The Software as a Service (SaaS) Agreement: Elements, boilerplate template, and optional clauses
What is a Software as a Service (SaaS) Agreement?
The SaaS agreement is a legal contract between a service provider and a customer that outlines the terms and conditions for the use of software as a service, including payment, intellectual property rights, and liability limitations.
In a SaaS model, the software provider hosts the application on its own servers, manages the software, and provides access to the application to the customer through the internet. The customer pays a subscription fee for the right to access and use the software.
A SaaS Agreement typically covers several key aspects of the relationship between the provider and the customer, including:
- Scope of services: This section defines the scope of services that the provider will offer to the customer. It includes details on the features, functionality, and limitations of the software application.
- User access: This section outlines how users can access the software application, including login requirements, user roles and permissions, and any restrictions on use.
- Fees and payment terms: This section covers the fees and payment terms for the use of the software application, including the subscription fee, billing cycle, and any additional fees or charges.
- Data privacy and security: This section outlines the provider’s policies and procedures for protecting customer data, including data storage, backup, and disaster recovery.
- Intellectual property: This section defines the ownership and use of the intellectual property associated with the software application, including any copyrights, patents, or trademarks.
- Warranties and representations: This section covers any warranties or representations made by the provider regarding the software application, including its functionality, security, and performance.
- Termination: This section outlines the conditions under which either party may terminate the agreement, including breach of contract or non-payment of fees.
Overall, a SaaS Agreement is a critical document for both the software provider and the customer, as it outlines the terms and conditions for the use of the software application and helps to ensure a clear understanding of the rights and responsibilities of each party.
This boilerplate Lease Agreement template is available at SimpleSignRequest.com
SOFTWARE AS A SERVICE AGREEMENT
This Software as a Service Agreement (the “Agreement”) is made and entered into on [Date] (the “Effective Date”), by and between [Party A Name] (“[Party A]”), with its principal place of business at [Party A Address], and [Party B Name] (“[Party B]”), with its principal place of business at [Party B Address].
WHEREAS, [Party A] owns and operates certain software applications, as well as related services (collectively, the “Services”);
WHEREAS, [Party B] desires to use the Services provided by [Party A] and [Party A] desires to provide such Services to [Party B], subject to the terms and conditions set forth in this Agreement;
NOW, THEREFORE, the parties agree as follows:
1.1 Provision of Services. [Party A] will provide [Party B] with access to the Services according to the terms and conditions of this Agreement.
1.2 Service Levels. [Party A] will provide the Services in a professional and workmanlike manner consistent with generally accepted industry standards.
1.3 Changes to Services. [Party A] may modify the Services at any time upon notice to [Party B] of such changes.
- TERM AND TERMINATION
2.1 Term. This Agreement shall commence on the Effective Date and shall continue for [Length of Term] (the “Term”), unless earlier terminated pursuant to this Agreement.
2.2 Termination. Either party may terminate this Agreement for any reason upon [Notice Period] days’ written notice to the other party.
3.1 Fees. [Party B] shall pay [Party A] the fees specified in [Fee Schedule], attached hereto as Exhibit A.
3.2 Payment. [Party B] shall pay all fees due to [Party A] within [Payment Terms] days of receipt of an invoice from [Party A].
4.1 Confidential Information. Each party shall keep confidential any confidential information of the other party that is disclosed to it in connection with this Agreement.
4.2 Exceptions. Confidential information shall not include information that (a) is or becomes generally available to the public without breach of this Agreement, (b) was in the possession of the receiving party prior to its disclosure by the disclosing party, (c) is received by the receiving party from a third party without restriction on disclosure, or (d) is independently developed by the receiving party without use of the disclosing party’s confidential information.
- INTELLECTUAL PROPERTY
5.1 Ownership. Each party retains all rights, title, and interest in and to its own intellectual property.
5.2 License. [Party A] grants [Party B] a limited, non-exclusive, non-transferable license to use the Services during the Term solely for [Party B]’s internal business purposes.
- WARRANTIES AND DISCLAIMERS
6.1 Warranties. [Party A] warrants that the Services will be provided in a professional and workmanlike manner consistent with generally accepted industry standards.
6.2 Disclaimers. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, [PARTY A] MAKES NO WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD-PARTY RIGHTS.
- LIMITATION OF LIABILITY
7.1 Limitation of Liability. EXCEPT FOR [PARTY A]’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
7.2 Maximum Liability. IN NO EVENT SHALL [PARTY A]’S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE AMOUNTS PAID BY [PARTY B] TO [PARTY A] UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO LIABILITY.
8.1 Indemnification. [Party A] shall defend, indemnify, and hold harmless [Party B] from and against any and all third-party claims, damages, liabilities, costs, and expenses arising from any alleged infringement or misappropriation of any third-party intellectual property rights arising from [Party B]’s use of the Services.
9.1 Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be delivered personally, by overnight courier, or by certified or registered mail, postage prepaid, to the respective addresses of the parties set forth in the preamble to this Agreement or to such other address as a party may from time to time designate by notice to the other party.
9.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of [Governing Law State], without giving effect to its principles or rules of conflicts of laws.
9.3 Entire Agreement. This Agreement, together with any exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or understandings, whether oral or written, relating to such subject matter.
9.4 Amendments. This Agreement may not be amended except by written instrument executed by both parties.
9.5 Assignment. Neither party may assign this Agreement without the prior written consent of the other party.
9.6 Waiver. The failure of either party to enforce any provision of this Agreement shall not be deemed a waiver of such provision or any other provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
By: [Party A Signature]
Name: [Party A Name] Title: [Party A Title]
By: [Party B Signature]
Name: [Party B Name] Title: [Party B Title]
What are some optional clauses that might typically be included in a Software as a Service (SaaS) Agreement?
- Service Level Agreement (SLA): This clause defines the level of service the SaaS provider is obligated to provide, including uptime, response time, and other performance metrics.
- Data Privacy and Security: This clause outlines the SaaS provider’s obligations to protect user data, including data encryption, data storage, and data access controls.
- Intellectual Property: This clause addresses ownership of intellectual property, including trademarks, copyrights, and patents.
- Limitation of Liability: This clause limits the liability of the SaaS provider for damages or losses suffered by the user, including direct, indirect, and consequential damages.
- Termination: This clause outlines the conditions under which either party can terminate the agreement, including breach of contract, bankruptcy, or other events.
- Confidentiality: This clause addresses the obligations of both parties to keep confidential information confidential, including trade secrets, customer data, and other proprietary information.
- Payment Terms: This clause outlines the payment terms and conditions, including payment frequency, payment method, and late payment fees.
- Dispute Resolution: This clause outlines the procedures for resolving disputes between the parties, including mediation, arbitration, or litigation.
- Modification and Amendment: This clause outlines the procedures for modifying or amending the agreement, including notice requirements and consent procedures.
- Governing Law: This clause specifies the governing law and jurisdiction that will apply to the agreement, including choice of law and choice of forum.