Tag: IT law

SaaS Agreements – Essential Elements

The following legal issues should be included in any SaaS agreement, whether you are a SaaS supplier or a SaaS customer.

Software Licence

Access to the software should be limited to the term of the SaaS agreement. Once the SaaS agreement expires or terminates the software licence should automatically terminate.

If the SaaS customer is a global entity, specify which companies or entities may access the SaaS software, in which territories and the number of users. Identify the specific purposes for which the software may be accessed. Name any third parties who will be permitted access to the SaaS software i.e. outsourcing providers or clients of the SaaS customer.

Intellectual Property Rights – IPRs

The SaaS supplier should retain ownership of all IPR in the software and services it provides. The SaaS customer should retain ownership of all IPR in its systems and data. The SaaS agreement should specifically state that the source code remains owned by the SaaS supplier. The SaaS customer should grant the SaaS supplier the right to use its IPRs for the term of the SaaS agreement i.e. display its logos and copyrighted information.

Applicable Law, Jurisdiction & Language

State which law applies to the SaaS agreement and which courts will deal with any disputes arising from it. In international SaaS agreements make sure that you specify in which language the dispute will be dealt with, and if the SaaS agreement is in more than one language, which language prevails if there is a discrepancy between the two versions.

Return of Data

At the end of the SaaS agreement the SaaS customer’s data should be returned. The format in which the data is to be returned and payment for this service should be agreed in advance.  Additionally the parties can agree that the Saas supplier will provide assistance in transferring SaaS customer data to a new supplier – in return for payment for this service.

Data Processing Agreement (DPA)

A data processing agreement (DPA) sets out the data processing obligations of SaaS supplier and the SaaS customer. The SaaS supplier is the data processor and the SaaS customer is the data controller. Under data protection law different rules apply to the data controller and the data processor. The General Data Protection Regulation (GDPR) specifies that the SaaS supplier is obliged to process personal data in accordance with the SaaS customer’s written instructions and should protect itself against claims from third parties that such processing is illegal. Likewise, the SaaS customer will also need to protect itself against claims from third parties caused by the SaaS supplier not processing data in accordance with its instructions or the terms of the SaaS agreement. The DPA will often need to include standard contractual clauses where international data transfers are made.

Service Level Agreement (SLA)

This sets out the hosting, support and maintenance services being provided to the SaaS customer by the SaaS supplier. The SLA should specify where the data centre is located, who is operating it, what security, backup and disaster recovery procedures are in place. Support hours and support services for dealing with hosting problems and software problems should be identified and documented and the procedure for dealing with with upgrades and maintenance to the software should be specified. The particular details will depend on the amount being paid for the hosting, support and maintenance and the purpose for which the software is being used.

Help

IIrene Bodle is an IT lawyer specialising in SaaS agreements, GDPR and cloud computing with over 15 years experience in the IT sector. If you require assistance with any SaaS or cloud computing contracts, GDPR or any other IT legal issues please contact me:

irene.bodle@bodlelaw.com
www.bodlelaw.com

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Website Legal Requirements – Ecommerce

Does your website comply with the various legal requirements in the UK?

Below, I have set out the main legal requirements (including some optional recommendations) that you should be complying with.

Mandatory Requirements

About Us/Contact Information

You must provide the following information in an easily accessible position on your website:

  • your legal name i.e. XYZ Ltd
  • your geographical address
  • contact details i.e. telephone number, fax number and email address
  • which country your business is registered in and the registration number
  • details of any supervisory body which regulates your business i.e. the FSA. For regulated bodies more detailed information is required.
  • where you are registered for VAT and your VAT number
  • clear details of prices and whether or not delivery and/or tax is included

Registration under the Data Protection Act

If you collect any personal data on your website – i.e. email address, name or address of a living individual, you will be processing personal data and must register as a data controller under the Data Protection Act. It is a criminal offence not to register.

Privacy Policy

If you are collecting, storing or processing personal data you need to set out how and why you are doing this to comply with the 8 principles of the Data Protection Act. In particular if you are sending marketing emails to potential customers you need to ensure that you have obtained specific consent, BEFORE such emails are sent. Consent should be covered in your privacy policy and the registration process on your website.

