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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. Specifically, the SaaS reseller sells and markets software as a service. 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. However, it is not the sole measure to prevent copyright cases so make sure you have the necessary licenses and permission to sell the software. 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

    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.

  • Ownership Clause

    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

    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.

  • Payment Terms

    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.

  • Additional Services

    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.

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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

    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. A top-down arrangement is typically used when the reseller is selling SMEs.

  • Bottom-Up Arrangements

    In the structure, there is an active negotiation between the third party and the reseller. A bottom-up arrangement is often used when working with large corporate customers.

  • Third-Party Contracts

    These are the riskiest and the most complicated type of contracts. A third-party contract is used when a third-party is going to sell or distribute your SaaS on your behalf. A vendor grants the reseller rights to enter into a contract with a third-party.

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. Consult with a qualified attorney who specializes in technology and contract law. Here are some reasons why hiring a lawyer is a good idea:

  • Understands the Technical Norms

    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.

  • Payment System

    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.

  • Fix the Number of Resellers

    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.

  • Value Added Services

    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.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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