This clause promises the software will be available and working a certain percentage of the time—usually 99%, 99.5%, or 99.9%. It matters because if the service is down, you can't work, serve customers, or make money. The vendor is legally committing to a specific performance standard. If they miss it, they typically owe you a credit (a refund of part of your fees) or, in rare cases, you can terminate the contract. This is high-risk because even small differences matter: 99% uptime means 7 hours of downtime per month, while 99.9% means only 43 minutes—a huge difference for critical business functions.
Match the uptime percentage to how critical the service is—if it's essential to your business, demand 99.9% minimum, not 99%. Check what "uptime" actually means: does it include planned maintenance windows? Does it count if only some users are affected? Ensure the credit you receive (usually 5-10% of monthly fees) actually compensates you for lost business, and add a termination right if uptime drops below the guarantee for two consecutive months. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause promises the software will be available and working a certain percentage of the time—usually 99%, 99.5%, or 99.9%.
Why should I care about this clause?
It matters because if the service is down, you can't work, serve customers, or make money.
What are my options?
The vendor is legally committing to a specific performance standard.
How does this affect small businesses?
If they miss it, they typically owe you a credit (a refund of part of your fees) or, in rare cases, you can terminate the contract.