A SaaS Agreement governs access to cloud-hosted software services, typically under a subscription model. This playbook covers service uptime, data ownership, termination, and liability limitations for cloud-based offerings.
Why This Matters: Unclear or unenforceable SLAs can result in inadequate service, disputes, and lack of recourse.
Negotiation strategy
If you're the Provider:
Ensure SLAs are realistic and enforceable. Verify that penalties and remedies are clearly defined to protect interests.
If you're the Customer:
Negotiate achievable performance metrics and ensure remedies are proportionate to service failures.
Essential elements
1
Performance Metrics
Defines expected service performance.
2
Uptime Guarantees
Specifies minimum service availability.
3
Remedies for Non-Compliance
Outlines penalties for service failures.
Action framework
ACCEPT
Propose edits if SLAs are not aligned with industry standards or business goals.
EDIT
Reject if SLAs are vague or unenforceable.
ADD
Add SLAs if missing to define performance expectations and remedies.
PRO TIP
Consult with technical teams to validate performance metrics and ensure they reflect industry standards.
Example clauses
FAVORABLE
Preferred SLA Clause
"The Service Provider shall maintain a minimum uptime of 99.9% and provide remedies including service credits for any failure to meet this standard."
NEUTRAL
Fallback SLA Clause
"The Service Provider shall use commercially reasonable efforts to maintain service levels, with remedies to be negotiated in case of non-compliance."
UNFAVORABLE
Vague SLA Terms
"The Service Provider will strive to maintain service levels without specific metrics or remedies outlined."
Fallbacks
High-Risk Services
High-risk services require stringent SLAs with robust remedies and penalties. Ensure alignment with risk management strategies.
Standard Services
For standard services, ensure SLAs are clear and enforceable but may allow for more flexibility in remedies.
Emerging Technologies
SLAs for emerging technologies should consider rapid changes and potential for unforeseen service issues.
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WEEK 2
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WEEK 3
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