SaaS Contracts Lawyers: What Are They?
Software as a Service, more commonly known as SaaS, that replaces downloading software to run and update with accessing applications through your browser. SaaS agreements apply to a wide variety of contracts related to the SaaS product. Due to the unique terms and legal issues of these agreements and the fact that the industry itself is relatively new, SaaS specialty contract attorneys are in high demand from both suppliers and consumers.
SaaS Agreements: The Basics
SaaS agreements are contracts between the supplier and the consumer (including organizations), generally outlining the terms under which SaaS products can be accessed. This differs from a standard software license in a few ways:
- There is not physical copy of the software
- Ownership does not transfer from the supplier to the consumer
- The consumer’s rights to use the product can be terminated
- The hosting of the product must be clarified
- The maintenance of the product must be clarified
However, this is not the totality of legal issues that must be covered, and this is where drafting a SaaS agreement gets tricky. Working with a SaaS contract lawyer may be critical to protecting all parties involved, driving their high demand.
The High Risks of Not Working With a SaaS Contract Attorney
Without the right legal protections, you open yourself up to significant legal issues that can devastate your company. In fact, these cases are becoming increasingly common, among small-level start-ups and major providers alike. McAfee, one of the biggest names in antivirus protection and a major SaaS provider, has been hit with at least two class-action lawsuits in recent years based on its automatic renewal clauses. Even though renewals are typical contract terms, this is still a risk. Oracle, another big name in the SaaS world, is facing a class-action lawsuit of its own. This one alleges that the company has been extorting and bribing current customers to purchase additional products. Both of which don’t seem to be customer friendly.
Other issues that have arisen for various SaaS companies include:
- Financial Liability From Data Breaches : It seems like every day brings a new story about a massive data breach. In many cases, these are the result of mistakes and oversight on the part of the SaaS provider or a secondary company they work with. Contracts need to protect your company should the error be on the part of another company or the customer.
- Consequential Damage Liability : Some SaaS companies have failed to stipulate in their contracts that they do not take on consequential damage liability. As a result, some have been held responsible for all damages related to data breaches, resulting in the companies quickly folding.
- Application Availability : Customers who purchase SaaS products do so because they require them to run their business, complete their work, or use their home computer. When the availability goes down, it can have devastating consequences. Yet some downtime must be anticipated. Without clarifying this in the agreement, it is possible that the SaaS company will be held responsible for any losses a customer experiences related to downtime.
While some of this is related to poor business practices (like downloading free agreement templates online) as much as it is poorly drafted contracts, the fact is that having an attorney draft and review your agreements makes it much less likely that a lawsuit will be filled and also reduces the chances of those that do get filed being successful. Seeing industry giants being hit with legal consequences has even small business owners seeking SaaS contract attorney assistance.
Connect With a Vetted SaaS Contract Lawyer Near You
Not every contract lawyer will understand the unique needs of a SaaS agreement. Through Contracts Counsel, a boutique marketplace, you can speak with lawyers who understand the quirks of SaaS and keep up with the changes in federal, state, and case law. Protect your SaaS venture with ContractsCounsel.
