SaaS Service Agreement: Everything You Need to Know
A SaaS service agreement outlines the terms and conditions of a software as a service product.3 min read
A SaaS service agreement outlines the terms and conditions of a software as a service product.
Software as a Service Agreement Template
The following template will help you create your own SaaS agreement.
This Software as a Service (SaaS) Agreement has been created and agreed upon on [AGREEMENT DATE], which is referred to as the "Effective Date" between [NAME OF PARTY A], [whose residence is located at / a [CORPORATE JURISDICTION] corporation doing business at [ADDRESS OF PARTY A]] and [NAME OF PARTY B], [whose residence is located at / a [CORPORATE JURISDICTION] corporation doing business at] [ADDRESS OF PARTY B]].
All terms that are capitalized in this agreement should later be defined in the agreement section entitled “Definitions.”
1. Grant of License to Use and Access the SaaS. [PARTY A] grants to [PARTY B], including to all authorized users associated with PARTY B, a non-exclusive, royalty-free, worldwide, and non-assignable license to use and access the [SERVICE DESCRIPTION] (hereby referred to as the “Service”) strictly for [PARTY B] to use for its internal business operations, in accordance with all policies and terms listed at [PARTY A's URL]. [PARTY B] may not sub-license the SaaS to additional parties under this agreement.
2. Fees. [PARTY B] must pay [PARTY A] the required monthly subscription fee of $[AMOUNT OF SUBSCRIPTION FEE] (hereby referred to as the "Subscription Fee") for the SaaS provided under this agreement.
3. Payment. [PARTY B] must remit payment to [PARTY A] in the amount of the Subscription Fee
3.1 due on the [DAY] of every month,
3.2 in funds that are immediately available to [PARTY A], and
3.3 to [PARTY A's] account listed below:
4. Taxes. The required Subscription Fee outlined in this agreement does not include taxes. [PARTY B] is responsible to pay any and all required taxes that apply to payments under this agreement.
5. Interest on Late Payments. If the Subscription Fee is not paid in full on the due date, any unpaid amount will incur interest. The interest will begin on the due date and end on the date on which the full amount is paid at the rate of  percent per month ([12.68] percent annually) or the highest amount permitted by law, whichever is less.
6. Support Services
6.1 Initial Support. For the first 12 months following the effective date of this agreement, [PARTY A] shall provide the following to [PARTY B], at the expense of [PARTY A]:
a. Online-based support, available 24 hours a day, seven days a week; and
b. Electronic or telephone support during the normal business hours of [PARTY A], to help [PARTY B] identify and resolve problems with the SaaS and any related needs.
6.2 Renewed Support. At the end of the 12-month support period, [PARTY A] must offer the option to renew support services in additional 12-month increments at the current service rates of [PARTY B].
7. Service Levels
7.1 Applicable Service Levels. [PARTY A] must provide the SaaS to [PARTY B] with the availability of the system of at least  percent per calendar month.
7.2 System Maintenance. [PARTY A] may
a. Take the SaaS offline for required scheduled maintenance, as long as it provides the schedule to [PARTY B] in writing. However, this scheduled maintenance time will not count against [PARTY A] in regard to the required system availability; and
b. Make any necessary changes to its maintenance schedule with written notice, provided at least one month in advance of the change to [PARTY B].
7.3 System Availability Definition
a. The system availability refers to the percentage of minutes that the system is available per month. This percentage of minutes includes when key components of the SaaS are functional and operational.
b. System availability doesn't include downtime minutes that result from:
- Malicious system attacks
- Issues with computing devices, internet service providers, online connections, or local area networks belonging to [PARTY B]
- Events of force majeure
- Acts or omissions of [PARTY B], resulting in an inability for [PARTY A] to deliver services
8. Data Protection. [PARTY B] is responsible to put reasonable safeguards in place to prevent unauthorized use of, disclosure of, or access to the critical data.
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