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In the computer world, an "SLA" may refer to either 1) a software license agreement, or 2) a service level agreement.

1. Software License Agreement

A software license agreement (also called an end user license agreement or EULA) is a contract between the software developer and the user. While boxed software used to come with a hard copy of the SLA, most software license agreements are now distributed digitally. For example, the software license agreement is usually displayed on your screen during the software installation process. After scrolling through an SLA, you will typically see a button that says, "I Agree" or "I Accept." By clicking the button, you agree to the terms of the SLA and therefore are allowed to install and use the software.

Most software license agreements are rather long and contain a lot of legal terms. The SLA may include license limitations, such as how many people can use the software and how many systems the software may be installed on. Most SLAs also include disclaimers that state the developer is not liable for problems caused by the software. While these disclaimers are often several paragraphs in length, they are basically saying, "Use at your own risk."

2. Service Level Agreement

A service level agreement is a contract between a service provider and a user. In most cases, the agreement is between a business and a consumer, though SLAs may be established between two business as well. In either case, the SLA defines specific services that are guaranteed over a given amount of time, often for a specific price.

A common example of a service level agreement is a computer warranty that covers the parts and labor of a computer. The warranty may state that the manufacturer agrees to cover any service costs due to failed components for one or more years. Other SLA examples include monthly contracts with ISPs, or annual contracts with cell phone companies. In both instances, the companies agree to provide reliable services to customers as long as they pay their monthly subscription fee.

Updated: July 24, 2012

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