Our last blog discusses the importance of having a correct Service Level Agreement in place.
However, to do this, you must first understand what your SLA should consist of. In this blog, we will explain the essential elements your SLA should have to ensure your logistics business remains compliant.
Defines the service
It is important that the completion of services to which the SLA relates be clearly clarified, along with any deadlines. To ensure that Service Level Agreements are properly defined, they should always include very precise details.
SLA’s should always include provisions in regard to how much the subcontractor is to be paid for the service, when this is due to be paid, and what will be included in the payment (expenses, taxes, travel, etc.)
In a situation where payment is late, actions for invoicing and penalties should also be clearly explained within the SLA.
Representation and warranties
This section provides detailed information on the service that the subcontractor has been contracted to complete. The clause may include the following:
- That the services will be performed to industry standards
- That no third-party rights are infringed as a result of the contractor’s performance
- That any agreements the supplier may have are not violated by the performance of the contract
There should be a point included in the SLA stating that the subcontractor must indemnify the company that has hired them if they do not complete the representations and warranties set out in the contract.
Indemnification addresses any costs that the company will be required to pay in relation to any third-party claims against them due to the subcontractor’s failure to perform their representations and warranties – the business would indemnify the subcontractor for the costs paid to the third party.
The SLA must have a clause recognising what will happen in the case that any confidential information is exchanged between either party and an outside third party. This should explain how the information will be identified, how it will be handled, and what the restrictions on disclosure and misuse are.
When drafting SLAs, you should always try to include a force majeure clause that addresses the possibility that the service cannot be provided due to acts of war, strikes, bad weather, or any other circumstances beyond human control.
The following clauses should be included in all contracts of this kind and are essential:
If you own a logistics company that engages a self-employed workforce and are looking for reassurance that your Service Level Agreement is compliant, Wise can help! At Wise, we have an expert in-house compliance team that can:
- Assist you with any legal matters in regard to contract law and employment law, at no extra cost to you
- Provide you with the guidance you need and ensure there are no hidden or potential risks that may affect either your self-employment status or commercial elements of your business.
- Conduct a FREE status audit, providing recommendations to strengthen your existing terms.
- Review your contract for services and either assist you in making the contract compliant or provide you with a new one.
Interested? Enquire below