How To Write A SaaS Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,221 reviews

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

Richard G.

1 project on CC
View Profile

Ramanathan C.

24 projects on CC
View Profile

Max M.

87 projects on CC
View Profile

Samuel R.

22 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

View Jonathan
Member Since:
February 8, 2021

Jonathan D.

Principal
Free Consultation
Get Free Proposal
Miami
4 Yrs Experience
Licensed in FL
Florida International University School of Law

Miami-based duly licensed attorney and customs broker with significant experience in various types of supply chain business agreements, as well as experience in entertainment law.

View Albert
Member Since:
February 8, 2021

Albert M.

Attorney
Free Consultation
Get Free Proposal
Woodbury, NJ
19 Yrs Experience
Licensed in NJ
Rutgers School of Law - Camden

I am a New Jersey licensed attorney and I have been in practice for over seventeen years. My practice mainly consists of representing public entities (municipalities, school boards, etc) and businesses, both small and large. In that capacity, much of work consists of drafting, reviewing and revising contracts.

View Jose
Member Since:
February 13, 2021

Jose P.

Partner
Free Consultation
Get Free Proposal
San Antonio, Dallas
22 Yrs Experience
Licensed in TX
University of Pennsylvania

I am a corporate lawyer with expertise working with small businesses, venture capital and healthcare. Previously, I worked at large law firms, as well as head attorney for companies. I graduated from Harvard College and University of Pennsylvania Law School. I speak 5 languages (Spanish, French, Italian and Russian, plus English), visited over 60 countries, and used to compete in salsa dancing!

View Briana
Member Since:
February 15, 2021

Briana C.

Founder, Branch Legal LLC
Free Consultation
Get Free Proposal
Boston
10 Yrs Experience
Licensed in CA, MA, NY
Columbia University School of Law

Legal services cost too much, and are often of low quality. I have devoted my law practice to providing the best work at the most affordable price—in everything from defending small businesses against patent trolls to advising multinational corporations on regulatory compliance to steering couples through a divorce.

View Meghan
Member Since:
February 15, 2021

Meghan P.

Attorney
Free Consultation
Get Free Proposal
Denver
4 Yrs Experience
Licensed in CA
University of Dayton

I am a licensed attorney and a member of the California Bar. I graduated from the University of Dayton School of Law's Program in Law and Technology. I love IP, tech transfers, licensing, and how the internet and developing technology is changing the legal landscape. I've interned at both corporations and boutique firms, and I've taken extensive specialized classes in intellectual property and technology law.

View Jo Ann
Member Since:
February 22, 2021

Jo Ann J.

Partner
Free Consultation
Get Free Proposal
Boston, MA
26 Yrs Experience
Licensed in MA
Suffolk Universtiy Law School

Jo Ann has been practicing for over 20 years, working primarily with high growth companies from inception through exit and all points in between. She is skilled in Mergers & Acquisitions, Contractual Agreements (including founders agreements, voting agreements, licensing agreements, terms of service, privacy policies, stockholder agreements, operating agreements, equity incentive plans, employment agreements, vendor agreements and other commercial agreements), Corporate Governance and Due Diligence.

View Charlotte
Member Since:
February 25, 2021

Charlotte L.

Self-Employed Legal Consultant
Free Consultation
Get Free Proposal
Arlington, VA
8 Yrs Experience
Licensed in DC, VA
University of Virginia School of Law

I hold a B.S. in Accounting and a B.A. in Philosophy from Virginia Tech (2009). I received my J.D. from the University of Virginia School of Law in 2012. I am an associate member of the Virginia Bar and an active member of the DC bar. Currently, I am working as a self-employed legal consultant and attorney. Primarily my clients are start-up companies for which I perform various types of legal work, including negotiating and drafting settlement, preparing operating agreements and partnership agreements, assisting in moving companies to incorporate in new states and setting up companies to become registered in a state, assisting with employment matters, drafting non-disclosure agreements, assisting with private placement offerings, and researching issues on intellectual property, local regulations, privacy laws, corporate governance, and many other facets of the law, as the need arises. I have previously practiced as an attorney at a small DC securities law firm and worked at Deloitte Financial Advisory Services LLC. My work experience is dynamic and includes many short-term and long term experience that span across areas such as maintaining my own blog, freelance writing, and dog walking. My diverse background has provided me with a stong skill set that can be easily adapted for new areas of work and indicates my ability to quickly learn for a wide array of clients.

View Don
Member Since:
March 1, 2021

Don G.

Attorney at law
Free Consultation
Get Free Proposal
Lafayette, LA
21 Yrs Experience
Licensed in TX
Texas Tech School of Law

Texas licensed attorney specializing for 20 years in Business and Contract law. My services include General Business Law Advisement; Contract Review and Drafting; Legal Research and Writing, including Motion Practice; Business Formation; Article or Instructive Writing; and more. For more insight into my skills and experience, please feel free to visit my LinkedIn profile or contact me with any questions.

View Jeremiah
Member Since:
March 5, 2021

Jeremiah C.

Partner/Attorney at Law
Free Consultation
Get Free Proposal
Houston, TX
14 Yrs Experience
Licensed in NV, TX
Thomas Jefferson

Creative, results driven business & technology executive with 24 years of experience (13+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. My engagements often include legal consultation & advisory roles, drafting of NDAs, TOS & Privacy Policies, contracts and corporate law, business strategy advice & consulting, in-house counsel, Founder & entrepreneur guidance and other roles as needed by my clients. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.

View Adam
Member Since:
March 5, 2021

Adam B.

Managing Partner
Free Consultation
Get Free Proposal
San Mateo, California
24 Yrs Experience
Licensed in CA
McGeorge School of Law

Seasoned technology lawyer with 22+ years of experience working with the hottest start-ups through IPO and Fortune 50. My focus is primarily technology transactions with an emphasis on SaaS and Privacy, but I also provide GC services for more active clients.

View Benjamin
Member Since:
March 11, 2021

Benjamin W.

Founder
Free Consultation
Get Free Proposal
Los Angeles, CA
7 Yrs Experience
Licensed in CA
UCLA School of Law

I am a California-barred attorney specializing in business contracting needs. My areas of expertise include contract law, corporate formation, employment law, including independent contractor compliance, regulatory compliance and licensing, and general corporate law. I truly enjoy getting to know my clients, whether they are big businesses, small start-ups looking to launch, or individuals needing legal guidance. Some of my recent projects include: -drafting business purchase and sale agreements -drafting independent contractor agreements -creating influencer agreements -creating compliance policies and procedures for businesses in highly regulated industries -drafting service contracts -advising on CA legality of hiring gig workers including effects of Prop 22 and AB5 -forming LLCs -drafting terms of service and privacy policies -reviewing employment contracts I received my JD from UCLA School of Law and have been practicing for over five years in this area. I’m an avid reader and writer and believe those skills have served me well in my practice. I also complete continuing education courses regularly to ensure I am up-to-date on best practices for my clients. I pride myself on providing useful and accurate legal advice without complex and confusing jargon. I look forward to learning about your specific needs and helping you to accomplish your goals. Please reach out to learn more about my process and see if we are a good fit!

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