Your SaaS provider went down. Not for an hour — for days, or in repeated incidents that cumulatively crippled your operations. Bookings were lost. Customers churned. Staff were paid to sit idle. The provider’s status page acknowledged the outage and offered “service credits” worth a fraction of your actual exposure. The terms of service appear to limit liability to the most recent month’s fees.
SLA caps and liability limitations are routinely overstated in negotiations and frequently unenforceable in fact. Where the provider has materially breached the SLA, contractual and consumer-law arguments often unlock remedies far beyond the headline cap.
The legal context
The SaaS contract typically promises an uptime percentage with credits for breach. Those credits are the contractual remedy in the ordinary course. But where the breach is material, sustained, or caused by negligence (poor change management, inadequate redundancy, missed maintenance), broader remedies arise. Where you are a small business, the Australian Consumer Law’s services guarantees may apply, and unfair-contract-terms provisions can void liability caps in standard-form contracts.
Common pushbacks and why they fail
- “The SLA caps remedies at service credits.” Caps may be unfair contract terms under the ACL when applied to small businesses, and can be void.
- “You agreed to the terms of service.” Click-through agreement does not save unfair terms or terms inconsistent with statutory guarantees.
- “It was a third-party cloud failure.” Your contract is with the provider. Their supply-chain choices are their problem.
- “Force majeure.” Genuine force majeure must meet the contractual definition; “AWS had a bad day” usually does not.
The document and what it does
A Letter of Demand identifies the contract and SLA, sets out the outage timeline and impact, quantifies the loss (lost revenue, payroll cost, customer churn, recovery cost), and demands a remedy beyond the formulaic service credit. It signals that the next step is litigation in the appropriate court and frames the unfair-contract-terms argument where applicable.
What Claim Done delivers
- The SLA and the breach documented precisely
- The loss quantified with supporting categories
- Citation of ACL services guarantees and unfair-contract-terms provisions where available
- Clear deadline and escalation path
- Drafted and sent on letterhead, flat $79
What to expect after
SaaS providers respond to formal demands because their legal team understands that ACL exposure substantially exceeds the contractual cap. Expect a senior commercial response within two to three weeks. If they hold the line at credits, a Final Demand ($79) and a court application sharpen the negotiation considerably.