SaaS Agreements & End User License Agreement (EULA) Legal Tips and Advice. Software as a Service SaaS Lawyer Andrew S. Bosin represents SaaS and Software companies drafting and negotiating and providing legal advice on SaaS Agreements, SaaS Contracts, SaaS Licensing and End User Agreements and Master Service Agreements.
Andrew’s SaaS law and legal practice is based just outside of New York City where he provides legal advice to SaaS application, solutions and service providers, software applications developers, cutting edge companies and innovators, apps developers, entrepreneurs, founders, startups and emerging growth companies in the United States, US, New Jersey, New York, New York City, Brooklyn, Connecticut, Florida, Texas, Chicago, California, Ohio, Idaho, Alaska, and globally, internationally and worldwide in the UK, Europe, Amsterdam, London, Hong Kong, Abu Dhabi, UAE, Dubai, Bangalore, Delhi NCR, Hyderabad, Pune, Chennai, and Mumbai, India.
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If your business uses any type of software chances are its SaaS based. In this setting, SaaS is referred to as software-as-a-service, a growing area of the software world which differs from traditional enterprise software.
The agreement or contract that governs the use of the service and describes the rights and obligations of the parties, i.e., the user and provider is referred to as a SaaS Agreement.
It is more than likely that some of the software you are using in your business is SaaS. So, you should be familiar with some key terms, provisions and language that is typically contained in a SaaS Agreement.
The difference between SaaS based Software and Traditional Software
The two main differences are accessibility and price. With traditional software you go to the store make a one-time purchase, install the software on your computer and as long as you abide by the terms and conditions you can use the software conceivably forever. On the flipside, SaaS software is cloud based and as soon as you sign the contract and pay your fee the software is available to be accessed by an internet connection.
The other difference between SaaS and traditional software is price. While traditional software typically charges a one-time fee, the user of SaaS software will most likely pay a monthly fee to access the software. And, unlike traditional software, the user of SaaS Software does not own the software.
Access to the SaaS service is usually made available on a subscription basis, with monthly or annual plans as the most popular choices. In examining a SaaS agreement it should state in plain English what plans are being offered and what they include.
The User’s Rights To Access The Software
Prior to making a SaaS purchase, your company should sit down and discuss how many users will be accessing the software. This is because pricing is usually linked to certain key benchmarks, such as the number of users, or storage limits. So, “your” SaaS agreement should very clearly set forth the applicable benchmark. Specifically, if you want 100 users to access the software the SaaS provider could require your company to define or delineate those 100 employees as opposed to how you want to use the software which is any 100 employees at any time.
Service Level Agreements (SLA)
An important part of the SaaS Agreement is holding a SaaS provider to a minimum performance standard in connection with a SaaS agreement. An example is that the service will have an uptime percentage of 99.9%, meaning the service is guaranteed to be up, available and running live 99.9% of the time. This performance standard is known as a Service Level Agreement (SLA). You also need to have the Agreement spell out how the performance standard will be calculated.
What if the SaaS Vendor files for bankruptcy or goes out of business?
It is important to make sure that the SLA contains language that clearly states that you can export your data from your SaaS provider. This clause should also include how often and in what type of format you may access your data. The clause should also state that the vendor will assist in migrating your data, for an appropriate fee.
Who owns the Data?
If your SaaS Agreement is a Licensing Agreement rather than a Master Service Agreement it is likely that the SaaS provider will strictly limit what your company can do with all the data that will be derived from the users. This is typically the case where the SaaS Software allows the entity accessing it to modify the software and use it on line publically where users outside the company could leave their personal data in using the software such as name, address, etc. In negotiating a SaaS Agreement you want to make sure the ownership of the data is clearly spelled out and what your company can or cannot do with it. You also want to make sure that the SaaS provider is maintaining the data safely on its servers and that it is dealing with all security issues.
What is the duration of the Agreement and how do you terminate?
You want to make sure that before you sign a SaaS Agreement that you understand the duration of the term, how the Agreement gets renewed and how you can terminate early if need be.
Maintenance of the Software
The Agreement must clearly state which party is responsible for implementing and maintaining the service including fixing bugs and pushing updates.
Andrew S. Bosin, LLC, Esq. | www.njbusiness-attorney.com