Disabled Access to your Web Site

If you offer goods or services on your website you need to make your website accessible to disabled users. Level 1 compliance with the WC3 standard will usually suffice.

click here for further details on WC3 compliance

Trade Marks and Logos

Do not use other people’s trade marks or logos without their consent on your website or you could be liable to pay damages for trade mark infringements.

Copyright

Do not use other people’s content without their consent on your website, or you could be liable to pay damages for copyright infringements. If you have links to other people’s content, make sure that this is permitted in their terms of use and ensure that the information opens in a new frame.

Online Payment

If you accept online payment for goods or services you must provide customers with specific information about their right to cancel, VAT and prices, refunds and defective goods PRIOR to the sale being concluded.

Recommended Requirements

In addition to the above mandatory rules it is advisable to have the following, in addition.

Terms of Use/Disclaimer

You should set out the rules applicable to persons using and accessing the goods and services on your website. For example state who may access the website i.e. consumers, businesses, over 18s. You should also aim to limit your liability for information on the web site. For example state which law applies, your limits on liability etc. However, please note that you cannot exclude or limit certain liabilities in particular circumstances  – particularly in relation to consumer, injuries caused by goods and services, or defects in your goods and services.

Copyright Notice

Protect the information on your website by inserting a copyright notice “© company name 2010.  All rights reserved.” Without this notice,  it may be difficult in some countries to take any action against a copyright infringement.

The above are examples of the main legal requirements for websites. This is a very complicated area of law and the specific rules that apply to you will depend on what goods and services you are offering, whether you are acting BTB (business to business) or BTC (business to customer), where you are based, where your customers are located and many other factors.

Help

If you would like to have your website reviewed for compliance with English law or have any queries about compliance please contact:

irene.bodle@bodlelaw.com
www.bodlelaw.com

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Interest from Customers who Pay Late – BTB

In the current economic climate, business customers often deliberately delay payment of invoices. Protect your business and improve your cash flow, by exerting your right to claim interest on late payments.

Is an interest clause required in the contract?

No. There is no requirement to have an interest clause in your contract. You have a statutory right to claim interest on late payments from a business customer (BTB). The statutory interest rate applicable is the Bank of England Base Rate + 8%. At the time of writing the currently applicable rate is 8.5%.

What interest rate can be specified in the contract?

You can choose which rate shall apply. This can be a number i.e. 7%, or a reference to an index i.e. the European Central Bank base rate, or a combination of both i.e. the Bank of England base rate + 2%. The interest rate specified can be higher or lower than the statutory rate.

Does the contractual or the statutory interest rate apply?

If you specify an interest rate in your contract, the  statutory rate will  not apply, even if the rate specified is lower.

Disadvantages of having a contractual interest clause

1. By specifying an interest rate in your contract you are inviting a business customer to negotiate a lower rate.

2. If you have a weaker bargaining position, you may have to agree to a rate much lower than 8.5%.

3. Time and money could be wasted on lengthy discussions about which index to use and the % rate applicable.

4. Many business customers are not aware of your rights. Saying nothing about interest in the contract can result in avoiding protracted negotiations on this issue, and the statutory rate will apply automatically.

Can a business customer exclude your right to charge interest in the contract?

No. Such a clause will be invalid and unenforceable.

Do you have to enforce your right to claim interest?

No. It is up to you to decide, if, and when, it is appropriate to enforce your right to claim interest from business customers.

Calculating interest

Your terms and conditions should state when payment is due i.e. within 14 days of the date of invoices. Interest will be calculated and payable from day 15.

As a matter of good practice send your customer a payment reminder before exercising your right to claim interest. They may simply have overlooked your invoice!

IMPORTANT NOTE: please note that the above only applies to BTB contracts.

Help

If you need assistance with interest clauses or your terms and conditions generally contact:

irene.bodle@bodlelaw.com
www.bodlelaw.com

To register for my newsletter click here

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