[…] What you shouldn`t use for a SaaS application is an EULA, because the customer doesn`t get any software that they need a license to use. Instead, […] I am an attorney in Denver, Colorado with 13 years of experience working with individuals and businesses of all sizes. My main areas of activity are general corporate/business law, real estate, commercial transactions and agreements as well as mergers and acquisitions. I strive to provide exceptional representation at a reasonable price. SaaS customers expect reliability from SaaS technology providers. Especially for SaaS services that customers consider critical, savvy SaaS customers are looking for robust service level agreements and support terms to provide them with convenience. A sample SaaS contract can include an SLA detailed in the appendix, or several options that a customer can choose from in a support portal. SaaS technology providers often offer a basic level of service, and more sophisticated SaaS services can provide higher levels and support options. A SaaS provider must include the details of its service level commitment in its SaaS contract.

Customers also have specific concerns about the use of data, especially if a SaaS contract gives the SaaS provider the right to use SaaS customer data or data generated by SaaS customers` use of SaaS services. If the SaaS service is not intended for a specific industry, SaaS technology providers may face customers subject to different regulatory structures that govern the use, processing, and storage of data. These agreements provide the framework within which the SaaS provider is able to provide SaaS services to its customers, so they must be negotiated to assign risks and responsibilities to third parties, where appropriate. SaaS agreements are an integral part of any software-as-a-service business. Be sure to work with lawyers who know how these contracts work when you create your contracts. A SaaS agreement is similar to a license agreement. However, unlike a license agreement, SaaS companies do not offer a physical product or installation; instead of providing a physical CD or a download of a product, a SaaS purchase agreement licenses the right for another company to use the software through the cloud. The customer may only use the software in accordance with the terms of his subscription. SaaS technology providers should also look at where they stand in their own IT ecosystem. SaaS contracts with customers are an important piece of the puzzle, but what about the SaaS technology provider`s own licenses, SaaS contracts, and other agreements with its own HARDWARE and software vendors? In addition, a SaaS contract generally gives the SaaS technology provider the right to terminate and/or suspend the provision of SaaS services in the event of a breach or omission by its customer.

A software-as-a-service agreement or a cloud service agreement is a license agreement that grants a subscriber the right to access and use hosted services. It is different from a software license agreement, which grants the licensee the right to a copy of the licensed software. No matter how your SaaS works, you must have terms of use and privacy policies in place for users. These agreements serve different purposes. SaaS, or Software as a Service, is a business model that is rapidly gaining popularity. SaaS companies are companies that offer software through a subscription, often with price levels instead of selling a single installation. These companies must use specific contracts to support their subscription model. SaaS agreements are essential whenever a company chooses to license software rather than sell it directly. Any company that chooses to license cloud-based software must implement conditions, limitations, and disclaimers, or risk litigation and loss of revenue. While it may seem obvious, many SaaS contracts do not adequately inform a customer about what is included and excluded from SaaS services. This area is important for the SaaS technology provider because it should only commit to providing certain services and exclude all others. If the SaaS Service requires third-party materials to operate effectively, the SaaS Agreement shall assume responsibility for acquiring the rights to such materials.

A sample SaaS contract can handle this through exhibits or even links to online resources. In some cases, a SaaS technology provider will want to mitigate its own risks by maintaining agreements with multiple redundant providers of critical IT infrastructure and deploying some critical external components of the business internally. Given the complexity of different subscription levels and services, your legal team may have to spend hours on each SaaS contract. You must search for data on multiple systems that do not communicate with each other. You also need to convert the data from its original form into a format that can work in the contract. These terms can take different forms, but are usually combined with other provisions that limit the SaaS provider`s risk due to performance or reliability issues, sometimes through limited cash credits on future SaaS service invoices. A SaaS agreement, on the other hand, gives customers access to software and other technologies through the cloud, but no physical goods are exchanged. A SaaS agreement allows end users to access the relevant products online.

As a result, the structure of a SaaS agreement focuses on authorizing the use of a product rather than authorizing the use of the product as a service. Good question, but I don`t think it`s true that many or all SaaS services require loading software onto the end user`s computer. In most cases, the customer only looks at the screens generated by the software and sends instructions without receiving a copy. If the customer receives a copy of software, for example, . B something necessary to interface with the SaaS system, it must be licensed, as stated in the last paragraph of the article. However, this does not mean that the entire SaaS system requires a license. I think for the part that has not been downloaded, the provider is better off if it is quite clear that it does NOT give an IP license or copies. SaaS agreements also protect the company whose services are being used. They describe the ways in which customers cannot use their licensed software. For example, they may prohibit the customer from sharing it with others or using it to facilitate illegal activities. They may also contain clauses limiting liability in the event of a data breach.

These terms protect the company from loss of customers and revenue due to hacking or hackers. What would be the big disadvantage of granting both a license and some kind of service component? Just the fact that there is no need for maintenance of the software? At first, it made sense to treat the contract as a subscription, but after further reflection, I try to determine the real practical advantages of the paradigmatic preference of the service-based transaction over the license. SaaS contracts, or software-as-a-service contracts as they are sometimes called, come in different flavors and variants. An example of a SaaS contract from one company can be very different from another. However, in many cases, SaaS contracts from different SaaS technology providers will solve a similar area of legal problems. Questions or comments? Chat with me Do you like this article? Leave a comment and more will follow! It only takes a few seconds. A SaaS technology provider with a savvy customer base should also prepare for the issues that are often negotiated in SaaS contracts. Note that SaaS agreements are different from software license agreements and similar legal issues are treated differently in these contexts. However, in many areas, a SaaS service can raise new questions about whether it is covered by a regulatory framework or whether there may not be a current regulatory framework that provides guidance for laws decades ago. In other areas, detailed regulatory requirements can affect or impair a SaaS technology provider`s ability to serve a particular industry or sector. Almost all SaaS services end up collecting at least one piece of information that counts as personal data: a user`s email address. If you collect email addresses, this is enough to require a privacy policy.

It is not enough to have a single condition of use. Prefabricated processes make it easy to manage SaaS contracts. Combined with contract lifecycle management software, your team can set up great SaaS agreements in a fraction of the time. .