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Can a company be held liable for not meeting the service level agreement outlined in a contract?

I recently entered into a contract with a software development company to build a custom application for my business. The contract included a service level agreement (SLA) that outlined specific performance metrics and guarantees for the software. However, since the project started, the company has consistently failed to meet these performance metrics, causing significant delays and impacting the functionality of the application. I want to understand if the company can be held legally liable for not meeting the SLA and if I have any recourse to seek compensation or terminate the contract due to their failure to meet the agreed-upon terms.

Jeff G.

Answered Dec 27, 2024

Yes. A SLA in a written contract is part of that contract. And even without a specifically-stated remedy, you may be able to sue for breach. It's not all cut-and-dried, however, as there can be a multitude of other contractual limitations or considerations that would need to be considered after a thorough review of the agreement, the documentation of the work that's been done and any type of waivers provided for missing the SLAs.