SaaS Agreements – Data Protection – Email Marketing and Consent

As a SaaS supplier you will undoubtedly be sending marketing emails in your own name to existing and potential clients to advertise your own products and services, or possibly as a SaaS service on behalf of a customer. In any event you should be aware that the Information Commissioner’s Office (ICO) has issued new guidance on direct marketing, with regard to complying with the Data Protection Act (DPA) and the Privacy and Electronic Communications Regulations (PECR) both of which apply to sending direct marketing to consumers (BTC).

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SaaS Agreements – Data Protection – Prism and US Laws

SaaS suppliers should be aware of relevant US laws when outsourcing SaaS services (data storage and hosting) to US companies or companies located in the USA. SaaS customers are becoming increasingly concerned about outsourcing in the USA following media reports about “Prism”. Namely, that the National Security Agency (NSA) accesses personal data stored on the servers of Microsoft, Apple, Google, Yahoo, Facebook and a few other major US public companies. Below is a summary of the most relevant US laws that SaaS suppliers should be aware of.

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SaaS Agreements – Terms and Conditions – Need for an Arbitration Clause

SaaS customers and suppliers entering into business to business (BTB) contracts are increasingly using arbitration clauses in their SaaS agreements to avoid going to court to resolve disputes. If you do not already have an arbitration clause in your SaaS agreement it is worth considering adding one for the following reasons.

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SaaS Agreements – Terms and Conditions – Limitation of Liability

The terms of a SaaS agreement should always include a clause limiting the SaaS supplier’s liability to the customer. The specific details of the liability clause will depend upon the type of SaaS software being supplied, the value of the SaaS agreement and what is usual in the business sector in which the parties operate.
The following issues should be covered by the limitation of liability clause in most SaaS agreements.

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SaaS Agreements – Terms and Conditions – Subcontractors and Outsourcing

The terms of your SaaS agreement must include the right to use sub-contractors as 99% of SaaS suppliers use at least one sub-contractor – a third party data centre – to host their SaaS software. SaaS customers often try to prohibit the use of sub-contractors or place severe restrictions on their use by insisting that they must give prior consent to each sub-contractor. This is not acceptable for practical reasons as often numerous sub-contractors are used in providing the SaaS services and these sub-contractors will change over time.

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SaaS Agreements – The Advantages of using English Law

If you are a SaaS supplier who often deals with customers located outside of the UK, you will have experienced customers insisting on their local law applying to your SaaS agreement. Many SaaS suppliers agree to this by simply removing “English law” from the SaaS agreement and replacing it with, for example, “German law” unaware of the consequences this will have upon their SaaS terms and conditions.

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Website Legal Requirements – Cookies – Updated ICO Guidance

The UK Information Commissioners Office (ICO) will now start to investigate and prosecute companies for breaches of the Privacy and Electronic Communications (Amendment) Regulations. These set out the obligations of website operators to provide users with information about cookies and obtain user consent to the use of cookies. Failure to comply with the rules can result in a fine of up to £500,000.

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SaaS Agreements – Agency Agreements – Commercial Agents Regulations

SaaS suppliers often use partners to find prospects, refer leads, assist with the sales process or to conclude sales with SaaS customers on behalf of the SaaS supplier. Many SaaS suppliers are not aware that the terms of the Commercial Agents Regulations 1993 apply to the terms of the agreement between the SaaS supplier and its commercial agent.

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Website Legal Requirements – Cookies – New Guidelines

From the 26th of May 2012 the UK Information Commissioners Office (ICO) will start prosecuting companies for breaches of the Privacy and Electronic Communications (Amendment) Regulations. These set out the obligations of website operators to provide users with information about cookies and obtain their consent when using cookies. Failure to comply with the rules can result in a fine of up to £500,000.

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