Legal Requirements for SLAs: Is Stamp Paper Necessary for IT Service Agreements?

Does a service level agreement (SLA) between a company and its partner who is providing some IT service have to be on stamp paper or franked? Can it be signed on plain paper and still be legally accountable? If it's to be on stamp paper, what denomination is recommended?

Dear Vputhran,

There are two limbs to this query. One relates to the Registration modality, and the other relates to the Evidentiary value subsequently. In my view, as per the Registration Act, if you want to get the same registered, it has to be on the Stamp Paper of appropriate value. The stamp paper and franked paper are on equal footing nowadays. In usual practice, a Rs. 100/- Stamp Paper is used for this purpose. Insofar as evidentiary value is concerned, subsequently, the fact of procuring the stamp paper for a particular purpose (when anybody goes to procure a stamp paper, they have to sign the register and mention the purpose for which the stamp paper is required). Then the same has to be witnessed and notarized or affirmed by the Oath Commissioner, which makes it binding on the signatory parties. An equally effective alternative to the SLA could be a Memorandum of Understanding. For any further query clarification, you are most welcome.

Thank you, Deepak, for your response. My question pertains to two fronts:

a) In the case of a breach of service terms, let's say in terms of performance, I want to take my vendor to court. At that point, should my agreement have been on stamp paper or plain paper, and which is enforceable?

b) From the perspective of best practices and practicality, what is the norm in business circles for SLAs?

Please review and let me know if you need further corrections.

Dear Vputhran,

Insofar as the deficiency of the value of the stamp paper is concerned, the same can be cured subsequently before going for the registration, or initiating and prosecuting legal remedy.

The other question is about the evidentiary value of the SLA. For this reason, I have stated, "In usual practice, Rs. 100/- Stamp Paper is used for this purpose. Insofar as evidentiary value is concerned, then subsequently the fact of procuring the stamp paper for a particular purpose (when anybody goes to procure a stamp paper, he has to sign the register and mention the purpose for which the stamp paper is required). Then the same has to be witnessed and notarized or affirmed by the Oath Commissioner, which makes it binding on the signatory parties."

For all practical purposes, a completed, signed, executed, and witnessed SLA is an enforceable contract and has a binding force. For registered and unregistered documents, kindly see sections 17 and 49 of the Indian Registration Act. I hope this satisfies your query. All the best and God Bless.