SaaS suppliers obligations under the Digital Operational Resilience Act,(“DORA”), (Regulation (EU) 2022/2554 on digital operational resilience for the EU financial sector), are effective from the 17th of January 2025. From this date DORA provisions must be included in contracts entered into between financial services entities subject to DORA and their third party providers of ICT Services. As SaaS suppliers are third party providers of digital and data services on an ongoing basis they will be third party providers of ICT services if their SaaS customers are regulated by DORA. Both
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SaaS Agreement – FAQs -What is a SLA and Essential Terms to include in a SLA
A SLA forms part of a SaaS agreement. The SLA can be contained in a separate schedule to the SaaS agreement, or included in the main terms and conditions of the SaaS agreement. An SLA sets out:
Details about the availability of the software and services;
Technical details about hosting; and
Details about support and maintenance services for the software.
SaaS Agreements – FAQs – What is SaaS and Essential Terms to include in a SaaS Agreement
SaaS is the abbreviation for “software as a service”. You may know this under another name, for example subscription agreement, software on demand, software subscription agreement, cloud computing or ASP services (application service provider). These names all refer to the same thing – software being made available via the Internet to users.
Continue readingSaaS Agreements – Terms and Conditions – Data Processing Agreement
Under the Data Protection Act 1998 (DPA) UK SaaS suppliers currently have limited obligations to SaaS customers when processing personal data as part of their SaaS services. However, from the 25th of May 2018 the General Data Protection Regulation (GDPR) will impose numerous new data processing obligations on SaaS suppliers. In particular, the obligation for SaaS suppliers to enter into a written data processing agreement with SaaS customers and sub-contractors.
Continue readingSaaS Agreements – Terms and Conditions – Limitation Clauses
SaaS suppliers should always include limitation clauses in their SaaS terms and conditions to attempt to limit or exclude liability for certain types of losses and to cap their financial liability for breaches of contract. However, in order for limitation clauses to be valid, SaaS suppliers must ensure that the wording of the limitation clause is clear and unambiguous, otherwise the whole clause could be ruled void by a court and the SaaS supplier’s liability will then be unlimited.
Continue readingSaaS Agreements – Heads of Terms – Entire Agreement Clause
Heads of terms are often by SaaS suppliers where the final terms of the SaaS agreement have not yet been fully agreed with the SaaS customer. By using heads of terms the SaaS supplier can start to provide the SaaS services to the SaaS customer. However sometimes the parties are unaware of, or overlook, the legal implications and dangers of using heads of terms prior to finalising the terms of the SaaS agreement.
A recent court case in the UK highlights these problems.
Continue readingSaaS Agreements – Terms and Conditions – Safe Harbor Adequacy
European data protection authorities have recently raised serious reservations about the effectiveness of the safe harbour scheme and its ability to adequately protect SaaS customer data to the same standard as European data protection laws. If you are a SaaS supplier and are considering/or are already using a company located in the US to provide part of your SaaS services i.e. for hosting, you should be aware of the existence and limitations of the safe harbor scheme.
Continue readingSaaS Agreements – Terms and Conditions – Renegotiating Terms
Customers are increasingly attempting to renegotiate the terms of existing SaaS agreements, to reduce costs as more SaaS suppliers enter the market offering competing and cheaper SaaS services. In order to pre-empt such discussions SaaS suppliers should review their current SaaS agreements to ensure that they have the following terms in place to deal with and counter such requests.
Continue readingSaaS Agreements – Dealing with Late Payment or Non-payment of Invoices
In the current economic climate, SaaS customers often deliberately delay payment of invoices. In order to protect your SaaS business and improve your cash flow, you should consider including the following in the terms of your SaaS agreement.
Continue readingSaaS Agreements – Terms and Conditions – The Bribery Act 2010
If your are a SaaS supplier or SaaS customer you should be aware of the provisions of the Bribery Act when negotiating the terms of a SaaS agreement. The Bribery Act 2010 (“Act”) has been in force since July 2011. It aims to distinguish between hospitality (which is permitted) and bribes which are illegal. A breach of the Act can result in an unlimited fine and a maximum prison sentence of 10 years.
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