Article author
Charles Brecque
  • Updated

A software as a service ("SaaS") agreement is a contract between the owner of a software ("SaaS supplier") and a customer ("SaaS customer"). The customer is granted a limited license to use the software on a subscription basis for the agreed purpose only.

The software is accessed via the internet.

Core elements

  • Term
  • Features of license
  • Royalties
  • Data protection
  • Termination

Customer’s rights and obligations

  • Has only the rights expressly granted to it
  • Has the right to be notified of any:
    • Breach of anti-bribery laws.
    • Infringement of data protection laws by Customer’s processing instructions.
    • Proposed change in use of third party processors (and may object).
  • Right to indemnification from Licensor for IP infringement claims.
  • Must reasonably prevent unauthorised access to the software.
  • Seek Licensor’s consent to make software available to third parties.
  • Liable for risks arising from transactions completed with third party websites.
  • Liable for Licensor’s demonstration of compliance with Data Protection Law.

Customer shall not

  • Commercially exploit the software.
  • Develop any derivative software based on software or Licensor’s confidential information.
  • Use confidential information or software to develop or market competing products.
  • Use software to provide processing services to third parties.
  • Access or store prohibited viruses during term of Agreement.

Supplier’s rights and obligations 

  • To use any feedback provided by Customer.
  • To modify software without impacting its functionality.
  • To audit Customer’s use of software to identify users.
  • To invoice customers for additional licensees.
  • To prohibit use of software believed to be in violation of Agreement.
  • To take legal action for recovery of unpaid dues.
  • May assign its rights and obligations at any time.
  • Exclusive right to defend against third party IP infringement claims.
  • Option to terminate Agreement if software infringes third party’s IP rights.
  • Right to terminate Agreement if Customer:
    • Is in breach of contract
    • Insolvent
    • Bankrupt
    • Undergoes change of control
  • Liable for breach of warranty.
  • To surrender all customer data upon termination of Agreement.
  • Not to engage in any modern slavery practises.
  • Duty to comply with:
    • Privacy policy and archiving procedure for customer data.
    • Applicable laws for processing personal customer data.

Shared rights and obligations

  • Mutual duty of non-disclosure of confidential information.
  • Both parties entitled to equitable relief in the event of a confidentiality breach.

Please don't hesitate to reach out if you have any questions or suggestions here.

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