Simple SaaS Agreement: Everything You Need to Know
A simple SaaS agreement outlines the terms and conditions of software as a service and is agreed upon by the SaaS vendor and the one who will use it.3 min read
Updated November 10, 2020:
A simple SaaS agreement outlines the terms and conditions of software as a service and is agreed upon by the vendor of the SaaS and the company or individual who will use it.
SaaS Agreement Contents
Even a simple SaaS agreement should contain certain key aspects to maintain legality and protect both parties. One section should be entitled "Definitions" and include the definitions of any terms, words, or phrases that may not be understood by all involved parties. The credit section should outline the warning regarding free licensing of documents and any docular credit. The term section should include when the agreement term will start and end.
Under the hosted services section, examples include:
- Grant of a license to use hosted services
- FAOD exceptions to the availability of hosted services
- Creation of account for hosted services (no acceptance or setup)
- How unauthorized access to hosted services will be prevented
- Availability of the hosted services
- Acceptable use policy on hosted services
- Limitations on use of hosted services (should be a short form)
- Access to platform code
- Whether hosted services will be suspended
- Restrictions on damaged or unlawful use of hosted services
- Prohibitions on the use of the hosted services
When outlining the maintenance services in a simple SaaS agreement, make sure to include any provisions related to maintenance services, notices related to scheduled maintenance, SaaS updates and upgrades, and whether maintenance services or hosted services will be suspended at any time for any reason.
Some of the most common items to include under the support services section include:
- Provisions related to support services
- Obligations related to help desk support
- Response time for support services
- Suspension for support services
- Standards related to support services
Within the customer data section, it includes information about second-party data licensing if the agreement relates to hosted services. Additionally, outline any warranties that relate to the second-party data, as well as how data will be restored and backed up by the second party.
If the SaaS has a mobile app, make sure to mention that this app will be governed by terms outlined in a separate agreement. The agreement should not assign intellectual property rights. The obligation of both parties to pay any required charges should be outlined in the agreement, along with any charge variations, time-based limitations on charges, and whether the charge amounts include or exclude VAT.
The payment section is another important aspect of any simple SaaS agreement. Outline how invoices will be issued, what methods of payment are accepted, how interest will be accrued on late payments, and how soon payments will be due upon receipt of invoices.
A SaaS provider has obligations to protect the confidentiality of the client. Include data about these obligations in the agreement, including:
- The undertaking of confidentiality by the first party
- First-party confidentiality obligations following termination of the agreement
- Disclosures of any confidential data as required by law
- Exceptions to first-party confidentiality obligations
- Disclosure by first-party to certain individuals
Protecting data is another critical aspect of the SaaS agreement. Make sure to outline how the software vendor will comply with any laws concerning data protection and the warranty offered to the customer concerning their rights to disclose any personal data. This section should discuss specific details of what constitutes personal data and how that data will be processed by the vendor. The duration of processing personal data should be included, along with the method of informing the customer of any illegal instruction.
A SaaS vendor must secure the personal data, appoint a sub-processor for data management, and receive authorization from the customer to work with that sub-processor. If the vendor deletes any of the customer's personal data, this section should outline what will happen next. Should the data protection laws change, the vendor may need to notify the customer and amend this section.
Under the warranties section, include information about all types of warranties:
- First-party general
- Legality of hosted services
- Intellectual property infringement
- Second-party authority
This section should also outline any exclusions, implied warranties, and breach terms.
Acknowledge that hosted services will never be completely free of errors, entirely secure, or compatible with every device. Make sure to include a clause that no legal advice will be granted with the agreement for hosted services.
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