It is important to understand the difference between applicable law and applicable jurisdiction when negotiating a SaaS agreement. Applicable law specifies which country’s laws will apply to your SaaS agreement. Jurisdiction specifies which courts will have authority to deal with a dispute. Usually a UK SaaS agreement will specify the laws of England and Wales as the applicable law and the courts of England will have jurisdiction.
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SaaS 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 – FAQs – Source Code
When negotiating a SaaS agreement you will come across the terms source code, object code and open source. What is the difference if any between source code, object code and open source?
Source Code
Source code is the version of a computer programme (SaaS software) that exists prior to the software being ready to compile and run on a computer. The source code consists of a number of statements created in a text form by a programmer. These statements are saved in a named file and are called the source code.
Continue readingSaaS Agreements – Website Legal Requirements – for SaaS Suppliers
Below, I have set out the main legal requirements (including some optional recommendations) that you should comply with when operating your website in the UK. Even if you do not sell SaaS products or services online via your website, you will still need to comply with the following English laws when operating a website in the UK.
Mandatory Requirements
About Us/Contact Information
Continue readingSaaS Agreements – FAQs – What is a SLA?
SLA is the common abbreviation used for a service level agreement. When providing SaaS services to customers you need to include a SLA in your SaaS agreement, either as part of the main terms of your SaaS agreement or in a specific SLA schedule. A SLA should set out the following support and maintenance services that you will provide to customers to ensure that the SaaS software is made properly available to them.
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.
Continue readingSaaS 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).
Continue readingSaaS 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.
Continue readingSaaS 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.
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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