Clause guide
Service Credits Clause clause: meaning, risks, and what to negotiate
Provides compensation when service levels are not met.
What it means
Service credits can provide financial compensation if the provider fails to meet performance standards.
Common risks
- • Credits may be too small to matter.
- • Credits may be the only remedy.
- • Conditions for receiving credits may be difficult to meet.
What to check before signing
- • How large are the service credits?
- • Are credits automatic or must they be requested?
- • Are credits the sole remedy?
Negotiation ideas
- • Increase service credit percentages.
- • Allow credits to accumulate.
- • Add termination rights for repeated failures.
Example clause
“If uptime falls below 99.9% in any month, Customer shall receive a service credit equal to 10% of the monthly fee.”
Frequently asked questions
What are service credits?
They are fee reductions given when a service provider fails to meet performance commitments.
Want help reviewing the full contract?
A single clause rarely tells the whole story. Scan the full agreement to spot risks, missing protections, and negotiation points across the whole document.