What is SaaS Agreement Drafting?
A SaaS (Software as a Service) agreement is a legal contract signed by a software vendor or provider and customer. It includes all the important terms for how the customer can access the cloud-based software, usually via a subscription.
This contract should be drafted professionally and not miss any important information that could put both parties at risk.
Read the rest of this article to learn more about what’s typically included in a SaaS agreement and how to draft it, as well as what a lawyer will do to make the drafting process easier.
What’s Included in a SaaS Agreement?
A SaaS agreement must be comprehensive to ensure that it’s clear and prevents the possibility of disputes between parties. Here are key terms included in the contract.
- Scope. This section includes details about who can use the software and what uses aren’t allowed.
- Subscription and payment. These terms include pricing structures and billing cycles.
- Data ownership. The SaaS agreement explains who owns the data and how it can be protected.
- Service Level Agreements (SLAs). This is when the software provider includes guarantees, such as a specific percentage of system uptime and other performance guarantees.
- Termination. Both parties will want clarity about how long the agreement will last and how they can end it should this be required. There should also be post-termination duties explained, such as what should be done with the data.
- Add-ons. The agreement should include features that are included in the subscription as well as any add-ons that will be paid for or included in an upgrade.
What are Tips for SaaS Agreement Drafting?
Besides key terms that are typically included in a SaaS agreement, there are important tips to consider when drafting it.
Consider Support and Maintenance
The SaaS agreement should explain what happens when there are issues faced by the customer and list the channels they can use to resolve the problem.
There should also be clarity for how the software provider will deal with maintenance, such as notification periods provided to prevent work disruptions.
Be Wary of Auto-Renewals
Some SaaS agreements will automatically renew your subscription unless you remember to cancel it within a specific timeframe. This is usually 60-90 days prior to the renewal. It’s important to include in the contract to avoid getting stuck in a long-term agreement.
Provide In-Depth SLAs
SLAs should provide information about what guarantees the vendor gives to the customer, but they should include transparency about how they will measure uptime and compensate customers if they don’t fulfill their obligations.
Get Payment Clarity
Include clear, specific payment terms. These include the following:
- Due dates. When the payments need to be made must be clear to prevent uninterrupted usage.
- Acceptable methods. The provider should specify what payment methods are accepted to prevent confusion or delays.
- Penalties. If payments aren’t made on time, there should be consequences included, such as penalties.
Ensure Adequate Privacy and Data Protection
Software providers must clarify all the measures they’ll use to protect customer information and data, such as via encryption.
If the contract is terminated early, the agreement must explain what happens to customer data afterward, such as if it’s the customer’s duty to delete it to prevent exposing sensitive information.
How Can a Lawyer Help with SaaS Agreement Drafting?
DIY contract drafting can cause you to overlook important clauses such as indemnities which can put you at risk. Hiring a lawyer to draft your SaaS agreement is worth it because they have the expertise and experience to provide a tailored, balanced contract.
Here are some ways in which they will assist you with the drafting process:
- They’ll customize the agreement according to your working relationship, situation, and requirements so that it prioritizes your interests.
- They’ll write all terms and clauses so that they’re simple and specific to avoid misinterpretations.
- They’ll reduce your legal risks, such as by establishing clear data protection duties.
- They’ll identify any issues that can result in disputes, such as one-sided protections and intellectual property (IP) ownership.
- They’ll ensure that the agreement is compliant with all laws and industry regulations.
- They’ll prevent generic templates that can fail to address your specific rights and risks.
- They’ll assess the future of your working relationship and agreement, such as if you might wish to upgrade the services and how this can occur.
Where to Find a Lawyer to Draft a SaaS Agreement
If you need to hire a lawyer to draft your SaaS agreement, you don’t have to cold-call traditional law firms or ask around for someone reputable. Using online legal platforms can make the process much easier.
On ContractsCounsel, one of the largest online legal marketplaces, you’ll have access to a curated network of vetted lawyers who can help you draft your SaaS agreement so that it’s clear, balanced, and legally protects you.
To request that a vetted lawyer on ContractsCounsel writes your SaaS agreement, follow these simple steps.
1. Visit the ContractsCounsel marketplace, where you can post your project for free.
2. Include a few details of what you require so you’ll be directed to the most suitable lawyer.
3. You’ll receive multiple bids from lawyers directly on the platform.
4. Review the lawyers' profiles based on data provided by the platform, such as their location, client ratings, years of experience, and field of expertise.
5. Hire a lawyer you think is best suited to your requirements to draft your SaaS agreement so it’s clear and legal. They can also review your contract to keep it updated and valid.
