Are service credits a customer's only remedy under an SLA?

Often yes. Providers usually draft credits as the exclusive remedy, so customers should negotiate a termination right for chronic failure.

How is uptime measured?

Per the agreed window (usually monthly) excluding planned maintenance; the measurement method must be defined or the metric is unenforceable.

What is a typical uptime target in a SaaS SLA?

Most SaaS providers offer 99.9% monthly uptime ("three nines"), which allows about 44 minutes of downtime per month; mission-critical services may require 99.95% or higher.

Can a customer terminate if the provider repeatedly misses SLA targets?

Only if the SLA includes a chronic-failure termination right. Without it, the customer is typically limited to service credits regardless of how often targets are missed.

Who bears the burden of proving an SLA breach?

Usually the customer, unless the SLA places a reporting duty on the provider. Agreeing on a shared monitoring tool or provider-generated reports avoids later factual disputes.

Service Level Agreement (SLA)

Defines measurable service standards (uptime, response times) and the credits or remedies when they are missed.

What it is

An SLA sets quantified performance targets for a service (availability, response and resolution times, capacity) and the consequences if the provider falls short, usually service credits. It turns vague quality promises into measurable obligations.

Why it matters

For SaaS and managed services, performance is the product. A clear SLA aligns expectations, gives the customer a remedy short of termination, and protects the provider by capping that remedy at agreed credits.

How to apply it

Define each metric, its measurement method and the measurement window.
Set service credits as a percentage of fees, tiered by severity of the breach.
Carve out planned maintenance and force majeure from availability calculations.
Add an escalation path and, for chronic failure, a termination trigger.

Sample wording

The Provider shall maintain 99.9% monthly availability of the Service. For each 0.1% below target, the Customer receives a service credit of 5% of the monthly fee, up to a maximum of 50%.

Negotiation tips

• Customers should make chronic SLA failure a ground for termination, not just credits.
• Providers should make service credits the sole remedy for missed targets.

Common pitfalls

• Setting metrics with no agreed measurement method, making breach impossible to prove.
• Forgetting to exclude scheduled maintenance from uptime calculations.

Legal references

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

Frequently asked questions

Common questions about this clause.