A Service Level Agreement is a contract between a service provider and a customer. It defines the types of services offered, metrics that are used to measure the quality of service, defines workflows that are used to provide the service and also defines remedies to be offered when service metrics are not met.

Service Level Agreements provide details of the services that the seller is committing to offer. Taking an example of SLAs in contracts with technology vendors: 1. The first is resolution time, resolution time is the maximum time before which a vendor has to resolve a client’s support ticket. 2. The second one is availability, this defines the minimum time for which the services provided have to be available for the customer.

Service Level Agreements also include the rights and responsibilities of both parties in detail. They help reduce the risk for both parties by bringing clarity with regards to the business objectives and the details of penalties and remedies that the service provider offers.