How To Write A SaaS Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 4,036 reviews

Jump to Section

Need help with an SaaS Agreement?

CREATE A FREE PROJECT POSTING
Post Project Now

Every Software-As-A-Service (SaaS) company must let its users know how to interact with their service using a SaaS agreement. However, many SaaS companies often don’t know how to write a SaaS agreement.

This article comprehensively explores everything you need to know about writing a SaaS agreement, including what exactly the SaaS contract is, what the agreement should include, its types, and examples.

Let’s explore SaaS agreements and how to write them.

What Is a Written SaaS Agreement?

A SaaS Agreement, or Software-As-A-Service agreement, is a legal contract that outlines how consumers can access and use a software product.

Prepared by a SaaS company, the SaaS contract serves as a license granted to a customer to use their product. However, this contract includes specific prohibitions and restrictions, which may vary from person to person.

As a legal contract defining the relationship between a customer and a SaaS company or user and software product, a SaaS agreement may cover a pilot, an auto-renewing subscription plan, a trial, and others.

Learn more about SaaS agreements by reviewing ContractsCounsel’s overview.

How To Write a SaaS Agreement – Step by Step

Below is a step-by-step guide on how to write a SaaS agreement:

Step 1: Determine Your Agreement Terms

The first step to writing a SaaS agreement is determining the terms, whether fixed or monthly. While a fixed term is secured by an upfront payment or direct debit agreement, the latter is month to month, with the service restricted whenever a consumer fails to pay for the next month’s bidding.

Your underlying business model is a significant factor to consider when determining the suitable terms for your SaaS contract.

Step 2: Describe Your Services Effectively

Your customers deserve to know the SaaS services they’ll enjoy. One way to do this is by directing your customers to the services as described on your website. You may also choose to include a detailed description in the agreement itself.

Regardless, you must ensure your customers understand the services you will provide and agree to such by subscribing to your services. To confirm their understanding, consider your target audience and the level of details they need.

Step 3: Specify Your Provisions for Support and Maintenance

Undoubtedly, there would be periods you would need to fix errors or bugs or carry out general maintenance. While these must be done timely, your customers deserve to know how you plan to do this.

When expressively letting your customers know the fixed period for maintenance, ensure you consider time zones, especially if you and your customers are in different countries.

Step 4: Specify How You’ll Use Consumer Data

When writing a SaaS agreement, you must include how your company plans to use your customers’ data. And this may include information about customer data ownership, data security, data backups, the service’s host, data retrieval, and others.

Consulting with data privacy lawyers will help you understand what you can and cannot collect or store, and what your obligations are to the users of your product.

Learn more about California’s Consumer Privacy Act ( CCPA ).

Step 5: Retain Your Proprietary and Intellectual Property Rights

Ensure you retain the proprietary and Intellectual Property rights of the software service you’re providing with your SaaS agreement.

When writing a SaaS agreement, ensure you carefully describe any modifications or improvements made to your software resulting in a new intellectual property. Apart from describing, ensure the rights are vested in you.

Step 6: Limit Your Liability

Ensure your SaaS agreement includes a clause that limits your liability to customers. This clause should cover issues, such as the amount of liability, types of loss your company covers, consumer protection laws, liability with third-party websites, and others.

Explore ContractsCounsel’s contract clauses guide.

Step 7: Choose a Governing Law

Finally, choose the law that governs your SaaS Agreement and include it in a governing law clause . As a legal contract binding consumer usage of your SaaS product, the SaaS agreement also applies to all your customers worldwide. Therefore, to avoid fighting lawsuits in countries where your consumers are located, ensure your SaaS Agreement is governed by the country’s laws in which you reside.

Meet some lawyers on our platform

Daniel R.

10 projects on CC
View Profile

Michael K.

70 projects on CC
View Profile

Zachary J.

53 projects on CC
View Profile

Kristen R.

40 projects on CC
View Profile

What Should Be in A SaaS Agreement?

Having understood the steps to take when writing a SaaS agreement, you must also know what you must include in your SaaS Agreement.

