SaaS Agreement Template

SaaS agreement and terms and conditions template – what you need to know

The basics: In simple terms, a software as a service agreement (or SaaS agreement) outlines the terms under which a particular SaaS software application can be used. It identifies the software and services the customer can access, alongside the terms governing their use.

Choose the format that suits the transaction: This template can create either a standalone SaaS agreement signed by both parties or supplier-side SaaS terms and conditions for use with an Order Form. Use the standalone agreement for a single negotiated contract containing the parties’ details, commercial terms and signatures. Use the terms and conditions where customer-specific details will be recorded in a separate Order Form, quotation or proposal that identifies and incorporates the terms.

Using the terms and conditions format: Give the terms an effective date and, where appropriate, a version number. Each Order Form should identify the applicable terms, name the customer, describe the Software and Services, and set out the fees, commencement date, subscription period, renewal arrangements and other transaction-specific details. An Order Form becomes binding when it is signed by both parties or otherwise accepted in writing by each party. The accepted Order Form and the terms then form a separate Agreement for that order. The terms should be made available to the customer before the Order Form is accepted, and the supplier should retain evidence of the version provided.

Between supplier and customer: A SaaS contract governs the relationship between a software supplier and a business customer. The supplier provides the services to the customer via a network, typically the internet, and hosts the software remotely, often relying on third-party processors such as hosting providers. This allows the supplier to update and control the software centrally, while the customer accesses it using its own equipment, usually on a subscription or usage-based payment model.

For a more in-depth look at SaaS agreements and why they matter, read this comprehensive guide.

Why document the supply and use of software?

Risk of unexpected restrictions: For customers purchasing software as a service, it is important to define clearly the scope of their rights to use the software. This is particularly important where the customer is procuring business-critical software. Unless the permitted use, duration and any user limits are properly documented, there is a risk of unexpected restrictions or suspension that could significantly affect the customer’s business.

Protecting rights in the software: It is equally important for software suppliers to document the terms on which the software is provided. Clear terms help ensure that: (i) the software is not exploited or used outside the agreed scope; (ii) it is clear when and what the supplier will be paid; and (iii) the supplier’s intellectual property rights and ownership of the software are protected. The template sets out rules and restrictions governing use of the software by the customer and its authorised users.

What are the key benefits of using Docue’s SaaS template?

To establish clear ownership and licensing terms: The template sets out the customer’s access and usage rights, applicable restrictions and ownership of intellectual property rights in the software. This establishes clear boundaries and helps both parties understand their rights and obligations.

To mitigate legal risks: By documenting the SaaS arrangement in writing, the parties can reduce legal uncertainty associated with the use and supply of the software. The template addresses matters including warranties, confidentiality, data protection, termination and liability. It also includes an optional intellectual property rights indemnity. For more information about warranties and indemnities, read these FAQs.

Drafting appropriate to the chosen format: In standalone-agreement mode, relevant alternatives allow the drafting to reflect whether you are acting for the supplier or the customer. The terms and conditions format is designed as supplier-side terms for offline B2B sales using Order Forms.

Fully customisable: The template can be tailored to the relevant software, services and transaction. By answering a series of questions, Docue will generate either a standalone SaaS agreement or reusable SaaS terms and conditions reflecting the options selected.

Clearly define pricing: The template supports different pricing structures, including a fixed upfront fee or ongoing subscription fees. In a standalone agreement, the pricing details can be included in the agreement itself. When using the terms and conditions format, the applicable pricing should be recorded in the relevant Order Form.

Up-to-date compliance: This template is regularly reviewed and updated by qualified lawyers to reflect relevant legal and regulatory requirements. This helps businesses keep their contractual documents current and manage the risks associated with non-compliance.

Why use Docue’s SaaS template?

Key provisions: The template contains provisions covering:

the customer’s rights to access and use the Software;
restrictions on use and authorised users;
service levels and optional support services;
intellectual property rights;
fees, invoicing and payment;
confidentiality and data protection;
warranties, indemnities and limits on liability; and
term, renewal and termination.

If you are ready to create your own contract using this template but want more information about the clauses that may be needed to protect your business, read this checklist.

You can also include support services: The template includes optional provisions covering support services relating to the SaaS, such as maintenance, customer support and resolving software errors. In the terms and conditions format, the relevant Order Form should identify the support services purchased by the customer and any applicable charges or service levels.

Assumptions: This template is intended for business-to-business transactions. It is not designed for sales to consumers or for use as online checkout terms. It assumes that English law applies and that the courts of England and Wales have exclusive jurisdiction.

Other software agreements

When should the software licence agreement template be used instead? If the software is installed on or accessed through the customer’s own systems, rather than hosted by the supplier or provided through a cloud-based platform, the Software Licence Agreement may be more appropriate.

For a deeper look at the differences between these types of software contracts, read this blog or listen to this podcast for a jargon-free breakdown.

When should an EULA be used? In addition to using a SaaS agreement or SaaS terms and conditions with a customer, SaaS providers often ask individual end users to accept an End-User Licence Agreement (EULA). An EULA governs an end user’s use of the software or service and helps protect the SaaS provider by establishing applicable rules and restrictions. Docue’s EULA can be used for B2B and B2C arrangements. For more information about the differences between SaaS agreements, software licence agreements and EULAs, read this guide.

When should an API licence agreement be used? If the software owner will be granting access to an application programming interface (API), an API Licence Agreement may be more appropriate. This template sets out the terms governing access to and use of the API by a software developer.

Do you still have questions about SaaS contracts? Read these six frequently asked questions, in which our legal experts address common SaaS agreement queries.

Why Docue?

Quick and simple to use: With Docue, you can create a high-quality standalone SaaS agreement or set of SaaS terms and conditions quickly. The template includes model clauses designed by qualified lawyers and guides you through the choices needed to tailor the document to your business.

Full contract process: A standalone agreement can be sent to the other party for electronic signature. When using the terms and conditions format, the terms should be supplied to the customer before the relevant Order Form is signed or otherwise accepted in writing. You can use Docue to collect signatures electronically and store your agreements, terms and accepted Order Forms in Docue Drive.

Transparent pricing: Docue provides transparent and cost-effective pricing options for businesses of different sizes. Our pricing structure gives you the flexibility to choose a plan aligned with your budget and requirements. Information about our pricing tiers is available online, with no hidden fees or unexpected surprises.

Tags: SaaS agreement template, SaaS agreement, SaaS contract, SaaS terms and conditions, software as a service agreement, software subscription, SaaS order form