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What is a SAAS Agreement?

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5.Sep, 2019 0 SaaS Law

Chances are you are able to read this because of software, perhaps Chrome, which when you set up must have had an encounter with a SaaS agreement. Softwares are applications, scripts, and programs that enable a device to run or connect to the interweb. In the past, Softwares came in floppy disks or shiny CDs, these days, all you need to do is visit the supplier’s website and download it in seconds. Businesses now leverage software for automation that allows for faster revenue growth and efficient management of the growth. 

SaaS is the acronym for Software as a Service that provides cloud-based software services for customers, usually in a subscription model or an on-demand model. Most also refer to SaaS as ASP (application service provider). SaaS and ASP can be used interchangeably as both refer to providing software services to customers online. Uses of SaaS by businesses, organizations, and individuals range from client relationship management, document management, billing and a host of others.

A SaaS agreement is the legal document that governs the relationship between the SaaS provider and the SaaS customer. It sets out the rights and obligations of both parties with the aim of protecting the same. Usually, a SaaS agreement is a package including other agreements like the SLA (service level agreement). 

SaaS agreements do not transfer ownership of the software to the customer. It only grants the customer access to the use of the software within the scope agreed on in a subscription package.

The importance of a SaaS Agreement comes into focus when issues of data breaches or cyber-attacks happen. To what extent is the liability of the suppliers, any available remedies for customers? These are questions a SaaS agreement will answer and make adequate provisions for. Check out our next post for key provisions a SaaS Agreement must contain. In the meantime, if you would like to learn more, get in touch with us.


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