Boncosky SaaS Law Blog

For SaaS companies, the customer agreement is critical.  Why?  A SaaS relationship is not a 1-time purchase of software to be installed.  The SaaS customer agreement is a document which will govern (what you hope will be) a long-term relationship with your client.  It must cover the software license aspect of the relationship, the ongoing maintenance, upgrading and use of the software and - often overlooked - the professional services to be provided by the SaaS company to the client.  The standard software license agreement is simply not sufficient.  And please do all you can to talk your REALLY BIG client from insisting that you use a form purchase agreement.

I recommend a "Subscription Agreement" for the use of the software.  This makes it clear what you are providing to the client - not a license to use software but access to a service during the subscription period.  The SaaS client must also consider the relationship professional services play and the nature of the SaaS service being provided.  Each will require customization of your SaaS customer agreement.

SaaS legal consulting requires a novel approach to client agreements.  Knowledge of ASP law, SaaS litigation issues, cloud computing law, etc. is just a start.  Make sure you discuss the unique nature of your SaaS service with a experienced SaaS law counsel so that you put the best agreement possible in front of your clients.