Best Practices for SaaS Agreement Suggested by Corporate Commercial Lawyer

 

With the fast-paced world and advanced technology, a wide range of businesses are adopting software as a service approach for seamless business operations and functions. In today’s ever-evolving digital world, SaaS has become an essential part of the business world and modern workflows. From project management tools to customer relationship management, SaaS has everything in its aspect to facilitate seamless work operations of businesses. Since the technology the SaaS companies provide is quite complicated, the relationship between the SaaS provider and businesses is filled with various legal formalities and issues. With these alarming consequences, there comes the need for well-defined SaaS agreements.

 

 

It is indeed normal not to grasp the entire concept of SaaS agreements right away but understanding the basics and negotiating terms is quite important to avoid any legal issue. Before proceeding further, let’s know more about SaaS agreements. A SaaS agreement is defined as a legally binding document which briefs the terms and conditions governing the use of software services delivered over the Internet. With the help of lawyers’ instant advice and suggestions, the contract also ensures a clear understanding of the services provided and the expectations of the customers.

 

The SaaS agreement practices vary from organization to organization and need thorough consideration and expert help while drafting. In this article, we will read about the best practices for SaaS agreements which can further enhance operational efficiency and compliant usage of the services without any hassle.

 

 

Collaborate with Stakeholders

The top corporate law attorneys in the UK suggest businesses collaborate with stakeholders early in the process of SaaS agreement. By doing so, the businesses can ensure that the final agreements perfectly align with the vision and goals of the business. Identify all the stakeholders who can impact the terms of the SaaS contract including IT, legal, finances, procurement, and business development teams. Discuss the budget, compliance and regulatory requirements of the organization and clearly mention each term in the contract.

 

Store Contracts in a System of Record

One of the essential aspects to keep in mind for maintaining SaaS agreements is to keep them in a systematic record. It means storing contracts in a centralized repository for easy access. The record should have necessary details such as vendor name, start & end date, renewal date, spend, usage, and application owner. It helps businesses to ensure that stakeholders have access to the same information which further reduces the risk of communication gaps and errors.

 

Check Terms and Renewals

Typically, SaaS-based services have set licence terms which must be represented in the agreement. According to a corporate commercial lawyer, unless proper notice is given, an evergreen renewal term is specified in the SaaS agreement which signifies that the contract automatically gets renewed on the specified date until cancelled. When it comes to renewal terms, SaaS companies are highly attentive to how they charge the businesses, any variation in automatic renewal is closely regulated. The businesses can cancel or turn off their auto-renewal at the time of the drafting of the contract with some legal considerations.

 

Intact Termination Policies

Both SaaS service providers and businesses need to maintain intact termination policies for fair legal communication. The agreement should define mutual termination rights which give the right to terminate the contract to both parties on certain legal conditions. The service provider can terminate the contract by noticing the customer either the service is discontinued or any material change to the service which makes it unacceptable for the customer. If the client fails to provide or any other material breach such as failure to follow policies and intellectual property infringement, the SaaS provider can also terminate the contract. The business and service provider can define other termination terms as per their mutual discussion.

 

Notice, Cure Periods, and Solutions

Another major aspect of a SaaS agreement is the cure period and solutions. With the help of lawyers’ instant suggestions, the parties should also define terms related to prior notice and an opportunity to cure any problem. Generally, the user has instant termination rights such as provider breach, change of control, or infringement of intellectual property rights. The SaaS contract should include explicit language for the prompt return of user’s data upon the conclusion of the agreement as well as seamlessly transferring the personal data to the new vendor.

Intellectual Property Rights

Intellectual property rights play an essential role in SaaS agreements and any business-related contract. The SaaS licence agreement needs specific terms and regulations stating that the customer or user understands that they are getting a licence to use the service in a defined way and the provider retains the ownership of the intellectual property rights of the software. It should also outline the scope and limitations of the agreement. In the same manner, the user also gives a licence to the SaaS service provider to use their specific data or content. If the SaaS provider leverages the consumer's data or content in any way without their consent, it violates the client's intellectual property rights and the client can take appropriate legal action. All these clauses must be clearly mentioned in the SaaS agreement.

Warranties and Disclaimers

Last, but not least, SaaS contracts must include warranties and disclaimers compliant with applicable law. With the help of corporate law attorneys in the UK, you can draft a reliable and legally compliant SaaS agreement without any worries. This clause defines the expectations of each party and provides a course of action if any representation or warranty is breached. There must be a broad and defined disclaimer in the contract which represents the excluded warranties and representation clauses.

 

It is indeed daunting to understand the whole concept of SaaS agreements, but understanding the basics can also do the work. In this ever-evolving digital world, it is essential to stay updated with the new software and strategies in the industry to avoid any legal compliance. If you are also thinking of legally associating with a SaaS service provider and looking for the best legal advice in the UK, you should consider turning to Legateca for your legal needs.