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Difference Between Contract And Service Level Agreement

In order for the defined metrics to be useful, it is necessary to define an appropriate baseline, with the measures being adapted to an appropriate and achievable level of performance. It is likely that this baseline will be redefined throughout the parties` participation in the agreement, using the processes defined in the “Regular Review and Amendment” section of the AA. A service level agreement is a formal or informal contract between the end user of the service, internally or externally. It determines what the customer receives and specifies what is expected of the service provider. Customer-based SLA – An agreement with a single group of customers covering all the services they use. For example, an SLA between a vendor (IT service provider) and the finance department of a large organization for services such as financial system, payroll system, billing system, purchase/purchasing system, etc. However, a service level agreement can take the form of a legal or informal contract or form part of a contract. For this way, a service level agreement can be included in a contract, but a contract is not necessarily a service level agreement. Many companies prefer SLAs that are not part of the contract itself, as this allows for a simpler review. Conflict resolution is an area that is typically covered by contracts and service level agreements. The difference lies in the conflict fields that are addressed. As a general rule, contracts govern how conflicts related to breaches of contract are to be resolved or determine how the service provider must be able to remedy its (undefined) defect as soon as it has been informed of this deficiency.

There`s nothing wrong with that, no one wants to constantly change service providers.