Software as a Service ("SaaS") Agreement

A software as a service (SaaS) agreement is a contract which governs the terms between a software supplier and a customer, where software is being provided via the internet. Read more
Legislation GB-EAW
Topics Updated by a lawyer: 29 Mar 2023

Software as a service agreement – 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. This agreement identifies the specific software the end-client would be able to access, alongside the terms under which they’re able to use it.

Between supplier and customer: A SaaS agreement is a contract which governs the terms between a software supplier and a customer. The supplier provides the services to the customer via a network (typically the internet) and hosts the software remotely, typically relying on third-party processors such as hosting providers to do so. This allows the supplier to easily update and control the software from one site (usually, data is uploaded to the “cloud”). The user can then directly access the software on their internal equipment (as the SaaS agreement incorporates a licence to do this), on a pay-by-use or subscription basis.

Why document your use of software?

Risk of unexpected restrictions: For customers purchasing software as a service, it is important to clearly set out the scope of their rights to use that software in a SaaS agreement. Particularly where a customer is procuring business-critical software, unless the scope of the licence is clearly defined, there is a risk that the software supplier could suspend or restrict the use of the software which could have a major impact on the customer’s business. The SaaS agreement should set out how long the customer is entitled to use the software, to allow for continuity of use.

Protecting rights in the software: It is equally important to document the terms relating to the provision of software for software suppliers to ensure that: (i) their software is not exploited; (ii) it is clear when and what the supplier gets paid for licensing the software; and (iii) the supplier’s rights in, and ownership of, the software are protected. The SaaS agreement will set out clear rules and restrictions on the use of the software by the customer and its authorised users.

SaaS agreement that adapts to your needs

This SaaS agreement template contains alternate clauses depending on whether you are the supplier of software or the customer receiving the software. This means that it is tailored to protect your interests as either customer or supplier, and fully customised for your business.

Why use this SaaS Agreement?

Key provisions: This SaaS agreement is a key contract for both parties and allows a business to distribute software access in an efficient manner. This SaaS agreement template contains key provisions in relation to:

  • the customer’s rights to use the software as a service;
  • restrictions on the use of the software;
  • intellectual property right protections;
  • the fee structure and payment terms;
  • limits on the supplier’s liability; and
  • software warranties and disclaimers.

You can also include support services: The SaaS agreement template also contains optional clauses to cover the provision of support services relating to the SaaS (e.g. support relating to installation, maintenance and fixing bugs/issues/errors) by the software supplier to the customer, if required.

Assumptions: This SaaS agreement template assumes that the relationship between the parties is B2B, and that the agreement is subject to English Law and the English courts.

Other software agreements

When should the software licence agreement template be used instead: If the software is being accessed via the customer’s own system (as opposed to from the supplier’s systems (or via a cloud-based platform)), the Software Licence Agreement would generally be more appropriate.

Why Docue?

Quick and simple to use: With Docue, you can create a top-quality SaaS agreement in no time. The service includes model clauses designed by UK qualified lawyers to help you draft the contract yourself and tailor it to your needs.

Full contract process: Signatures can be collected electronically, and all contracts you make are saved in your company's own contract account.

Tags: SaaS agreement, SaaS contract, software as a service agreement, software subscription

Legislation GB-EAW
Topics Updated by a lawyer: 29 Mar 2023

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