However, what should be in a SaaS Agreements varies based on your business and SaaS product. Nonetheless, below are elements that must be included in any SaaS contract:

  • Start date and end date : The start date is when your SaaS agreement takes effect, and product subscription becomes available for use. The end date is the direct opposite.
  • Licensing terms : These terms are the basis upon which your customers will use your SaaS product. Software license protects you from customers who might want to profit off your hard work.
  • Billings and payments : The billing and payment terms lets your users know the fees they must pay, when to pay, and how it is to be paid.
  • Warranties : You must specify included warranties and other disclaimers. This shows you agree your SaaS product can’t always be error-free, and at the same time, refuse to take responsibility for any inappropriate use of your service.
  • Privacy terms and conditions : Let your customers know where and how their data would be used and to what extent the information they provide to use your SaaS product is protected
  • SaaS Service-Level Agreement (SLA) : SLA explicitly outlines the services you offer and how your customers should use them. This also includes the software license, terms, and conditions for hosting the SaaS software, software support and maintenance services, etc.

Here is an article about SaaS Agreement key clauses.

Types of SaaS Agreements

Below is a list of different types of SaaS Agreements.

  • Public Domain License : When you adopt the public domain license for your software, it means you are unrestrictedly allowing to use and modify the software. Anyone else can adopt and reuse your software as desired.
  • Proprietary License : This agreement prevents anyone from modifying, copying, or distributing your SaaS product or software. It’s a very restrictive SaaS agreement.
  • Permissive Agreement : This SaaS agreement features a few software modifications and distribution restrictions. Otherwise called the Apache Software License.
  • Copyleft : This is also a restrictive agreement, less stringent than proprietary license but more restrictive than permissive agreement. Also called a reciprocal license, the Copyleft agreement allows the distribution or modification of a software product only if the new product being distributed will also have the same restriction or agreement.
  • Lesser General Public License : This agreement allows you to link open-source libraries within your software.

Other types of technology agreements:

Here is a list of different types of online contracts .

Examples of When to Use a SaaS Agreement

A SaaS agreement is used for different situations. Given the investment, often companies will wait to invest in an ironclad SaaS agreement once they start achieving customer traction. Some examples of when you may use a SaaS Agreement include:

  • When you prove your minimum viable product has demand.
  • When you need to prevent SaaS product abuse.
  • When you want to license your product and not sell it.
  • When you need to disclaim warranties and limit your liability.
  • When you plan to terminate the use of your software anytime without issues.

Who Writes SaaS Agreements?

SaaS Agreements are typically unique and require analysis of your technology, customer base, data you’re collecting, and business model. For these reasons, it is advisable to work with technology lawyers to help you write your SaaS contract.

Otherwise, ensure you seek specialist legal advice to know the exact content to include in the agreement. This way, you can confirm the adequate protection of your rights.

You might also choose to use a SaaS Agreement template. However, only consider this option if it makes commercial sense. Nonetheless, when your SaaS product starts making a considerable amount of money, let a technology lawyer review and update your SaaS Agreement.

Get Help Writing Your SaaS Agreement

Do you need help writing a custom SaaS Agreement for your business? Post a project in ContractsCounsel’s marketplace to get free bids from technology lawyers that work with SaaS companies. All lawyers have been vetted and also have peer reviews for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Elizabeth W. on ContractsCounsel
View Elizabeth
5.0 (2)
Member Since:
December 11, 2021

Elizabeth W.

Legal Counsel
Free Consultation
Get Free Proposal
Minneapolis, MN
6 Yrs Experience
Licensed in MA, RI
Suffolk University Law School

Liz is an experienced insurance professional, having worked with carriers and brokers for over 10 years. She can review or draft a variety of commercial agreements and is here to help your business. Specialties include: Master Service Agreements, business process outsourcing, marketing and partnership agreements, broker agreements, business associate agreements, and NDAs.

Kristen R. on ContractsCounsel
View Kristen
4.9 (24)
Member Since:
January 10, 2022

Kristen R.

Freelance Attorney
Free Consultation
Get Free Proposal
Wyoming
15 Yrs Experience
Licensed in WY
University of Wyoming

Transactional and Employment Attorney and Small Business Owner. I do inside counsel work from the outside. I demystify the law for my clients.

Brittany B. on ContractsCounsel
View Brittany
Member Since:
December 4, 2021

Brittany B.

Attorney
Free Consultation
Get Free Proposal
Ann Arbor, MI
9 Yrs Experience
Licensed in MI
Wayne State University Law School

Brittany advises startups and emerging and public companies at all stages of growth, with focuses on formation and corporate governance matters, securities, venture capital financings, M&A and other strategic transactions, commercial contracts and general corporate counseling. Brittany represents clients across a broad spectrum of industries, including technology, automotive, mobility, digital health, consumer products and manufacturing.

