What is a SaaS Agreement?

A SaaS agreement, short for Software-as-a-Service agreement, governs the terms under which you access and use software hosted by a provider online. Unlike traditional licenses where you install the software yourself, SaaS offers pay-per-use access via the internet, eliminating the need for local installation and maintenance.

Why Us?

Our experience in drafting, reviewing and advising on SaaS agreements for clients of all sizes ensures we save you time and money by concentrating on the areas of most importance and potential risk or problems down the line for you.

Key Clauses in a SAAS Agreement

While standard terms often favour providers, there’s room for negotiation, especially with smaller providers. Focus on these crucial clauses:

  • Charges and Payment: Understand different fees (subscription, user, storage, support) and their potential for change. Negotiate fixed fees or reasonable increase clauses.
  • Customer Data: Ensure ownership and responsibility for data accuracy remain with you. Define data security practices, backups, and compliance with provider privacy and backup policies.
  • Supplier and Customer Obligations: Review supplier warranties, exclusions, and obligations. Address service disruptions due to network issues and clarify your cooperation and information-sharing responsibilities.
  • Licensing: Though software isn’t physically delivered, licenses are still necessary for online usage. Verify narrowly defined licenses limited to your business needs and confirm the provider has all necessary permissions.

Advantages of SaaS Agreements

  • Cost Savings: Providers benefit from economies of scale, offering you lower costs through shared cloud infrastructure.
  • Simplified Management: The provider handles upgrades and maintenance, freeing you from IT burdens.
  • Accessibility: Access your software from any device with an internet connection.
  • Reduced Hardware and Software Needs: No upfront investment in hardware or software is required.
  • User-Friendly Interfaces: Designed for ease of use with minimal training needed.

Disadvantages of SaaS Agreements

  • Limited Customisation: Most services follow a “one-size-fits-all” model, offering less flexibility than customized solutions.
  • Data Control Concerns: You entrust your data to the provider, raising potential compliance and control issues.
  • Hidden Costs: Watch out for additional fees for users, storage, or other aspects.
  • Vendor Lock-in: Switching providers can be difficult due to data migration challenges.

Additional Recommendations

  • Regularly review your agreement as your needs evolve.
  • Conduct due diligence on the provider’s reputation and security practices.
  • Clearly communicate your expectations and requirements during negotiations.

By understanding the key aspects of SaaS agreements and seeking professional guidance, you can be sure you obtain the benefits while mitigating potential risks.

Lawyers for SAAS Agreements

Our IP and commercial lawyers offer all the experience of big City law firms with a more affordable, practical and personal advantage for clients. Our lawyers are comfortable advising and negotiating with lawyers from the largest firms who may be advising the other party.