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Software as a Service Agreement

What Is a SaaS Agreement?

A Saas Agreement or software as a service agreement dictates the terms and conditions that software licensors and licensees must follow when dealing with an online software delivery model. 

In this world of technological evolution, more and more people are choosing SaaS for their products because it lowers costs, reduces launch time, is easy to use, and can be customised to your unique needs. 

Every SaaS product is unique and so are the agreements to use them. However, certain complications arise when detailing the rights and relationships between software providers and users, as well as the legal rules and regulations the developer of the app and the users must follow. To ensure these factors are made clear from the outset, it is important that a software provider has a SaaS agreement in place. 

At EAGLEGATE Lawyers, we have a team of qualified IP lawyers who have immense experience and knowledge drafting all kinds of software agreements and legal documents. Whether you want us to draft a SaaS agreement that defines the obligations of users, or update an existing SaaS agreement, we can assist.

We offer a free initial consultation to new clients. If you have any queries, we are happy to answer your questions. Book a meeting with us, send us an email or give us a call today.



Drafting a SaaS Agreement

For many business owners, discussions about NDAs, licensing agreements and subscription agreements are often put aside. But for a SaaS-based company, these are extremely crucial documents that can make or break their success. 

Even if most people skip reading the agreement and click, “I agree” in a matter of a few seconds, SaaS-based companies cannot be careless when drafting their agreements. 

The terms of the agreement must be appropriate and must also consider the laws preventing unfair contract terms. At EAGLEGATE we draft agreements with our client’s needs in mind and tailor agreements to our client’s businesses.

We have helped countless businesses and individuals create comprehensive, highly customised software as service agreements. We work with start-ups and established organisations alike. Our aim is to help our clients get the best legal advice -- no matter which industry they belong to. 

Contact SaaS Lawyers Today

There are multiple factors to consider when drafting a SaaS agreement. Much like how every business and every product is unique your SaaS agreement needs to meet your unique needs.

So, rather than wasting time finding the perfect SaaS template agreement online, contact our highly-qualified IP lawyers to draft the agreement for you. 

We offer a free initial consultation to new clients.  Request a free consultation today.

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Important Clauses Found in a SaaS Agreement

Different SaaS agreements have different clauses based on their specific industries, products and services. However, some things that are common amongst all cloud-based software agreements include:

  • Rights: The agreement should contain a clause to prevent users or third parties from using some components of your software to create their own product. These rights preserve your position as owner of the software even after its purchase by the user. This stops the user from reselling, reverse engineering, and unlicensed modification. Additionally, it should determine how much data can a user access and to what extent. Your agreement must detail the metric and have certain penalties set in place for those who abuse the rights. 
  • Customer Service Levels: Most companies pride themselves on prioritising their customers over everything. If you do so, you must let your customers know how you will maintain the ongoing relationship. Will you be available 24/7 to clarify software procedures or queries? How long will it take for you to respond to customer emails? All these questions must be answered. 
  • Data Ownership And Protection - This clause is extremely crucial. It details who has the rights to the data that gets entered into the software. It also lists other important information like:
    • How will the licensor protect the users’ data?
    • How often is the data backed up?
    • Where is the data stored?
    • What happens in the event of a data breach?
    • What happens to the data stored after the services are terminated?
  • Limits Of Liability - This clause protects you from any potential lawsuits. You must list each and every warranty regarding the software and its usage. 
  • Licence Scope - If you want to restrict the licence from being transferred to the subscribers or another person, you must make it clear in the agreement.
  • Software Performance Objectives - This clause lets the user know what they can expect from the software you are providing. It should include:
    • Substantial results they can expect from the software.
    • Performance-related guarantees.
  • Pricing - Since SaaS is a cloud-based method of providing software to the users, you must include a clause stating in what circumstances can the pricing of the software be updated. It should also include the methods of subscription payments the users can adopt.
  • External Service Agreement - This is an agreement between the service provider and its external customers. It outlines acceptable levels of service as well as compensation the customer would receive if the provider fails to provide those services. Therefore, it’s important for providers to be careful when setting a minimum performance level for your SaaS.
  • Software Updates And Support - Your customers must know how you roll out updates for the software. Do you offer adequate access to customers during updates and maintenance? Do you provide any support or feedback during the process? If yes, let them know how and where.
  • Subscription Models - This clause explains in detail what services are offered under different subscription models.
  • Termination And Renewal - This clause states actions that the user must take to terminate their SaaS subscription. It also includes a renewal clause, should they decide to continue with the Saas provider. A termination clause includes what happens when a customer fails to make the payment, breaches the contract, wishes to terminate the subscription. Most SaaS providers have evergreen renewal clauses that automatically renew the contract unless terminated by the user.

 

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Is a SaaS Agreement Different From a Licensing Agreement?

Yes, a SaaS agreement is different from a licensing agreement. In a typical licensing agreement, the software provider delivers the physical software or it is on a disk and it is physically installed on a machine for a one-time or subscription licence fee.  Whereas under a SaaS agreement, no hardware or software is physically installed and customers are granted online access to the software stored on the cloud anytime, anywhere. This ongoing relationship between the licensor and licensee requires a special agreement that protects the rights of both parties.

The terms of a SaaS agreement also differ due to the online delivery of the software. 

 

Additional Agreements SaaS Businesses Use

If you are a SaaS provider you will typically also have associated agreements for your business, such as: 

  • IP registration and transfer agreement 
  • EULAs
  • NDAs
  • Investor, employment, shareholder agreements
  • Master services agreement
  • Terms and Conditions of trade
  • Privacy Policies
  • Contractor Agreements
  • Development Agreements

Our Principal is a former coder and electrical engineer. She has vast experience in IT whch allows her to draft SaaS agreements with her clients' businesses and the impact on those businesses in mind.

Contact us today for a free initial consultation and expert legal advice. We’d be happy to help you with your SaaS and associated agreements.