Ensure your service targets in your SaaS contract works!

Ensure your service targets in your SaaS contract works!

If you are a supplier of programmatic technology platforms, you probably use a SaaS agreement with an uptime/availability service level agreement with your customers.

Define targets

You may have agreed to provide for example, service credits for failures of your platform to meet the agreed uptime/ availability service level targets. Make sure you clearly define to your client what your target is and how the service credits will be calculated.

Define service hours

A key consideration is what hours is the service is to be available? 24/7 is a good choice for a supplier because in practice, this can lead to there needing to be a considerable downtime required before service credits are incurred.

For example, a 98% service level target would mean nearly 15 hours in a 31-day period of downtime is required before service credits are incurred, whereas on an 8am to 6pm weekday service, around just 4 hours of downtime may be sufficient to trigger service credits.

Be inventive

A programmatic supplier may also wish to implement other liability restrictions to protect itself, capping the payment of service credits payable in any period of time e.g. per month or per annum.

Be inventive with your SLA’s so that they work with a view to retaining business. It can save both parties time and money if there are these mechanisms in place from the outset, so that unhappy customers and suppliers can resolve disputes internally without any surprises or controversy and avoid having to resort to costly technical litigation.

If you don’t provide for an SLA in respect of uptime considerations and a remedy e.g. service credits, a failure with respect to uptime could cost you dearly if a customer claims for breach of contract.

Avoid breach of contract

Utilising an SLA and providing for service credits and having a clear statement saying that service credits are the sole and exclusive remedy in the case of failure by the supplier to achieve the agreed targets. This ensures that a supplier is only responsible for providing a poorer service as opposed to being guilty of a potential breach of contract.

By | 2016-10-27T15:06:08+00:00 October 27th, 2016|News|0 Comments