ABSTRACT

Service level agreements frequently contain terms that cap the supplier’s liability for service level or performance credits at a percentage of the fees paid by the customer to the supplier. The following types of service level provisions are commonly found in the body or terms and conditions of an IT agreement. These types of provisions contain terms specific to service level failures and improvements over time. Where the root cause analysis reveals that the service level failure was not caused by the supplier, the agreement should require that the supplier continuously and timely cooperate with the customer to correct the failure. As part of the service levels provided by the supplier to the customer, a common requirement is that the supplier provides cost and efficiency reviews of the services being provided and for the supplier to make recommendations to the customer for reducing the cost of the services.