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Key Provisions in a SAAS Agreement

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10.Sep, 2019 0 SaaS Law

Our last post explained what a SaaS Agreement is and how it affects both suppliers and customers. Today’s post will be breaking down the key provisions that must be found in a SaaS Agreement.

Access to the Software

Every SaaS Agreement should expressly indicate the type of nationality, location and device permitted to access the software. Other requirements like user registration, application for access and specific activities allowed or disallowed should be stated. Thus, a supplier who does not intend for selected locations to access the software (called geo-blocking) needs to list out the banned locations.

Services and Functionality

This is the clause that itemizes what exactly the software will do for the customer. Here, exactness is the keyword. All ambiguity and vagueness need to be deleted from this clause in order to avoid disputes that may arise therefrom. 

Most suppliers use a general clause for services and functionality in the SaaS Agreement. However, where the services are customized, a customized clause should also be drafted to cover for the new tailored services.

User Obligations and Prohibited Use

Keeping personal information like password safe, updating software and notifying of a security breach are some obligations customers are bound by which should be contained in the SaaS Agreement. This is also the section to mention prohibited use like reselling, tampering, or pirating the software.

Billing and Payment

The acceptable mode of payment and billing for subscriptions to the software are detailed here. This also includes estimates for pay as you use models and amounts for fixed prices. Money is involved here, so also making provisions for a clear process for handling complaints is essential. This clause should also stipulate the services covered for each payment.

As already stated in previous posts, SaaS agreements are comprehensive, comprising of several smaller agreements like SLAs and privacy policies. Using the service of a specialist for drafting a SaaS agreement will ensure all areas are adequately covered, helping businesses avoid liabilities that could arise.

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