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eSign Your Service Level Agreement with Aadhaar

Commit to uptime, response times, and penalties with legally valid Aadhaar eSignatures. Governed by the Indian Contract Act 1872. Rs. 15 per signature.

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By Aditi Sharma, Legal & Compliance Counsel·Last updated April 2026
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What is a Service Level Agreement?

A Service Level Agreement (SLA) is a contract between a service provider and a customer that defines the measurable performance standards the provider commits to meet. Unlike a general services agreement, which focuses on scope of work and commercial terms, an SLA is specifically about performance: uptime percentages, response times, resolution times, throughput, accuracy, and the penalties that apply when the provider fails to meet them. SLAs are the operational backbone of SaaS, cloud infrastructure, IT services, BPO, managed services, and any other recurring service where the quality of delivery directly affects the customer's business.

In the Indian market, SLAs have become critical as enterprise buyers demand the same service guarantees they get from global vendors. A typical SaaS SLA commits to 99.9 percent monthly uptime, with service credits of 10 to 25 percent of monthly fees if uptime drops below 99 percent, and termination rights if it drops below 95 percent for two consecutive months. IT services SLAs commit to ticket response times segmented by priority (P1, P2, P3, P4) and resolution times measured against business hours or calendar hours. BPO SLAs commit to call answer rates, average handle times, quality scores from audit samples, and first-call resolution percentages.

SLAs are governed by the Indian Contract Act, 1872 and are fully enforceable. The Supreme Court and various high courts have held that liquidated damages clauses (which service credits essentially are) are enforceable under Section 74 of the Indian Contract Act, provided the amount is a genuine pre-estimate of loss and not a penalty. Indian courts have shown willingness to enforce SLA service credit mechanisms in commercial disputes, particularly when the customer has clearly suffered loss due to the provider's failure to meet committed service levels.

SLAs are almost always signed between two parties (the provider and the customer), sometimes with a parent company guarantor added. Aadhaar eSign is a clean fit because both parties typically have Indian signatories, and the document is often renewed annually. Uploading, signing, and archiving SLAs through SignSetu takes under five minutes per cycle.

Who needs a service level agreement?

SaaS and cloud providers

Commit to uptime, availability, and response times for enterprise customers in India and use SignSetu for fast execution.

IT services and managed services firms

Formalize ticket response times, resolution SLAs, and quarterly performance reviews with enterprise clients.

BPO and customer support providers

Document call handling, quality scores, and first-call resolution commitments with penalty mechanisms.

Enterprise buyers of outsourced services

Hold your vendors accountable with a legally enforceable SLA instead of informal service expectations.

Legal framework

Legally valid under Indian law

Service Level Agreements are fully eligible for Aadhaar eSign under Section 3A of the IT Act, 2000. They are commercial contracts governed by the Indian Contract Act, 1872 and are enforceable in civil court or through arbitration. The enforceability of service credit mechanisms (the liquidated damages that kick in when the provider misses its committed levels) rests on Section 74 of the Indian Contract Act, which allows courts to award reasonable compensation not exceeding the amount named in the contract. Indian courts have consistently held that service credits, when they represent a genuine pre-estimate of loss, are enforceable without the customer having to prove actual damages, as long as the amount is not excessive or punitive. The Supreme Court decision in ONGC v. Saw Pipes and subsequent judgments have established this principle firmly. Stamp duty for SLAs varies by state: typically Rs. 100 to Rs. 500 for the main agreement, though many businesses execute SLAs on plain paper with Aadhaar eSign, relying on the statutory presumption under Section 85B of the Indian Evidence Act for electronic records. The eSigned PDF is admissible as evidence under Section 65B of the Evidence Act. SLAs with foreign parties (for example, where the Indian customer is contracting with a US SaaS vendor) often combine Aadhaar eSign for the Indian signatory with DocuSign or similar for the foreign signatory, and the combined document is legally valid.

