WHAT IS A SERVICE LEVEL AGREEMENT under Dutch law?
A service level agreement in the Netherlands (SLA) is often used in the IT industry to define which services will be provided by a party and what standards and levels (“levels”) are required to provide that service. However, the conclusion of a service level agreement can also be beneficial in other areas. In the following, we explain the most important features of an SLA and what you should consider when concluding a Service Level Agreement under Dutch law. A Service Level Agreement (SLA) under Dutch law is a legally binding contract that defines the terms and conditions for the provision of services between two parties – a service provider and a client.
Key Points About SLAs Under Dutch Law
- An SLA outlines the specific services to be provided, the expected service levels or performance standards, and the compensation or penalties associated with meeting or failing to meet those standards.
- It is a type of service provision agreement governed by Title 7.7 of the Dutch Civil Code, which sets out the general rules and obligations for such agreements.
- The SLA must clearly specify the scope of work, duration, fees, liabilities, and any other relevant terms agreed upon by the parties.
- It should include measurable service level metrics and a mechanism for monitoring and reporting on service performance.
- The SLA becomes part of the overall contract between the service provider and client, serving as a legal document that binds both parties to the agreed service terms.
- Under Dutch law, both parties have certain obligations, such as the service provider’s duty to exercise due care (zorgvuldigheidsplicht) and follow the client’s reasonable instructions, and the client’s obligation to pay the agreed fees.
- Termination, liability limitations, and dispute resolution procedures are also typically covered in an SLA under Dutch law.
By clearly defining service expectations and responsibilities through an SLA, Dutch law aims to provide legal certainty and protect the interests of both the service provider and the client in a service provision agreement.
CREATE A SERVICE LEVEL AGREEMENT under Dutch law
In general, parties agree on Service Level Agreements in the Netherlands (SLAs) to define how a certain service will be provided by one party to the other. In particular, the quality of the service to be provided is agreed. Service level management, on the other hand, is concerned with monitoring and reporting on the so-called service levels. It ensures that the service levels within the SLAs are monitored and that appropriate measures can be taken if they are not met.
If the services provided do not meet a certain quality condition, they must be improved. Since the quality requirements for the services are defined in advance of an agreement, it is easy to check with an SLA whether they are fulfilled. Therefore, it is recommended to agree on a service level agreement in writing. Based on an SLA, a cost estimate can also be made so that it is known in advance how much the service will cost. The amount of the costs depends on the type of services and the way they are provided. An SLA is also suitable for determining the costs of existing services and realising cost savings if necessary.
What are the consequences of not including essential elements in a Dutch service level agreement?
If essential elements are not included in a Dutch service level agreement (SLA), there can be significant legal consequences:
- Lack of Enforceability: Without clearly defined service levels, scope of services, compensation terms, and other key provisions, the SLA may be deemed invalid or unenforceable under Dutch contract law. This means that neither party would be legally bound by the terms of the agreement.
- Ambiguity and Disputes: The absence of essential elements can lead to ambiguity and differing interpretations of the agreement by the parties involved. This increases the likelihood of disputes arising during the course of service delivery.
- Inability to Measure Performance: If measurable service level metrics are not specified, it becomes difficult or impossible to effectively monitor and evaluate the service provider’s performance against agreed standards.
- Lack of Remedies: Without clear provisions for liabilities, penalties, or remedies in case of non-performance or breach, the client may have limited legal recourse if the service provider fails to meet their obligations.
- Termination Issues: Failure to include termination clauses or procedures for dispute resolution can make it challenging to end the agreement or resolve conflicts in a legally compliant manner.
- Violation of Dutch Contract Law: Dutch law requires contracts, including SLAs, to meet certain essential elements such as legal capacity, certainty, and lawful object. Omitting these can render the agreement void or voidable.
To avoid these consequences, it is crucial to ensure that a Dutch SLA is carefully drafted to include all necessary elements as required by Dutch contract law and industry best practices. Seeking legal advice from experienced Dutch contract lawyers can help mitigate risks and ensure the SLA is valid, enforceable, and protects the interests of both parties.
WHEN DOES A ‘SLA’ MAKE SENSE?
There is no fixed list of services for which you must conclude an SLA. In principle, they can be drawn up for all types. However, it is important that an SLA is specifically tailored to your company or service. An SLA is particularly suitable for services such as ICT, monitoring, facility services or mail delivery. Are you unsure whether a Service Level Agreement is suitable for your planned service? Our English-speaking lawyers at MAAK Advocaten in Amsterdam will be happy to help you and advise you on which agreements are suitable for your industry.
THE TERMINATION OF A SERVICE LEVEL AGREEMENT IN THE NETHERLANDS
A Service Level Agreement is an agreement between the client and the service provider on services to be provided. The termination of a service level agreement can be subject to both legal and contractual rules. Please be well informed about this by a Dutch contract lawyer. In some cases, damages may be payable in addition to termination, or termination may not be legally valid. You should be well informed about this by a Dutch contract lawyer.
THE CONCEPT OF SERVICE IN A Dutch SERVICE LEVEL AGREEMENT (SLA)
The key word in service level agreement is the concept of service – or in other words – service. A SLA therefore refers to services and not products. Product specifications and delivery requirements are handled through other so-called procurement agreements. So the service level agreement is not about achieving a certain goal, but more about the quality and execution of a certain service.
WHAT YOU SHOULD LOOK FOR IN A SERVICE LEVEL AGREEMENT in Holland?
A Service Level Agreement in the Netherlands must contain clearly defined service levels. These levels must be measurable and relevant to the effective performance of the service provider. With well-defined service levels, it is also easier for service level management to check the levels in the contract and compare them with the actual performance of the service provider.
In addition, pay attention to whether the party from whom you obtain your services is itself dependent on third parties. For example, the service provider may not be able to carry out its work because another party fails to do so. So you should have clear agreements about what to do in such situations and exactly which parties are involved.
DUTCH SLA attorney
For any legal inquiries or support in the Netherlands regarding a Service Level Agreement in the Netherlands (SLA), please feel free to contact our adept team at MAAK Advocaten. Committed to excellence, our Dutch lawyers provide superior legal services tailored to your distinct needs. You can reach our law firm in the Netherlands through our website, by email, or phone.
Our approachable and skilled staff at MAAK Attorneys will be delighted to assist you, arranging a meeting with one of our specialized attorneys in the Netherlands. Whether you need a Dutch litigation attorney or a Dutch contract lawyer in Amsterdam, we are eager to guide you through the legal intricacies and secure the most favorable results for your situation.
Contact details
Remko Roosjen | attorney-at-law (‘advocaat’)
+31 (0)20 – 210 31 38
remko.roosjen@maakadvocaten.nl
The information on this legal blog serves purely for educational purposes and should not be taken as specific legal guidance. While we endeavor to maintain accurate and current information, we do not assert its absolute completeness or relevance to your particular situation. For advice tailored to your legal concerns, we urge you to engage with a licensed attorney. Please note that the blog’s content may change without notice, and we are not liable for any inaccuracies or missing information.