How To Write A SaaS Agreement

Jump to Section

Need help with an SaaS Agreement?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

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

Michael B.

2 projects on CC
View Profile

Melissa G.

1 project on CC
View Profile

Namrita N.

3 projects on CC
View Profile

Briana C.

5 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

ContractsCounsel verified
Attorney
7 years practicing
Free Consultation

Corporate and transactional attorney in sixth year of practice. Focus areas include general corporate counsel, labor and employment law, business partnership matters, securities matters related to privately-held companies, and regulatory compliance in securities and finance matters.

ContractsCounsel verified
Attorney
23 years practicing
Free Consultation

Forest is a general practice lawyer. He provides legal advice regarding small business law, contracts, estates and trusts, administrative law, corporate governance and compliance. Forest practiced complex commercial litigation in Florida for eight years, representing clients such as Host Marriott, Kellogg School of Business, and Toyota. Since moving to Nashville in 2005, he has provided legal advice to clients forming new businesses, planning for the future, and seeking funding through the use of equity and/or debt in their businesses. This advice has included the selection of business type, assistance in drafting and editing their business plans and offering material, reviewing proposed term sheets, and conducting due diligence. Forest is a member of the Florida, Tennessee, and Texas Bars; in addition. Forest has held a Series 7, General Securities Representative Exam, Series 24, General Securities Principal, and Series 63, Uniform Securities Agent State Law.

ContractsCounsel verified
Counsel
10 years practicing
Free Consultation

CA, NY, and FL licensed attorney with nearly a decade of experience in intellectual property, data privacy, commercial contracts, and employment. I also have both the CIPP/US and CIPP/E privacy credentials. Basically, everything your business needs!

ContractsCounsel verified
Law Firm Principal
40 years practicing
Free Consultation

David H. Charlip, the principal of Charlip Law Group, LC, is one of only 101 Board Certified Civil Trial Lawyers in Miami-Dade, with over 38 years of litigation experience. Mr. Charlip is also one of only 136 Florida Civil Law Notaries. He has managed and litigated cases across the country. Mr. Charlip has advised businesses, drafted business formation and purchase and sale documents and litigated business disputes for over 30 years and is very familiar with all aspects of contractual relations.

ContractsCounsel verified
Attorney
17 years practicing
Free Consultation

With over 16 years of experience in the area of estate planning, trademarks, copyrights and contracts, I am currently licensed in Florida and NJ. My expertise includes: counseling clients on intellectual property availability, use and registration; oversee all procedural details of registration and responses with the USPTO/US Copyright Office; negotiate, draft and review corporate contracts and licensing; counsel clients on personal protection, planning and drafting comprehensive estate plans.

ContractsCounsel verified
Attorney and Law Firm Owner/President
19 years practicing
Free Consultation

Melissa Taylor, the President and founding partner of Maurer Taylor Law, specializes in business contract review and drafting and is a second-generation attorney with private firm, in-house counsel, governmental, entrepreneurial, and solo practitioner experience. Melissa has a strong legal background, a dedication to customer service, is friendly, warm and communicative, and is particularly skilled at explaining complex legal matters in a way that's easy to understand. Melissa personally handles all client matters from start to finish to ensure client satisfaction.

ContractsCounsel verified
Attorney/Mediator/Arbitrator
40 years practicing
Free Consultation

Lawrence A. “Larry” Saichek is an AV rated attorney and a CPA focusing on business and real estate transactions, corporate law and alternative dispute resolution. With a background including five years of public accounting and six years as “in house” counsel to a national real estate investment company, Larry brings a unique perspective to his clients – as attorney, accountant and businessman. Many clients think of Larry as their outside “in house” counsel and a valued member of their team. Larry is also a Florida Supreme Court Certified Mediator and a qualified arbitrator with over 25 years of ADR experience.

ContractsCounsel verified
Attorney
32 years practicing
Free Consultation

Entertainment Attorney with 30+ years of experience, representing all aspects of the TV, Film, Music and Publishing Industries

ContractsCounsel verified
Shareholder
11 years practicing
Free Consultation

Aaron focuses his practice on startups and emerging growth companies, providing general counsel services for companies from formation through exit. Aaron frequently advises clients in connection with routine and unique legal, business, and strategic decisions, including corporate, business and technology transactions, angel and venture financings, mergers and acquisitions, protection of intellectual property, and information privacy and data security.

ContractsCounsel verified
Attorney
11 years practicing
Free Consultation

I enjoy helping businesses of all sizes succeed, from start-ups to existing small and medium sized businesses. I regularly advise corporate clients on a variety of legal issues including formation, day to day governance, reviewing and drafting business contracts and other agreements, business acquisitions and sales, as well as commercial and residential real estate issues, including sales, purchases and leases. As an attorney licensed in both Michigan and Florida, I also advise clients on real estate issues affecting businesses and individuals owning real property in either state, whether commercial, residential or vacation/investment property. I also regularly assist nonprofit organizations in obtaining and maintaining tax exempt status, and provide general legal counsel on all matters affecting public charities, private foundations and other nonprofit organizations.

ContractsCounsel verified
Healthcare Law and Employment Expert
11 years practicing
Free Consultation

Pura Rodriguez, JD, MBA is the President and Managing Partner of A Physician’s Firm, based in Miami. She represents healthcare providers from different specialties in a broad range of issues, including contract review, business planning and transactions, mergers and acquisitions, vendor and contract disputes, risk management, fraud and abuse compliance (Anti-Kickback Statute and Stark), HIPAA compliance, medical staff credentialing, employment law, and federal and state regulations. She also assists providers in planning their estates, protecting their assets, and work visa requirements.

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