What are a policy and a service level agreement (SLA)?

A policy is a written set of rules and regulations that defines and steers the desired behaviour or permitted actions within a system, organisation or process, for instance an IAM policy; an SLA is a contractual agreement between client and contractor that defines the expected services, quality standards and responsibilities for a service in a clear, measurable way.

Trust between federated domains is usually formalised in SLAs.

Go deeper:

• Service-level agreement (Wikipedia) — what an SLA fixes between provider and customer.