This article is general information, not legal advice. A SaaS agreement is a binding contract, so have a qualified lawyer review yours before you use it.
If you want long-term customer relationships, be transparent about what you provide and on what terms. A clear, current SaaS agreement does exactly that. This guide explains what a SaaS agreement is and outlines ten steps for writing one.
What is a SaaS agreement, and why do you need one?
A SaaS agreement is a legal contract between your company and your customer. It sets out the terms under which you provide your software as a service and the customer agrees to use it. It protects the rights of both sides, defines their obligations and reduces the chance of misunderstandings and disputes.
What should it include?
There is no universal template. Your agreement should reflect your business model, pricing, licensing approach and the way you deliver the service. The ten steps below cover the sections most SaaS agreements address.
Step 1: Describe your service
State clearly what the service is, what it does and what the agreement covers: specific products, your website, your apps or everything together. Customers should know what they are buying before they sign.
Also describe the license you grant. Typical points to define include whether it is limited, exclusive or non-exclusive, sublicensable, revocable and transferable. If you operate under several brands or offer several services, say so, and consider a separate "Provision of the Services" section.
Step 2: Cover availability
Customers generally expect the service to be available at all times. Be clear about what you can commit to. Describe planned maintenance and how you will notify customers, and include a force majeure clause for events outside your control. If you commit to a specific uptime figure, define how it is measured and what happens if you miss it, usually in a service level agreement (SLA).
Step 3: Define user rights and responsibilities
Explain how the service can and cannot be used. Common restrictions include no attempts to access the source code, no reverse engineering or derivative works, no illegal, fraudulent or misleading use, and no uploading harmful, abusive or infringing content. Add any restrictions specific to your product.
Step 4: Be clear about fees
Fees are the part customers read most closely. Explain your pricing structure, billing cycle, taxes, payment methods and how and when prices can change. If you bill on a recurring basis, state that customers authorize you to charge their payment method, and that they are responsible for keeping payment details current. Cover refunds and cancellation too.
Step 5: Define customer support
Say how customers can contact support, during which hours, and which channels are available. If urgent issues receive different handling outside business hours, spell it out. Setting expectations up front prevents complaints later.
Step 6: Address data security and privacy
Customers worry about what happens to their data. Describe the security measures you use to protect the confidentiality and integrity of customer data, and reference your privacy policy and any data processing agreement. Clarify who owns the customer data, what you may use it for (for example, delivering and improving the service) and what happens to the data when the contract ends. Applicable regulations vary by region and industry, so check what applies to you.
Step 7: Outline liability
A liability section limits your exposure. It typically states that you are not liable for indirect or consequential losses, such as lost profits or lost data, and may cap total liability at a defined amount. What is enforceable depends on where you operate, which is another reason to have a lawyer review it.
Step 8: Protect your intellectual property
State that your company owns all rights, title and interest in the service, your brand, your logo and your content, and that customers receive only the rights granted in the agreement. Also clarify the rights you have in any feedback customers provide.
Step 9: Set terms for beta features
If you offer beta or early-access features, explain that they may change, be limited or be discontinued, that they may be provided without the same guarantees as the main service, and that you decide the testing period.
Step 10: Review, edit and proofread
Do not publish the agreement as soon as you finish the draft. Re-read it, circulate it among your team, and have a lawyer review it. A well-structured document with clear sections, a logical order and no typos reflects well on your company.
General tips
- Write for your reader. Customers may not have a legal or technical background, so use plain language and define unfamiliar terms.
- Do not copy another company's terms. Your service, customers and risks are unique, and copied text can create gaps or conflicts.
- Involve a lawyer. An overlooked clause can be expensive.
- Stay focused. Include what is relevant to the relationship and leave out filler.
- Keep it current. Revisit the agreement regularly as your product, pricing and regulations change, and ask customers to accept updated terms when needed.
Final words
A clear, fair SaaS agreement builds trust and protects your business. Treat it as a living document that evolves with your company.
Once the agreement is signed, the next job is making sure contract details, renewal dates and billing information are tracked properly in your CRM. If you would like help with that in HubSpot, book a 30-minute HubSpot portal review.
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