Last reviewed 10 September 2026
Repeated outages, degraded performance or a supplier that misses its response times can be as damaging as a supplier that fails altogether, particularly where the platform sits at the centre of how the business operates.
Software as a service agreements in England and Wales are usually supplier drafted, with a service level appendix, a service credit regime, a broad limitation of liability and a termination clause that is narrower than customers expect. The remedy you have is largely the remedy the contract gave you.
This guide is general information about handling SaaS service failures. It is not legal advice, and you should take advice on your own circumstances before suspending payment or serving a termination notice.
Read the service level schedule closely
Check how availability is defined and measured, over what period, and what is excluded. Scheduled maintenance, emergency maintenance, third party network problems and issues attributed to the customer environment are commonly carved out, and those exclusions do much of the work.
Then check the support commitments separately. Response time is not resolution time, and many contracts commit only to acknowledging a ticket within a period, with priority levels defined by the supplier's own assessment.
How service credits usually work
Service credits are typically a percentage of the monthly fee, calculated on a sliding scale, capped at a proportion of that month's charges, and frequently expressed as the sole and exclusive remedy for a failure to meet the service level.
They are also often claim based, meaning you must request them in writing within a stated window or lose them. Businesses regularly fail to claim, then find the credits are treated as the only remedy for the same period.
Build the record while the problem is live
Log every incident with the date, start and end times, ticket references, the supplier's status page, screenshots and the operational impact on your team and customers. Independent monitoring evidence is more persuasive than the supplier's own reporting.
Raise each incident formally through the contractual support route rather than through informal messages to an account manager, so that the record matches the process the contract requires.
Escalation that gets a result
Most SaaS contracts contain an escalation or governance provision, sometimes with named contacts and a meeting cadence. Use it, and follow up in writing with a summary of what was agreed and by when.
A structured letter setting out the incident record against the service levels, the credits claimed and the remediation plan sought is far more effective than a general complaint. Suppliers respond to specificity, particularly close to renewal.
Termination and getting your data out
Termination rights for persistent service failure are often narrow and defined by thresholds, such as a set number of failures in a rolling period. Where the contract has a fixed term with automatic renewal, note the notice deadline, because missing it can lock in another term.
Before terminating, deal with the exit: what data you can extract, in what format, over what period, whether the supplier charges for migration assistance and when your data will be deleted. Losing access at short notice is often worse than the outages.
Negotiating better terms at renewal
Renewal is the point of maximum leverage. Sensible asks include a meaningful availability commitment, credits that are not the exclusive remedy, a termination right for repeated failures, a clear exit assistance period and a liability cap that reflects the importance of the service.
Ask for the previous period's actual uptime figures during the negotiation. A supplier that will not share them has told you something useful about the service you are buying.
Key points
- Availability definitions and exclusions decide whether a service level was missed.
- Response time commitments are not resolution commitments.
- Service credits are often claim based and expressed as the exclusive remedy.
- Log incidents formally through the contractual support route.
- Check termination thresholds and renewal notice deadlines early.
- Plan data extraction before serving any termination notice.
Frequently asked questions
- Can I claim my business losses for a SaaS outage?
- Often not beyond the service credits, because many agreements state that credits are the exclusive remedy and exclude indirect loss and loss of profit, subject to an overall cap. The wording of the liability and service level clauses decides it.
- Do service credits happen automatically?
- Frequently not. Many contracts require a written claim within a set period after the affected month, and credits that are not claimed in time are lost.
- Can I stop paying while the service is unreliable?
- That is risky. Most agreements require payment regardless and allow suspension of the service for non payment, which can leave you without access to your own data. Take advice before withholding.
- When can I terminate for poor service?
- Usually only where the contract provides a right, often defined by a threshold of failures over a period, or where the breach is serious enough at general law. Fixed terms and renewal notice periods also affect timing.
- What should I secure before leaving a supplier?
- Confirmation of the export format, the period during which data remains available, any migration assistance and the cost of it, and written confirmation of when your data will be deleted from their systems.