What is Software Subscription Agreement Drafting?
A software subscription agreement is a legal contract between a software provider and a customer or client. It explains how the software provider will grant the client access to use their software or a cloud-based platform in exchange for recurring payments.
If you need to draft a software subscription agreement, you should read the rest of this article. We’ll explore key terms to include in it, how to draft it, and how a lawyer can help you with the process.
What are Core Components in a Software Subscription Agreement?
A software subscription agreement usually contains the following key terms to include:
- Grant of license. Outline the non-exclusive, non-transferable right for the client to use the platform during the subscription duration.
- Payment terms. Mention recurring payments, such as subscription pricing and charges.
- Service level agreements (SLAs). Your agreement must include this to ensure system uptime and explain how maintenance or support will be handled.
- Data ownership. Specify what the parties own. For example, state that the client maintains ownership of input data and the software provider owns the platform.
- Restrictions. Make it clear what activities aren’t allowed, such as reverse engineering.
- Term and termination. Explain how long the agreement lasts and notice periods for early cancellation.
What are Tips for Drafting a Software Subscription Agreement?
When drafting a software subscription agreement, make sure you follow some important guidelines. Here are things to consider during the process to have a professional final agreement that’s aligned with your interests.
Define Subscription Services
Clearly explain what software is being provided, such as by including its features, purpose, and functionality. You want to mention if the software subscription is cloud-based or involves desktop/mobile applications.
Verify the Type of License
Explain what rights are being granted to the customer to use the software, such as if it’s transferable or not, and exclusive or not. You want to be as comprehensive as possible to prevent ambiguity that can result in parties getting the wrong impression.
Describe Subscription Fees
Clearly state the subscription price the client will have to pay, as well as payment schedules and methods to follow. Make sure you clarify if the fees will be charged on a monthly/yearly basis, or if they’re usage based. If there are price changes, include advance notice for when they will occur.
Explain User Access
Verify how authorized users can make use of the software and if customers can add or remove users. Here, you should include information such as access permissions, account registration, and responsibility for using customer accounts.
Be Clear About Maintenance
What happens when the software has to be fixed or serviced should be clearly described to leave nothing uncertain. Describe what technical support services are provided and explain if the provider will handle bug fixes and upgrades. If these are tied to payment changes, you must include the information.
Explain Acceptable Use and Restrictions
Your agreement should explain how clients are allowed to use the software. Include prohibited uses, such as copying, reverse engineering, reselling, and more.
Fairly Allocate Liability
Establish clear responsibility for losses that can arise from things that go wrong, such as software failures or intellectual property infringement. Include liability limits and exclusions.
Should You Hire a Lawyer for Software Subscription Agreement Drafting?
It’s advisable to hire a lawyer to help you draft your software subscription agreement. It will give you peace of mind that you’re not risking any legal or financial consequences.
Here’s how a lawyer can help you during the drafting of your software subscription agreement:
- Defining all subscription terms. A lawyer will define all payment terms, such as subscription fees, billing cycles, payment methods, and future price increases.
- Clarifying software usage rights. They’ll explain how customers can access and use the software provided, such as by specifying licensing restrictions.
- Addressing data protection. They’ll include provisions to protect how your sensitive information is collected, used, and stored.
- Establishing clear service levels. They’ll define service standards, such as regarding uptime commitments, tech support, and response times.
- Verifying liability limitations. They’ll draft provisions to address damages and other potential liabilities, protecting you against costly legal disputes.
- Ensuring legal compliance. They’ll align the agreement terms with all relevant laws and requirements to prevent non-compliance.
- Reviewing your software subscription agreement. They’ll review a software subscription agreement that you’ve already drafted, making sure that everything is legally valid and clear to prevent disputes and strengthen your working relationship.
Find a Lawyer for Software Subscription Agreement Drafting on ContractsCounsel
If you’d like to hire a lawyer to draft a professional software subscription agreement, you don’t have to struggle to find one. By using an online legal platform, you’ll gain access to a range of experienced and skilled lawyers who can help you with your contract-drafting requirements.
ContractsCounsel is one of the largest online legal marketplaces that connects clients with a curated network of lawyers who have been vetted on the platform.
Here are the easy steps to follow when asking a lawyer on ContractsCounsel to draft your software subscription agreement:
- Visit the ContractsCounsel marketplace.
- Select ‘One-time project’ and ‘Create or update contract.’ Alternatively, select ‘Review contract’ to have your agreement reviewed.
- Post your project, which is free. Include some details of what you need so you can connect with the most suitable lawyers.
- Wait for bids. You’ll receive multiple bids from lawyers on the platform who are available to work with you.
- Review the platform’s lawyer data. This information includes the lawyers’ location, credentials, years of experience, field of expertise, and client ratings for previous projects completed on the platform.
- Choose a lawyer. Hire them to draft or review your software subscription agreement for a flat fee.
