SaaS Agreements – FAQs – What is SaaS?

SaaS is the abbreviation for “software as a service”. You may know this under another name, for example ASP services (application service provider), software on demand or software subscription. These names all refer to the same thing – software being made available via the Internet to users.

What is a SaaS Agreement?

A SaaS agreement is simply the name used for the agreement between a SaaS supplier and a SaaS customer which sets out the terms under which SaaS software may be accessed. This will usually include a service level agreement (SLA).

Differences between a SaaS Agreement and a Standard Software Licence

A SaaS agreement differs from a standard software licence in that:

  • The SaaS customer will not usually receive a physical or installed copy of the software;
  • No ownership in the SaaS software will be transferred to the SaaS customer;
  • The customer ‘s right to use SaaS software will end upon termination of the SaaS agreement.

Is a Service Level Agreement (SLA) a Software Licence?

No. A service level agreement (SLA) sets out the SaaS services being provided in addition to the right to use the SaaS software. These will usually include:


Due to the unique nature of SaaS agreements you will need to seek specialist legal advice on the content of a SaaS agreement whether you are a supplier or a customer to ensure that your rights are adequately protected.


Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:

To register for my newsletter click here


Other related articles: