Performance, Service Levels and Service Credits Clauses (Outsourcing)

Summary

These clauses on performance, service levels and service credits define the standards that the supplier must meet when providing the services to a customer under an outsourcing agreement. These clauses are likely to form the basis of any claim for damages in the event of supplier failures. These clauses include practical guidance and drafting notes. The description of services is critically important. It is often drafted by the supplier's commercial team with input from the customer, but should be reviewed by counsel. The customer's advisers should ensure that the language used is clear and precise, and avoids caveats and conditions such as "subject to the customer performing its obligations". The proper mechanism for providing the supplier with relief from performance in the event of a failure of the customer is the customer responsibilities and dependencies regime. Service levels define the standard to which the services must be provided. They are commonly described as providing ...