What are the key terms in a SaaS Service Agreement?

A SaaS agreement is the foundation of any cloud-based business. Because you aren’t “selling” a product but providing an ongoing “service,” the risks are different.

1. Service Level Agreements (SLA)

Clients expect the software to work. Your SLA must define what “Uptime” means (e.g., 99.9%), how it is measured, and what “Service Credits” (discounts) are available if you fail to meet those targets.

2. Data Ownership and Security

This is often the most negotiated point.

• Customer Data: The client must own their data.
• Derivative Data: You (the provider) should own the anonymised, aggregated data used to improve your machine learning models or platform analytics.
• Security: You must warrant that you use industry-standard encryption and security protocols.

3. Limitation of Liability

SaaS providers often handle sensitive data. It is vital to cap your liability to an amount related to the fees paid (e.g., the last 12 months of subscriptions) to avoid business-ending claims if a minor bug causes a client loss.

4. Termination and Data Export

What happens when the client leaves? The agreement should specify the timeline for you to delete their data and or provide a final export in a standard format (like .csv or .json).

Related Topics

• IP Ownership in Software
• Privacy Policies
• Commercial Contracts

Need SaaS Advice?

Whether you are a startup founder or an enterprise customer, we can review your SaaS terms to ensure your interests are protected.

Deploying software? Contact Bell & Senior today. Call (07) 5532 8777.