Primary reference: Indian Contract Act 1872 + Section 3A, IT Act 2000

Important note

Draft your service credits as a genuine pre-estimate of loss, not as a penalty. Excessive or punitive amounts may be read down by courts under Section 74 of the Indian Contract Act.

Essential clauses

  • Parties to the agreement with authorized signatories
  • Scope of services covered by the SLA
  • Service level commitments with specific, measurable metrics (uptime %, response time, resolution time)
  • Measurement methodology and reporting cadence
  • Service credits or penalty mechanism for missed SLAs
  • Exclusions and carve-outs (scheduled maintenance, force majeure, customer-caused issues)
  • Escalation path for critical incidents
  • Review and amendment process for service levels
  • Termination rights if SLA failures persist beyond agreed thresholds
  • Limitation of liability and cap on aggregate service credits
  • Governing law and dispute resolution mechanism

Ready to eSign your service level agreement?

Drop your PDF and get it signed with Aadhaar in 2 minutes. Provider + customer = Rs. 30.

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Common mistakes

Setting SLA commitments that the provider cannot realistically meet, leading to constant service credit payouts
Using vague metrics like 'best effort' or 'industry standard' instead of specific percentages and time windows
Forgetting to define how uptime is measured (calendar hours vs business hours, at the infrastructure or application layer)
Missing the exclusions list, so the provider is penalized for downtime caused by the customer's own network
Drafting service credits so high that a court reads them down as a penalty under Section 74
Not specifying the escalation path, so minor issues become CEO-level fires
Leaving out the cap on aggregate service credits, exposing the provider to unlimited downside

How to eSign online

  1. 1

    Upload the SLA PDF

    Draft the SLA with specific metrics, measurement methodology, and service credit mechanism. Save as PDF and upload to SignSetu.

  2. 2

    Add the provider and customer as signers

    Enter the name and email of both authorized signatories. Each party receives a secure signing link.

  3. 3

    Both parties sign with Aadhaar OTP

    Each party signs independently from their own location. Aadhaar OTP verifies identity. The final SLA lands in both inboxes within minutes.

FAQs

Are service credits in an SLA legally enforceable in India?
Yes, under Section 74 of the Indian Contract Act 1872, as long as they represent a genuine pre-estimate of loss and not an excessive penalty. Indian courts have consistently enforced SLA service credit mechanisms in commercial disputes.
What is the difference between an SLA and a service agreement?
A service agreement focuses on scope of work, deliverables, payment terms, and the overall commercial relationship. An SLA focuses specifically on measurable performance metrics (uptime, response time, resolution time) and the penalties for missing them. Many enterprise deals have both: a master service agreement plus a separate SLA.
What uptime should I commit to in an Indian SaaS SLA?
Most Indian SaaS vendors commit to 99.9 percent monthly uptime for enterprise customers, with service credits kicking in below 99 percent. Some offer 99.95 percent for premium tiers. Going above 99.95 percent is difficult without significant infrastructure investment and multiple availability zones.
Can I eSign an SLA with a foreign vendor?
If the foreign vendor does not have Aadhaar, you will need a hybrid approach: the Indian party eSigns via Aadhaar, the foreign party signs via DocuSign or similar. The combined document is legally valid in India.
Does an SLA need stamp paper?
Not strictly for enforceability. Many Indian businesses execute SLAs on plain paper via Aadhaar eSign. However, for very high-value SLAs (above Rs. 1 crore annual fees), using Rs. 500 stamp paper adds evidentiary weight if the agreement is ever disputed.
Can SLA metrics be changed mid-term?
Only through an amendment or addendum signed by both parties. The SLA should include a review clause that allows periodic revisions with mutual consent, typically quarterly or semi-annually.
Should I cap the total service credits in the SLA?
Yes. Providers usually cap aggregate service credits at 50 to 100 percent of the monthly fees for that period. Without a cap, a sustained outage could expose the provider to unlimited liability, which is not commercially sustainable.

On this page

What is a Service Level Agreement?Who needs a service level agreement?Legal frameworkEssential clausesCommon mistakesHow to eSign onlineFAQs

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