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Are You Planning On Becoming A SaaS Reseller? Sign Your Contract First
A Saas reseller is the middleman between the owner and the user of any software. This person takes care of the marketing and sales of the product. The exchange of services and goods between third parties is quite normal in today's world. One such exchange commonly seen is in the field of SaaS, which is Software as a Service.
What is a SaaS Reseller Agreement?
A SaaS reseller has the right to sell the services of the owner or the publisher. In addition, they can sell these services to others, that is, a third party. The partnership or the association between the software owner and the middle party or the reseller can also be channeling. Before agreeing, there are several things that both the parties, the owner and the SaaS reseller, must keep in mind.
A Saas agreement mentions all the details discussed between the software owner and the reseller. It is important to sign an agreement before the reseller is permitted to sell any of the services to a third party. This agreement legally states that the reseller can market and sell the software with the owner's permission. It rules out any legal troubles for the reseller and saves them for copyright cases. Further, it helps to protect the ownership of the software and defines the trademark policies.
Things to Consider before the Agreement
Here are some parameters that a SaaS reseller must be aware of.
- Recent Laws
- Ownership Clause
- Intellectual Property Rights
- Payment Terms
- Additional Services
Government laws can often be confusing, especially when it comes to reselling. It is important to keep in mind the recent and old norms set up by the government. However, following the rules and regulations can be tricky, especially if the owner of the SaaS and the reseller are from different nations.
This is an important term that every software reseller agreement must have. It clearly states who the owner of the software is. In most cases, the publisher has complete control and holds complete rights to the software. However, some SaaS owners also distribute their rights to investors and other parties, which must be clearly stated in the agreement. Moreover, if there is any percentage sharing between the owner and the reseller, it, too, must be mentioned.
Intellectual property rights refer to the knowledge or private information of the software. As per this norm, the reseller may not have the right to pass on vital information about the application to other parties. It is also possible that the owner withholds certain software rights and prevents the reseller from using them, such as trademarks. Even after stating this, if the reseller uses these, they can be sued on the grounds of copyright infringement.
When it comes to any agreement, the payment terms must be stated. For example, if the owner is paying a certain amount to the reseller monthly or if there is any percentage sharing based on the sales, it must be illustrated. Further, the mode of payment, due dates, late payment charges, etc., must also be mentioned in the agreement.
As a reseller, the person himself must be aware of how the software works. Only then shall they be able to sell or market it better. If the reseller and the publisher have decided upon any training sessions, it must be outlined in the agreement. Furthermore, if there are any other clauses that the parties have agreed upon, they must be mentioned within the contract.
Types of SaaS reseller agreements
When it comes to a SaaS reseller agreement, there are a few types of contracts that you must know about. Here are some of them-
- Top-Down Arrangements
- Bottom-Up Arrangements
- Third-Party Contracts
There is a fixed guideline for resellers forming contracts with their customers. It lays out the standard customer terms that are suitable for high-volume deals.
In the structure, there is an active negotiation between the third party and the reseller. It is more practically feasible and is often used by large corporate customers.
These are the riskiest and the most complicated type of contracts. Within this, the customer wishes to become a reseller themselves. However, they act as a second party to the reseller and a third party to the publisher.
What is the Role of a Lawyer in SaaS Reseller Agreement?
Drafting contracts and ensuring that they are up to date and all aspects are met is tricky. At the same time, these contracts must be fruitful and mutually benefit each party for a long-term alliance. A lawyer can assist you with the life-long technicalities by drafting the contract himself. Here is why hiring a lawyer is a good idea-
- Understands the Technical Norms
- Payment System
- Fix the Number of Resellers
- Value Added Services
It is ideal to be safe and secure before signing any contract or agreement with the software owner that can put you in a fix later. A lawyer will help you understand the technical aspects of the contract and take your opinion on what you want. Based on this, they shall negotiate the terms with the publisher.
Most resellers have a defined pay structure of their own. However, it can also vary as per the software or the publisher. Generally, a fixed monthly amount is decided upon, along with a percentage in profit-sharing. These must also be clear if the third party offers discounts.
Having a large number of resellers for a single SaaS product can increase your competition in the market. If you wish to cap this number, it is important to mention so in the contract. A lawyer will help you create this clause, where the owner is not able to make any more resellers. This gives you clear-cut leverage in the market.
As a reseller, you will always seek ways to upscale your service to the customers. Adding side services will help boost your client base and the sales of the product. However, the reseller must take prior permission from the owner or the publisher to provide additional services to their customers. These services can include free installation of the product, live demonstration, or free use for a set time.
Conclusion
If you are planning on becoming a SaaS reseller, you now know the things that you must consider beforehand. There are a number of complications, such as copyright infringement, revenue sharing, and limitation to distribution, that must be decided on. An agreement helps you protect yourself in case things go south in the future. To make things easier for yourself, get a lawyer on board to help you with expert advice. You can simply visit ContractsCounsel and get the best legal advice today.
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I have been practicing law for 35 years. In addition to my law degree, I hold an MBA. I've created six companies, currently act as outside counsel to another 12, and have been an advisor to more than 500 startups and entrepreneurs.
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My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.
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Jingjing L.
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I have had my own law practice since 2014 and I enjoy solving my clients’ problems. That’s why I constantly stay on top of the latest developments in the law and business of startups, entertainment, art, intellectual property, and commercial enterprise. I constantly keep learning because everything I learn helps me make my client’s life better. I assist clients in all aspects of copyright, trademark, contract, trade secret, business, nonprofit, employment, mediation, art, fashion, and entertainment law. Even though I am licensed to practice law in NY, I have worked for clients all over the country and even in Europe, Africa, and Latin America. No matter the client, I always look for ways to protect their assets, artworks, businesses, and brands with strategies to help them grow. I am a fluent bilingual legal professional who can analyze complex legal and business problems and solve them creatively for the benefit of my clients. I am detail-oriented and attentive which makes me excellent at negotiating, drafting, and revising all types of agreements and deals. I advise creatives and companies on intellectual property issues, risk management, and strategic planning. My clients love what I do for them because I employ a practical, client-tailored, and results-oriented approach to their case, no matter how small.
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ContractsCounsel User
Draft a standard reseller partnership agreement for a software SaaS company
Location: California
Turnaround: Less than a week
Service: Drafting
Doc Type: SaaS Reseller Agreement
Number of Bids: 8
Bid Range: $800 - $1800
ContractsCounsel User
Review Reseller Agreement for Technology Consultant
Location: Texas
Turnaround: A week
Service: Contract Review
Doc Type: SaaS Reseller Agreement
Page Count: 15
Number of Bids: 9
Bid Range: $600 - $1500
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