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Customer Protection in a SAAS Agreement

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30.Jan, 2020 0 SaaS Law

Nowadays, the adoption of Software as a Service (SaaS) solutions that run in the cloud, as opposed to traditional software tools that are hosted on and run on the customer’s environment, relentlessly continues to gather prominence. And like all other service relationships, SaaS relationships are governed by agreements that specify the rights and obligations of parties, including forms of protections for parties. 

We’ve already examined vendor protections in an earlier piece, so we shall proceed to examine the various protections that avail customers under SaaS agreements.

Data & Information Protection

Customers typically have concerns about the security, storage, and usage of their data and information which are stored in cloud-based tools. This isn’t so surprising in light of past instances of customers’ data mismanagement and misuse by businesses. SaaS agreements settle these data concerns by stipulating what vendors can and cannot do with the data, including industry standards on data security like encryption. In the same vein, protection also comes in prior notification of what category of breached, misused, or mismanaged data the vendor can or cannot be held liable for.

Conflict Resolution

In human relationships, conflicts and disputes cannot be entirely ruled out. This explains why SaaS agreements stipulate how disputes between vendors and customers should be resolved. It is important to note here however that SaaS vendors often protect themselves by absolving themselves from virtually all liabilities in SaaS agreements. So, customers can only litigate or set other alternative dispute resolution means into motion, when grave injuries or inconvenience has been suffered.

As final words, customers should exhibit due care when signing or assenting to SaaS agreements, by striving to understand the terms of agreements – and negotiating unfavorable terms, where possible. Failure to do so may lead to irreversible consequences.

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