations and 99.5% for single-region, with service credits of 10% to 30% of monthly charges for failures. Customers whose applications depend on AWS, Azure, or GCP for customer-facing services must confirm their own SLAs with end customers are realistic given the infrastructure provider's SLA commitments.
Telecommunications and internet service agreements with carriers such as AT&T, Verizon Business, Comcast Business, and Lumen Technologies include SLAs for network uptime, latency, packet loss, and jitter. Enterprise Ethernet, MPLS, and SD-WAN services typically carry SLAs with financial credits and, for enterprise contracts, the right to terminate for chronic failure.
Outsourcing agreements for business process outsourcing (BPO), customer service center operations, payroll processing, and financial transaction processing use SLAs to define throughput rates, accuracy standards (e.g., 99.5% data entry accuracy), turnaround times, and quality metrics. The American Institute of Certified Public Accountants (AICPA) SOC 2 framework for service organization controls provides a widely used audit standard that BPO providers use to demonstrate SLA compliance to enterprise customers.
HIPAA Business Associate Agreements (BAAs) for healthcare IT service providers must address the security and availability of systems that contain protected health information (PHI). While HIPAA does not mandate specific SLA terms, the HHS Office for Civil Rights (OCR) expects covered entities to include contractual requirements for system availability and breach notification timelines in their BAAs — which function as a specialized form of SLA for HIPAA-regulated services.
What to Include in Your Service Level Agreement (SLA)
A complete Service Level Agreement for U.S. service providers and customers must address specific provisions to create objective, measurable, and enforceable performance commitments.
The parties and service scope section identifies the service provider and customer by full legal name, state of formation, and principal place of business. The service scope defines precisely which services are subject to the SLA's performance commitments — the SLA should not apply to services in beta, free-tier offerings, or services explicitly excluded in the scope section. Multi-service SLAs may include a service schedule listing each service and its applicable SLA terms separately.
The uptime and availability commitment defines the minimum service availability percentage, the measurement period (typically monthly), the method for calculating availability (total minutes in the period minus downtime minutes, divided by total minutes, expressed as a percentage), and the definition of 'downtime' (complete service unavailability versus degraded performance). The SLA should specify how availability is measured — by the provider's internal monitoring systems (StatusPage, PagerDuty, Datadog), by third-party monitoring (Pingdom, UptimeRobot), or by customer-reported tickets. Measurement methodology disputes are common in SLA litigation; objective, third-party measurement is the most defensible approach.
The incident priority classification defines severity tiers for service incidents. A standard four-tier classification uses: Priority 1/Critical (complete service outage affecting all users, customer's production system down), Priority 2/High (major functionality unavailable, significant customer impact, no workaround), Priority 3/Medium (partial functionality degraded, workaround available), and Priority 4/Low (minor issue, cosmetic, no operational impact). Each priority tier triggers a different response time commitment and resolution time target.
The response time and resolution time commitments specify, for each incident priority tier, the maximum time between the customer's report of the incident and the provider's initial acknowledgment (response time) and the maximum time between initial response and incident resolution (resolution time). These commitments should distinguish between business hours (typically 9:00 AM to 5:00 PM Monday through Friday, excluding federal holidays) and 24/7 support windows for Priority 1 and 2 incidents.
The escalation procedure defines the path for escalating unresolved incidents: from front-line support to senior engineer to engineering manager to VP of Engineering to the CTO, with specific timeframes at each level. The escalation procedure should include named escalation contacts (or contact titles) and direct phone numbers or emergency contact methods for Priority 1 outages.
The service credit schedule specifies the financial remedy for SLA failures. For each tier of availability shortfall (e.g., 99.0%-99.9%, 95.0%-99.0%, below 95.0%), the schedule states the credit percentage of the monthly service fee. The customer's right to request a credit should be conditioned on submitting a written credit request within a defined window (typically 30 days of the incident). Service credits are usually the customer's exclusive remedy absent willful misconduct or gross negligence by the provider — a limitation the customer should seek to negotiate.
The scheduled maintenance and exclusions section defines the maintenance window(s) during which the provider may take the service offline for planned maintenance without those periods counting as downtime for SLA purposes. The notice requirement for scheduled maintenance (typically 72 hours or 7 days for major maintenance) should be specified. Exclusions from SLA coverage should be itemized: customer-caused outages, force majeure events, third-party service failures, failures caused by the customer's hardware or software configurations, and attacks or security incidents originating outside the provider's control.
The measurement and reporting obligations require the provider to deliver a monthly performance report to the customer within a defined period (e.g., 10 business days) after each calendar month, showing actual uptime, incident counts by priority tier, response and resolution times, and any SLA credits owed. Real-time availability monitoring through a status page or dashboard is increasingly required in enterprise SLAs.
Sources & Citations
Statutory citations link to official government sources.
- HIPAAUS – Cornell LII
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Service Level Agreement (SLA) (United States) [Legal document template]. Forms Legal. https://forms-legal.com/usa/business/contracts/service-level-agreement
"Service Level Agreement (SLA) (United States)." Forms Legal, 2026, https://forms-legal.com/usa/business/contracts/service-level-agreement.
