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As a SaaS provider, you should avoid writing your SaaS agreement yourself. There are plenty of SaaS agreement templates on the Internet that can help companies save money instead of hiring lawyers. However, keep in mind that your SaaS business is different, meaning if you adopt the template and try to adapt it to your own SaaS business, you'll most likely miss out on your company's exclusivity.
In this article, we'll discuss the value of hiring a SaaS lawyer to help you draft a SaaS contract.
Basic criteria of a SaaS lawyer
A good SaaS lawyer should be familiar with the basics of the industry. If he can't explain how SaaS is different from buying a program outright, he isn't the right lawyer for you. He must not only know what SaaS is and how it differs from installable software, but also be able to explain the specific advantages of the industry and its potential drawbacks — there are numerous aspects. This knowledge shows that he has the necessary training and can draw up contracts that protect you.
What to look for when hiring a SaaS lawyer
When looking for a SaaS lawyer, you should consider the following criteria:
Credentials
- Your SaaS lawyer should be able to provide verifiable credentials as well as a list of successes in the industry to demonstrate their expertise.
Know-how
- The lawyer you hire should have the necessary experience and knowledge and be specialized in your industry or niche market. This is not limited to SaaS.
Structure
- An independent lawyer working in a rented office may be best for you, or he may be one of the hundred partners of a large law firm. The most important thing is that, due to its size, the agency can allocate the necessary time to help you Drafting your contracts and agreements to support.
Remuneration
- Finally, price or remuneration can also play a role. Look for someone who is open and honest about their fees and billing policies.
Key clauses that your SaaS lawyer should know by heart when drafting a SaaS contract
Depending on the industry, product and service, the various SaaS contracts contain different clauses. However, your appointed SaaS lawyer must be familiar with some of the following characteristics, which all cloud-based software contracts are common.
Rights: A contract must protect your ownership of the software even after purchase. It should also determine how much data a user may access and to what extent. Your agreement must set the standards and penalties for those who violate the rights set out in the software terms.
Customer service: Most companies are proud that they put their customers first. If you do this, you must let your customers know how you intend to maintain the relationship. Will you be available 24 hours a day, seven days a week to answer questions about the software? How long will it take you to respond to customer emails? You must address all of these questions.
Data ownership and protection - This is an important clause. It determines who has access to the data entered into the software. It also contains important information such as:
- How will the licensor protect users' data?
- How often is the data backed up?
- Where is the data stored?
- What happens when a data breach occurs?
- What happens to the stored data after the services have ended?
Limitation of liability - This clause protects you from potential litigation. You must include a list of all warranties related to the software and its use.
Software performance goals - This clause informs the user about the software you offer. It should include the following points:
- You can expect significant results from the software.
- Performance-based guarantees.
pricing - Because SaaS is a cloud-based way of delivering software to users, you must include a clause that states when and under what conditions the prices of the software can be updated. It should also include the subscription payment options available to users.
External service agreement - This is a contract between the service provider and its external customers. It determines acceptable levels of service and compensation to the customer if the provider does not provide these services. Therefore, providers must be careful when setting a minimum level of performance for their SaaS.
Software updates and support - Your customers need to understand how you distribute software updates Are you providing your customers with sufficient access during the latest update and maintenance? Do you provide support or feedback during the process? If so, let them know how and where.
Subscription options - This clause details which services are available under various subscription options.
Termination and renewal - This clause sets out the steps that the user must take to cancel their SaaS subscription. It also includes an extension clause in the event that the customer decides to continue using the SaaS provider. A cancellation clause specifies what happens if a customer does not make a payment, violates the contract, or wants to cancel the subscription. Most SaaS providers have perpetual renewal clauses that automatically renew the contract unless the user cancels it.
