SaaS, ASP Agreements – FAQs – Escrow

When negotiating a SaaS agreement you may come across the term escrow. What is escrow and is an escrow agreement necessary? Under the terms of a SaaS agreement you do not own or have any rights to the software (which includes the source code) that you are accessing. This is usually not an issue until technical problems arise, i.e. unexpected service interruptions, downtime, loss of application functionality and loss of data. This can add significant costs to your business and you are dependent upon the supplier to resolve these issues, unless you have an escrow agreement in place.

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