@misc{formslegal-service-level-agreement,
author = {{Forms Legal}},
title = {Service Level Agreement (SLA) (United States)},
year = {2026},
howpublished = {\url{https://forms-legal.com/usa/business/contracts/service-level-agreement}},
note = {Free legal document template. Based on Uniform Commercial Code (UCC)}
}
Frequently Asked Questions
A Service Level Agreement (SLA) is legally binding in the United States once the parties capable of contracting sign it with the intent to be bound under Uniform Commercial Code (UCC). American contract law, drawn from the Restatement (Second) of Contracts and each state's common law, recognizes a Service Level Agreement (SLA) as enforceable when it shows offer, acceptance, consideration, and reasonably definite terms. Courts in the state whose law governs the agreement will hold the parties to its written terms unless a party proves fraud, duress, mistake, unconscionability, or that the subject matter is illegal. A signed Service Level Agreement (SLA) carries more evidentiary weight than an oral understanding because the writing fixes what each party promised and reduces later disputes over who agreed to what. To strengthen enforceability, the parties should each keep an original signed copy, date their signatures, and complete every blank rather than leaving terms open to interpretation by a judge.
A Service Level Agreement (SLA) in the United States must satisfy the core elements of a valid contract: mutual assent shown by offer and acceptance, consideration exchanged between the parties, the legal capacity of each signer, and a lawful purpose. The relevant framework is Uniform Commercial Code (UCC) governs how the document is interpreted and enforced. The writing should clearly identify each party by full legal name, describe the rights and obligations of each side, and state the effective date and any term or expiration. Where one party is a business entity, the person signing should hold authority to bind that entity, such as an officer, manager, or member. Specific states may add formalities for certain agreements, so the parties should confirm local rules before signing. A Service Level Agreement (SLA) that omits a material term, leaves the price or duration blank, or fails to identify the parties accurately risks being found too uncertain for a court to enforce.
A Service Level Agreement (SLA) does not require notarization or witnesses to be enforceable in most US states, because a commercial contract takes effect when the parties sign it with the intent to be bound. American contract law makes the agreement valid based on offer, acceptance, and consideration rather than on any formal execution ceremony. Notarization is optional but can add evidentiary weight to a Service Level Agreement (SLA) by making it harder for a signer to deny the signature later, which is useful for high-value or long-term agreements. Certain contracts within the Statute of Frauds, including those that cannot be performed within one year or that involve the sale of goods of $500 or more under Uniform Commercial Code Section 2-201, must at least be in writing and signed by the party to be charged. For a typical Service Level Agreement (SLA), signatures from both parties, with each keeping a dated original, are sufficient to make the agreement binding and provable.
A Service Level Agreement (SLA) can be terminated according to the termination clause it contains, by mutual agreement of the parties, or when one party's material breach excuses the other from further performance. A well-drafted Service Level Agreement (SLA) states how either side may end the relationship, for example on written notice of a defined number of days, on completion of the work, or for cause after a chance to cure. Where the contract is silent, US courts may imply a reasonable notice period for ongoing arrangements, but relying on an implied term invites dispute. Termination does not erase obligations that have already accrued, so amounts owed for work performed before termination usually remain payable. Including clear termination, notice, and survival provisions in a Service Level Agreement (SLA) that cover confidentiality, payment, and dispute resolution after the contract ends gives both parties certainty about how and when the relationship can be wound down.
A Service Level Agreement (SLA) can be amended after signing when all parties agree to the change and record it in writing. Under general US contract principles, an amendment is itself a contract, so it needs the same mutual assent and, in many states, fresh consideration or a signed written modification to be enforceable. The cleanest method is a dated amendment or addendum that identifies the original Service Level Agreement (SLA), states exactly which sections change, and is signed by everyone who signed the original. Striking through or handwriting edits on the signed original invites disputes about who approved the change and when, so a separate written amendment is the preferred approach. Where the agreement contains a 'no oral modification' clause, only a signed writing will alter the terms, and informal promises to change the deal will not bind the parties. Keeping each amendment attached to the original Service Level Agreement (SLA) preserves a complete record of the parties' final agreement.
A Service Level Agreement (SLA) does not require a lawyer in most routine situations, and many individuals and small businesses prepare one using a clear written template that covers the standard terms. American law does not condition the validity of a Service Level Agreement (SLA) on attorney involvement; what matters is that the parties understand the terms and sign voluntarily. Legal review becomes worthwhile when the amounts at stake are large, the relationship is complex, the parties are in different states, or the agreement involves unusual conditions, tax consequences, or rights that are difficult to reverse. An attorney can confirm the document complies with the governing state's law and tailor clauses such as indemnification, dispute resolution, and termination. For straightforward matters, a carefully completed Service Level Agreement (SLA) from forms-legal.com gives the parties a solid written record; consulting a licensed attorney remains the safer path whenever the consequences of a mistake would be costly or hard to undo.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Marketing Services Agreement
Engaging a marketing agency, freelance marketer, or digital advertising consultant? A Marketing Services Agreement protects your business by defining exactly what campaigns will be run, what deliverables are expected, who owns the creative content, and what happens if results fall short. Marketing engagements often involve significant budgets and access to brand assets — a written contract is essential. Our free template covers scope, deliverables, IP ownership, confidentiality, performance reporting, and termination. Fill it out online and download as PDF or Word in minutes.
Web Design Contract
Hiring a web designer or freelance developer? Or delivering web projects as a professional? A Web Design Contract prevents the most common disputes in creative work: scope creep, ownership of the finished site, how many revisions are included, and what happens if the client disappears mid-project. Without a written contract, both sides are exposed. Our free Web Design Contract template covers project scope, revision limits, IP ownership, payment milestones, hosting handoff, and termination. Fill it out and download as PDF or Word.
Barter Agreement
Create a legally binding Barter Agreement for exchanging goods or services without money. This template covers item descriptions, valuations, exchange terms, warranties, and governing law under US contract principles.
Broker Agreement
Define the relationship between a broker and principal with this US Broker Agreement. Covers broker authority, commission structure, exclusivity, duties of care, and termination under applicable state law.