James A. on ContractsCounsel
View James
Member Since:
December 5, 2021

James A.

Attorney
Free Consultation
Get Free Proposal
Birmingham, AL
6 Yrs Experience
Licensed in AL
Birmingham School of Law

James Allen is a native of Birmingham, Alabama. Mr. Allen has a considerable amount of experience in the areas of domestic relations, criminal law, family law, and general civil litigation.

Emily Y. on ContractsCounsel
View Emily
Member Since:
December 6, 2021

Emily Y.

Partner
Free Consultation
Get Free Proposal
Colorado Springs, Colorado
7 Yrs Experience
Licensed in CO
University of Colorado

I am available to advise on entity formation, contracts, and employment policies. I am also comfortable litigating business disputes including partnership disputes and employment cases. Prior to opening my current practice, I worked for several years in a small civil litigation practice focused on employment matters and civil litigation. I attended law school at the University of Colorado, and I went to the University of British Columbia for my undergraduate education.

Philip M. on ContractsCounsel
View Philip
Member Since:
December 13, 2021

Philip M.

Attorney
Free Consultation
Get Free Proposal
San Diego
5 Yrs Experience
Licensed in CA
Thomas Jefferson School of Law

I have been a freelance attorney for several years and have many of my clients returning to me for continued work because of the quality I produce.

Amy Sue L. on ContractsCounsel
View Amy Sue
Member Since:
January 4, 2022

Amy Sue L.

President, Concierge Legal
Free Consultation
Get Free Proposal
Washington, DC Metropolitan Area
26 Yrs Experience
Licensed in CA, PA, VA
Pepperdine University School of Law

Ms. Leavens is a corporate attorney with 10 years of experience as the General Counsel, Chief Compliance Officer and Corporate Secretary of a Congressionally chartered, non-profit corporation, and more than 20 years of experience as an advisor to executive officers and boards of directors in for-profit and non-profit organizations. She has substantial experience within in-house legal departments managing cross-functional teams comprised of multiple business units and attorneys on large-scale mission critical projects, and within a global law firm as a manager of public and private, domestic and international, multi-party business transactions. She has unique experience implementing government-sponsored business initiatives. Ms. Leavens was honored in 2015 as one of Washington, D.C.’s Top Corporate Counsel by Bisnow and the Association of Corporate Counsel; nominated in 2014 for the Association of Corporate Counsel (WMACCA) Outstanding Chief Legal Officer Award; and the recipient in 2014 of WMACCA’s Community Service Award.

Elizabeth V. on ContractsCounsel
View Elizabeth
Member Since:
January 5, 2022

Elizabeth V.

Corporate Counsel
Free Consultation
Get Free Proposal
Indianapolis, IN
9 Yrs Experience
Licensed in IN
IU McKinney School of Law

Most of my career has been as in-house counsel for technology companies. My responsibilities included managing all vendor/procurement contracts and compliance, customer/partner/reseller contracts and compliance, data security/privacy compliance and incident responses, HR/employment issues, and legal operations. I am very comfortable negotiating Commercial Contracts, Vendor Agreements, and Procurement Contracts for goods, services, and licensing, as well as addressing Employment & Labor, Intellectual Property, and Data Privacy issues and compliance. I specialized and have a certificate in IP in law school and continued to develop in that area as in-house counsel for Interactive Intelligence, Genesys, which are unified communication companies, and KAR Global in the automobile digital services lines of business.

Amos M. on ContractsCounsel
View Amos
Member Since:
January 13, 2022

Amos M.

Principal
Free Consultation
Get Free Proposal
Nashville, TN
15 Yrs Experience
Licensed in GA, TN
Mississippi College School of Law

Since 2008, I have worked to assist clients in solving problems and addressing challenges that inevitably arise as a business grows - both anticipated and unexpected. My experience in Georgia and Tennessee in both drafting contracts and enforcing them via litigation and/or arbitration has provided clients with unique insights that help them anticipate problems and inform their decisions from start to finish.

Leah C. on ContractsCounsel
View Leah
Member Since:
January 18, 2022

Leah C.

Attorney
Free Consultation
Get Free Proposal
Alabama
8 Yrs Experience
Licensed in AL
Birmingham School of Law

I am an attorney licensed in Alabama and have been in solo practice for 7 years. I have experience in Contracts drafting and review, Litigation and Immigration practice areas. I am available for new projects.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call